• Some are still hanging onto hope that the Affordable Connectivity Program finds a last minute hero.

  • With support growing for the ACP Extension Act of 2024, New Street Research’s Blair Levin said chances of a program extension are “creeping up.” 

  • It still seems more unlikely than not that the ACP receives more funding before April, when the FCC estimated it will be completely depleted of funds.

The Affordable Connectivity Program (ACP) well is about to run dry, but some analysts remain hopeful that the program may be able to secure additional funding. As the saying goes: it ain't over till it's over.

To be sure, the odds are still favoring ACP funds running out, New Street Research’s Blair Levin wrote in a note this week. (Boo!) However, he said chances are “creeping up,” with signs that support for a funding extension is growing. (Yay!)

Following months of pleas from the Federal Communications Commission (FCC), internet service providers and those receiving ACP subsidies, Congress proposed a $7 billion bill — the ACP Extension Act — to keep the program funded at least through the end of 2024, but it appears to be a slow slog when it comes to actually passing.

By Levin’s count, the number of House Republicans supporting the ACP Extension Act, introduced at the beginning of January, is now at 15. “We further understand that more Republicans, in both the House and the Senate, are close to endorsing the bill,” he wrote. “That means that it would clearly pass the House if the Speaker allowed a vote.”

It's anyone's guess

However, it's still difficult to tell what Congress will do. There’s uncertainty around whether a vote on the bill will even take place, given Congress already has a backlog of legislation held up by partisan standoffs.

If House Speaker Mike Johnson allows a vote on a Senate bill containing aid for Ukraine, it could make room to bring more bills out of committee and to the floor for consideration, Levin said.

"Nothing is happening legislatively and the [ACP] funds running out is still the better bet," said Levin.

Former FCC Commissioner Michael O'Rielly warned that legislating on independent vehicles like the ACP Extension Act can be difficult. The more likely path forward for the program might be packaging it with other, bigger bills. “Moving this bill by itself, that just could be a heavy lift,” O’Rielly told Fierce Telecom this week.

In one such effort, the Biden Administration asked Congress for an additional $6 billion to the ACP through December 2024, as part of a $56 billion budget request for "critical domestic priorities," including childcare, disaster relief and energy independence. That package, proposed in October, has also reached a bipartisan impasse.

“It is difficult to overstate the upcoming Congressional chaos,” said Levin. “When the House returns from its two-week break, it will have only three days to fund the government. Having confidence in any prediction about what emerges from those three days is, in our view, problematic.”

Levin also hinted at other possible legislative avenues. While Congress members are on recess, he said there are ongoing bipartisan efforts to extend ACP, one of which would modify the program but provide additional funding.

The other involves the FCC’s Universal Service Fund (USF), where another program like ACP could be created and funded without Congressional appropriations.

Currently, the USF is funded by telecom companies that must pay a contribution factor proportional to interstate end-user revenues, but some have advocated for assessing USF contributions on broadband service and edge providers.

Supporters of the ACP have in the past suggested that it be incorporated into the USF, possibility replacing the fund’s Lifeline program.

USF reform has been long-awaited, though, and there are “a lot of nuances and really difficult decisions to make,” O’Rielly said. A program similar to the ACP through the USF is a possibility in the future, but it “could take a couple of years to try to get through all of the legislative maneuvering to bring that home,” he added.

Finding a bright side

Is there a bright side? Maybe. None of these efforts are a guarantee, but the continued work demonstrates Congressional attention to ACP that “was not apparent when the year began,” said Levin.

O'Rielly, who self-identifies as an “eternal optimist,” said he hopes things can come together for the ACP. As the U.S. spends billions on broadband infrastructure to expand internet access, he noted that “policymakers should know there is a portion of the population that can't afford such service. And they spread the gamut of the nation.

“It’s surrounding both red and blue districts. So it's not one side or the other,” he added.

If the ACP does run out of money in April, there could be an opportunity for states to use dollars from the Broadband, Equity Access and Deployment (BEAD) program or other dollars that have been appropriated by Congress for service affordability. In additon, some states may still have COVID money that they could use for this purpose.

“It’s tough to legislate in Congress right now,” concluded O’Rielly. “And there's lots of big things are getting stuck and funding is very tight. So, it's hard to see exact path now. But there are some opportunities if there's a will, and I hope that there will be.”