Here’s what regional, local ISPs are saying about an ACP shutdown

The fate of the Affordable Connectivity Program (ACP) remains unknown, but with the FCC scheduled to halt new enrollments next month, ISPs are thinking about how a shutdown would impact the consumers relying on the subsidy.

Some of the big telcos, like AT&T, Comcast and Verizon, said on their earnings calls they have backup plans if the ACP goes away. But what do the regional and rural providers think about the situation?

Elliot Noss, CEO of Ting Internet and its parent company Tucows, said although Ting doesn’t have a lot of ACP recipients in its current footprint (which is mostly suburbs of cities), there are quite a few of them in its ongoing builds.

For instance, Alexandria, Virginia, which Ting has built around “20% of the way through,” has a “large ACP component.” So does Memphis, Tennessee, where Ting is building fiber in partnership with Blue Suede Networks.

“For us today, our implementation has been really more of working out the kinks and a bit of a trial run for the bigger populations that are coming up,” Noss told Fierce Telecom.

He explained Ting customers on ACP can essentially get “a free gig or two-gigs from us, depending on the market.”

“We get asked all the time how or whether we can make money on that offering. And I think my answer is, maybe, we don’t know, but we think it’s the right thing to do,” he said. 

Asked how big of a problem it would be if the ACP shuts down this spring, Noss said it’s less about how it will impact the business than how it would affect consumers at large.

As the world’s second-largest domain name registrar, Tucows “see[s] every day how often people let their internet services expire, despite rigorous notice sent to them.”

“I think that’s a function of peoples’ busy lives and it’s a function of the mess that is the current state of communication online,” said Noss. “So I’m expecting plenty of disruption…I mean somebody waking up one morning and just not having internet access.”

Congress has proposed a $7 billion bill to keep the ACP funded at least through the end of 2024. Noss said he “continue[s] to hope that the obvious bipartisan nature of this will manifest in a positive outcome,” but noted politics “is very often non-logical.”

“We see lots of political energy and lobbying dollars get funneled into opposing municipal broadband as an example,” he said. “The fact that more dollars and energy goes from incumbents opposing municipal broadband than [it] goes toward supporting ACP is reprehensible.”

ACP and tribal broadband

The ACP is particularly important for connecting tribal communities, as households in tribal lands can receive a subsidy of up to $75 per month, compared to the standard $30 per month. ACP reporting data shows that there were nearly 324,000 tribal households receiving the benefit as of January 29.

Brian DeMarco, general manager at Montana-based Siyeh Communications, said ACP recipients make up roughly 15% of its customer base, which is a total of around 2,000 subscribers in the Blackfeet reservation.

DeMarco’s concerned that ACP funding is going more toward larger ISPs instead of to reservations or providers that primarily serve rural communities. He referred to a recent Wall Street Journal article, which suggested Charter has received as much as $3 billion through ACP and its predecessor the Emergency Broadband Benefit program.

“I’m not saying maybe other people don’t need [ACP funding,] but they probably don’t need it as much as reservations or tribal areas where we are significantly under the poverty line,” DeMarco said. “So to eliminate ACP altogether without looking at [that], I think is very reckless by the government.”

“[The money] maybe wasn’t spent the way it should have been by larger companies. So it kind of feels like the smaller organizations and communities that really need [the ACP] are taking the beating,” he continued.

DeMarco hopes representatives at the state and federal level can “really get together and talk through the impact of taking $70 away from somebody.”

Once consumers get disconnected from ACP, they’ll likely have to “pick and choose” which utility is more important; the internet or paying the bill for electricity, water, gas, etc.

“Internet really is a necessity in rural America,” said DeMarco. “So which one of those [utilities] are they going to give up?”

Local providers are aiming to fill the gap

Elsewhere, Christa Shute, executive director of NEK Community Broadband (one of Vermont’s communications union districts), said the CUD plans to use additional profits from higher speed packages to keep current ACP recipients connected.

NEK Broadband is building its network across 56 towns in northeastern Vermont. Approximately 27% of households in the CUD are eligible for ACP, Shute told Fierce via email.

“NEK Broadband has made a decision to subsidize to the same level if the ACP shuts down,” she said, explaining the more individuals that purchase higher speed offerings, like 500-meg or symmetrical 1 Gbps, “the longer we can sustain the subsidization.”

But how long it’ll be able to maintain that subsidy “is difficult to predict.”

The Vermont CUDs are exploring ideas of creating a statewide fund to help fill the gap ACP would leave behind. They’re looking at solutions that can leverage “philanthropic dollars, local donations, and digital equity dollars.”

“The hardest part is coming up with a verification process if the ACP verification process is no longer available, which is why one of the largest benefits of the ACP is having one national program vs every state having its own rules,” Shute said.