The clock is ticking for ACP - can it be saved?

  • Congress didn’t include funding for the ACP in its $1.2 trillion spending package

  • Just under $2.5 billion remains in the ACP funding pot, with 23 million households still enrolled in the program

  • Congress can still do something to save ACP, analysts said, but bureaucracy is getting in the way

April is the last fully funded month for the Affordable Connectivity Program (ACP), and the forecast for its future is looking grim.

On March 23, the Senate Appropriations Committee approved Congress’ final, fiscal year 2024 spending package, worth a whopping $1.2 trillion. The kicker? The over-1000-page legislation contained no mention of additional funding for the ACP.

Earlier this year, members of Congress proposed the ACP Extension Act, a bipartisan bill that would allocate an additional $7 billion to support the program.

That seemed like a good sign, But in a note to investors last week, New Street Research’s Blair Levin said ACP being left out of Congress’ spending package was “expected.”

“While the extension legislation continues to gain congressional support, we have seen no signs that legislation will be brought to the floor on its own,” he said.

That doesn’t necessarily mean an ACP extension is dead on arrival. Levin added there are “other legislative budget vehicles that we think will pass” before ACP recipients have to start paying for their broadband services, and that may open the door to refund the ACP.

“But the odds of that scenario remain low,” he warned.

The numbers aren’t looking pretty. The FCC has appropriated a total of around $17 billion for the ACP and its predecessor the Emergency Broadband Benefit (EBB) program. As of February 15, just under $2.5 billion remained in the ACP funding pot.

The FCC froze new ACP enrollments on February 8. As of that date, approximately 23.3 million households were enrolled in the program, including around 329,000 Tribal households.

Are we headed for an ACPocalypse?

So, how worried should we be about the impending demise of ACP? According to Joel Thayer, president of the Digital Progress Institute, “we’re in mission critical at this juncture.”

He told Fierce ACP will “undoubtedly” run out of funds by the end of April and May will be the last month for which carriers will be able to seek reimbursement from the FCC.

“We’re looking at a program that may be out of existence in three weeks,” Thayer said.

And once FCC pulls the plug on ACP, a big concern is how long consumers will have before they’re disconnected.

“In terms of [what ISPs will do], who knows? But there are carriers who are looking at this and trying to find at least some ways to taper folks off, or they’ve developed their own programs,” he said.

Thayer mentioned Comcast, which runs its own low-cost internet plan Internet Essentials. Comcast has a landing page that explains how consumers can transfer their ACP benefit to an eligible Xfinity plan.

And when a consumer is deciding whether to pay their monthly bill toward food, medical fees or broadband, “broadband is going to be the one that gets the first cut,” said Thayer.

“All that progress we’ve made since 2021 is going to potentially fall by the wayside,” he stated.

It's still up to Congress

Can Congress still do anything to save the ACP, even after releasing the spending bill? Perhaps, Thayer noted, however the House is under the whim of something known as the Cut-Go rule, which essentially means that “if you’re going to spend a federal dollar, you have to demonstrate that you’re cutting somewhere else” from an existing government program of greater or equal size.

Funding the Rip and Replace program is “another priority,” he said, so Congress has to figure out how to fund that along with the ACP.

“The question is, you know, how do you do it? Do you get rid of the Cut-Go? Do you think the ACP and Rip and Replace are so important that you pass both of them or do you just have to make a calculated choice?” Thayer said. “It’s tough.”

Joe Kane, director of broadband and spectrum policy at ITIF, told Fierce while there’s still bipartisan support to keep ACP running, “it doesn't seem to be a top priority for those with the power to move forward.”

“At this point, we are likely too close to the end of funding to avoid a lapse in the program, even if Congress eventually revives it,” he said. What will likely happen is people will lose confidence in the program, which will in turn “reduce its long-term effectiveness.”

“It's a shame since ACP should be the flagship federal broadband program after BEAD,” Kane concluded. “Now, other, less effective USF programs will persist while ACP fades out.”