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Digital Inclusion

Roslyn Layton: Benefits of ACP Extend Beyond People Who Subscribe to Broadband

Largest beneficiaries of ACP do not participate financially in federal programs designed to promote broadband adoption.

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7 months ago

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The author of this Expert Opinion is Roslyn Layton, senior vice president of Strand Consult

Broadband Breakfast has been covering the U.S. efforts to support broadband adoption for some time. The pandemic made everyone aware of the need to connect all Americans to broadband as it became absolutely essential for work, school, healthcare, public safety, e-government, and so much more. Hence Congress created the Affordable Connectivity Program and appropriated a monthly subsidy of $30 to eligible families which has brought and kept more than 18 million households online since 2021.

ACP is the best anti-poverty program for the money

People use broadband to get a job, start a business, and learn new skills. Financial support to low-income Americans for broadband connectivity is an important, accepted social good, evidenced by the bipartisan support of the Universal Service Fund for almost 30 years. All Americans are better off when more people can have employment, health, and education. Notably accessing these services by broadband uses less government resources than in person.

Data and learning from ACP is critical to broadband policy researchers like John Horrigan at the Benton Institute, the Pew Broadband Access Initiative, Hernan Galperin at USC Annenberg, and the Government Accountability Office, Paul Garnett, and the American Consumer Institute which just convened an event on the topic. Former Federal Communications Commission Mike O’Reilly observed that the key argument for the ACP is upward mobility.

Randy May of the Free State foundation noted, “the evidence shows that in both rural and urban areas, and in both so-called Red and Blue states, the Affordable Connectivity Program is enabling millions of low-income persons to obtain a broadband connection that otherwise they might not be able to acquire.”

ACP demonstrates policy improvements from decades of suboptimal broadband subsidies programs like Lifeline. ACP works in part because it offers a meaningful benefit directly to consumers with minimal government intervention.

Just as vouchers enable school choice, vouchers enable broadband choice, allowing consumers to select their preferred provider and technology, creating broadband competition in the process.

The benefits of ACP flow to more than just those who it helps subscribe

However beneficial, ACP funds will run out before the end of the year, threatening to pull the rug out from under millions of U.S. households who rely on ACP to afford broadband.  Congress recognizes the importance of the program and the upward mobility that internet connectivity enables. Programs like ACP can pay for themselves over time with targeted reforms to modernize broadband subsidy programs.

As my new research shows, the largest beneficiaries of the ACP are America’s tech platforms Alphabet, Meta, Amazon, Apple, and Microsoft. Together they earn hundreds, if not thousands of dollars, annually on each new American who adopts the internet.

However, these companies do not participate financially in federal programs designed to promote broadband adoption. Whereas telecom providers have been paying billions of dollars for years to support the USF, universal service subsidies to fund broadband for rural areas, school, libraries, hospitals, and low-income Americans, tech platforms have contributed zero to such programs.

Yet tech companies get the benefit of any new user who comes online from these programs. My new report describes the ways that these companies could contribute financially, continue to enjoy the financial benefits of new internet users, and minimize pass-through to end users.

Congress and the FCC recognize that ACP should continue and that it should be reviewed as part of the larger Congressional efforts to reform USF and to conduct oversight of broadband subsidies. Kudos to Senators Ben Luján, D-N.M., and John Thune, R-S.D., who have launched a bipartisan working group on these issues.

ACP should not be allowed to run out. Congress should appropriate bridge funding for ACP while it works on long term reforms which will take time. In the interim, our nation can’t afford to unplug millions of U.S. households.

Roslyn Layton, PhD, Senior Vice President of Strand Consult and Visiting Researcher at Aalborg University Copenhagen, is an international technology expert focused on the economics, security, and geopolitics of broadband internet technology. She has testified before the U.S. Congress on competition in wireless technologies, spectrum reform, the security advantages of 5G versus Wi-Fi, and the empirical and ethical case for fair cost recovery for broadband networks. She is also a senior contributor to Forbes, a Fellow of the National Security Institute at George Mason University, and a Senior Advisor to the Lincoln Policy Network. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Broadband Breakfast is a decade-old news organization based in Washington that is building a community of interest around broadband policy and internet technology, with a particular focus on better broadband infrastructure, the politics of privacy and the regulation of social media. Learn more about Broadband Breakfast.

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Digital Inclusion

Provider Says FCC Should Freeze Affordable Connectivity Program Transfers

After February 7, the FCC is not going to require ISPs to accept ACP transfers.

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3 days ago

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January 13, 2024

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Photo of FCC Deputy Bureau Chief Noah Stein from Fordham University

WASHINGTON, January 13, 2024 – The Federal Communications Commission will start to shut down a key internet subsidy program for low-income households early next month, but one provider thinks the agency needs to do more.

The FCC said Thursday that the Affordable Connectivity Program will stop accepting new enrollments after February 7. New internet access providers can’t join the program after that date, either.

According to MVNO provider TruConnect, the FCC needs to broaden its plan. The virtual wireless company said the agency should freeze the ability of current ACP enrollees to transfer their benefits to another internet provider after February 7.

“A benefit transfer freeze during this time is in the best interest of ACP households, ACP providers, program integrity and program efficiency until funding either expires or is reappropriated,” TruConnect’s lawyer Judson H. Hill said in a filing posted on the FCC’s website today.

Hill said he communicated TruConnect’s position on Jan. 9 to Noah Stein, Deputy Bureau Chief of the FCC’s Wireline Competition Bureau, which issued the FCC’s 15-page ACP shutdown order two days later.

FCC’s shutdown order restricts the transfer of ACP benefits

According to the FCC, about 22 million low-income households have enrolled in the ACP, which Congress established in late 2021 with $14.2 billion to take $30 off monthly internet bills. The program’s last full month will be April without new funding by Congress, the FCC said.

The FCC’s rules provide that “households may transfer their ACP service benefit once per calendar month, with limited exceptions.”

In Thursday’s order, the FCC said it would not “require providers to perform transfer-in transactions for enrolled ACP households seeking to transfer their benefit.”

Instead, the FCC said it will allow “providers to choose whether to accept transfers after the ACP enrollment freeze.”

TruConnect didn’t provide any specifics behind its support for a transfer freeze.

In his discussion with the FCC’s Stein, Hill said he “emphasized that once program enrollments are frozen, that to achieve an orderly program wind down until funding expires that the [FCC] should also freeze ACP household subscriber benefit transfers between ACP programs providers.”

TruConnect’s website is effectively a portal to sign up ACP households and includes offers such as free 8 GB of high-speed data, free unlimited talk and text, and an option to buy a tablet for $10.01.

The ACP is administered by the Universal Service Administrative Co. under the FCC’s oversight. USAC’s website does not appear to have information on how many ACP enrollees have transferred to a new internet provider during the 24-month life of the ACP, which was created to help struggling Americans rebound from the pandemic.

Ted Hearn is the Editor of Policyband, a new website dedicated to comprehensive coverage of the broadband communications market. This piece was published on Policyband on January 12, 2024, and is reprinted with permission.

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Broadband's Impact

FCC Issues Timeline for ACP Wind Down

The FCC order came a day after bipartisan legislation was introduced to extend ACP.

Published

4 days ago

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January 12, 2024

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Photo of hourglass via iStock.

WASHINGTON, January 12, 2024 – The Federal Communications Commission announced on Thursday that starting February 8 it will no longer accept new enrollments for the Affordable Connectivity Program, barring Congressional approval of additional funding for the low-income program.

The commission issued a 15-page order detailing its timeline and requirements to gradually phase out the program. The first in a series of deadlines is set for January 25, when providers must notify participants of the program’s anticipated end for the first time.

The FCC’s order came the day after bipartisan legislation was introduced in both the Senate and the House, proposing an additional $7 billion for the ACP program.

If passed, this funding would enable the FCC to extend the ACP until the year’s end, potentially negating some of the wind-down steps detailed in the recent FCC order.

Introduced in January 2022 to replace the Emergency Connectivity Fund that arose during the COVID-19 pandemic, the ACP offers monthly stipends of $30-75 for internet service to qualifying U.S. households.

In the recent order, the commission notes that with the Infrastructure Investment and Jobs Act, Congress enacted several changes to the ECF Program to transform it from an emergency COVID-19 program to a longer-term broadband affordability program. 

The FCC continues to change the program to address participant needs. Most recently, the commission raised the monthly ACP benefit to $75 for high-cost rural areas and directed the Universal Service Administrative Company to accept applications from interested providers.

Yet, due to concerns about potential confusion, the commission canceled the plans for USAC to process applications in a recent order. 

Absent Congressional intervention, the FCC’s Bureau will announce the last fully funded month of the program in late February, currently projected to be April 2024.

Fifteen days after that announcement, providers will be required to send a second notice to ACP participants about the program’s end. The third notice issued will coincide with the last billing cycle that the full ACP benefit is applied to. 

Providers must secure a household’s explicit agreement to continue to receive broadband services after the end of the ACP.

In the order, the commission said it will begin to inform organizations that received outreach grants to cease outreach work focused on enrollment.

On Friday, the National Digital Inclusion Alliance, alongside four community partner organizations representing the 240 outreach coordinators for the ACP, filed a letter to the FCC asking that ACP outreach grantees be able to redirect their funded work toward program wind-down activities, including “raising awareness about the potential end of the ACP.”            

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12 Days of Broadband

12 Days: FCC Issued Rules Against Digital Discrimination

In religious traditions including Buddhism, Hinduism, Judaism and others, 8 represents the idea of balance, justice and fairness.

Published

3 weeks ago

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December 29, 2023

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Illustration by DALL-E

WASHINGTON, December 29, 2023 – In a vote split 3-2 along party lines, the Federal Communications Commission moved to adopt rules aimed at preventing discrimination in access to broadband services, on November 15.

Under the Infrastructure Investment and Jobs Act, the agency was tasked by Congress to enact regulations in 2023 aimed at eliminating digital discrimination and preventing its recurrence. The law amended the Communications Act to include the standard that “subscribers should benefit from equal access to broadband internet access service within the service area of a provider of such service.” (47 U.S.C. 1754)

The FCC’s new rules ban service providers from broadband discrimination by implementing a “disparate impact” standard. This standard aims to hold internet service providers accountable for practices that result in unequal broadband access among marginalized groups, irrespective of the providers’ intentions.

The shift departs from the former “disparate treatment” norm, which long upheld that either the government or third-party plaintiffs had to present proof of deliberate discrimination by a business to establish liability.

The new regulations implement a rule that digital discrimination can occur even if there is no discriminatory intent, based on criteria like income or race, is involved.

How will the agency conduct enforcement?

The commission will now have enforcement powers available, and investigations may be initiated through a complaint process.

Broadband providers criticized the agency and threated to sue because of the potential broad application of the new standard, fearing it might penalize routine business practices. Their efforts aimed to narrow the definition of digital discrimination to actions specifically designed to disenfranchise particular communities.

Before the agency’s action in mid-December, 24 organizations penned a letter to Congress urging its members to oppose the FCC’s rulemaking in mid-December.

Differing views on the rule’s effect

Experts held differing views regarding the probable effects of the FCC’s rules at a November Broadband Breakfast Live Online event. 

At the event Harold Feld, senior vice president at public interest group Public Knowledge, maintained that the rules’ impact would be minimal for the initial 60 days after implementation, and then, most likely remedy only the “worst and most visible disparities” in broadband access. 

Center for Technology Innovation at the Brookings Institution Director Nicol Turner-Lee cautioned that demonstrating instances of discrimination poses a significant challenge, as evidenced in other sectors such as housing, healthcare, and employment.

Others in the industry have raised concern that the Broadband Equity Access and Deployment Program may not effectively address the issues faced by marginalized groups. In a recent Expert Opinion piece, Emma Gautier from the Institute for Local Self-Reliance contended that urban areas, significantly impacted by digital redlining, might face greater obstacles in obtaining BEAD funding. This challenge stems from the infrastructure law’s predominant emphasis on rural development. 

The situation is further complicated by flawed FCC maps, she said which exaggerate coverage, speeds, and competition, making it notably difficult or perhaps impossible for most urban zones tagged as “served” to access BEAD funds.

See “The Twelve Days of Broadband” on Broadband Breakfast

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