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New Year Offers Congress Second Chance to Extend ACP

 

By Nate Scherer, American Consumer Institute

With each new year comes new beginnings and, along with it, a new opportunity for Congress to do right by the American people. One way Congress can do right is by strongly considering a new bipartisan, bicameral proposal to extend the Affordable Connectivity Program (ACP).

Appropriately named, the Affordable Connectivity Program Extension Act, this important piece of legislation would, if passed, provide the ACP with a critical $7 billion lifeline to continue operating.

First created in 2021 and operated by the Federal Communications Commission, this important program provides disadvantaged households with a discount on broadband service that is good for up to $30 per month, or $75 per month for those residing on tribal lands. In addition, eligible households may receive a one-time discount of up to $100 that can be used to purchase equipment like a laptop, tablet, or other electronic device.

Unsurprisingly, the ACP is extremely popular, with three-quarters of Americans expressing strong support for continuing the program. To date, over 22 million households have enrolled in the ACP, with more joining every day. Unfortunately, the ACP is in imminent danger of exhausting all funding. As of this month, less than $4 billion of the original $14.2 billion in appropriations remains available for distribution. Should funding run out, the results could be catastrophic.

First, tens of millions of Americans could lose access to their connections online. As the American Consumer Institute has consistently noted, the ACP plays an important role in helping close the digital divide by providing families with the financial assistance they need to participate in the modern economy. Research suggests that broadband adoption is associated with a wide range of economic benefits including “economic growth, higher incomes, and lower unemployment.”

Taxpayers also save money in the long run, as the ACP encourages self-sufficiency among program participants. This reduces the need for the government to spend money on other, less efficient, federal aid programs that do not possess the same market-friendly design that provides financial assistance directly to families.

Failing to extend the ACP would also undermine investment in the program and harm state and federal broadband programs. Pew Charitable Trust notes that programs like Broadband, Equity, Access, and Development and the Capital Projects Fund “provide billions of taxpayer dollars for infrastructure and digital literacy and require ISPs to participate in ACP.” These programs help connect communities that may otherwise be too difficult and expensive to reach. The ACP helps even the playing field by reducing the cost for providers to operate in these areas.

Therefore, passing any bill that would extend the ACP should be a no-brainer for Congress. Yet, Congress has thus far failed to extend the program. For instance, in October the Biden administration asked Congress for $6 billion to ensure the program’s continuation, but Congress took no action.

That is unfortunate because the ACP is well worth the investment and any disagreements that may exist regarding program financing can be easily resolved with simple tweaks to eligibility requirements. For instance, if necessary, income eligibility can be adjusted down from 200 percent of the poverty line to a lower percent, putting it in line with other aid programs like the Supplemental Nutrition Assistance Program.

Congress can also decide whether to eliminate potentially duplicative programs like Lifeline. Indeed, the Internet Technology and Innovation Foundation published a study in July that found that eliminating redundant programs could generate $6.43 billion in government cost savings. This is more than enough to justify extending the ACP.

While it remains to be seen whether Congress will be able to negotiate an agreement on the ACP, pressure is mounting for Congress to act. Last week, the FCC sent a letter to Congress proposing next steps for establishing the program’s official end date. Internet providers will soon be required to start issuing notices to program participants informing them that the ACP is ending. When that happens, it’s not hard to imagine lawmakers receiving complaints from angry constituents demanding answers for why they no longer have broadband service.

It would be in Congress’ best interest to take advantage of the new year by beginning fresh and seriously considering the Affordable Connectivity Program Extension Act. The American people deserve to know when they enroll in a program that the program won’t quickly disappear, especially when the program in question provides critical financial assistance for broadband service.

 


Nate Scherer is a policy analyst with the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit us at www.TheAmericanConsumer.Org or follow us on X @ConsumerPal.