New Street Research: ACP Is Going Away
By Ted Hearn, Editor of Policyband
Washington, D.C., Jan. 25, 2024 – The Biden Administration’s signature broadband program for low-income homes is going away.
That’s the word today from New Street Research on the fate of the $14.2 billion Affordable Connectivity Program (ACP) run by the Federal Communications Commission since late 2021.
“We expect ACP to end,” said Jonathan Chaplin, who leads New Street’s U.S. Communications Services research team, in a client note.
New Street analysts have for many months been closely tracking and commenting on the funding politics surrounding the ACP.
The ACP reduces monthly Internet bills by $30 for eligible low-income households. The program is expected to run out of funding in April. Participating Internet Service Providers (ISPs) are barred from taking in new ACP enrollees after Feb. 7 and must by today begin notifying enrollees of the program’s pending demise.
Comcast today said it has 1.4 million ACP enrollees.
“We have already begun to communicate with ACP participants, and we’ll provide a range of options, including our highly successful Internet Essentials program, in the event that funding is discontinued,” Comcast President Michael J. Cavanagh said today on a call with Wall Street analysts.
New Street’s prediction was not a total surprise in that its Policy Advisor, Blair Levin, had been expressing some doubt about the ACP’s future but stopping short of Chaplin’s clear expectation today.
The FCC says more than 22 million households receive ACP benefits, with almost 10 million of them using the benefit for fixed broadband.
ACP funding is in doubt because key Capitol Hill Republicans appear unwilling to extend the program.
Senior Republicans in the House and Senate, including Sen. John Thune (R-S.D.) and Rep. Cathy McMorris Rodgers (R-Wash.) who is Chair of the House Energy and Commerce Committee, believe the ACP has been mismanaged.
The lawmakers have voiced concern that the FCC allowed too many people with existing Internet subscriptions to join the ACP when the program should have focused on first-time Internet users to help close the digital divide.
FCC Chair Jessica Rosenworcel told Congress that 20% of current ACP subscribers were new to the Internet, putting the total at about 4.4 million households. She said the law that established the ACP did not require the program to focus on first-time Internet users.
The Biden Administration has requested $6 billion from Congress to sustain the ACP through the end of 2024. Bipartisan legislation introduced last week would provide $7 billion.
In previous client notes, Levin has suggested that new ACP funding is possible if there is significant pushback from Republican governors and mayors relaying the anxieties of ACP enrollees about to lose their benefits.
New Street is an independent research boutique focused on the technology, media, and telecom (TMT) sectors globally, according to its website.