Verizon’s ACP Exposure On Wireless Side
By Ted Hearn, Editor of Policyband
Washington, D.C., Jan. 23, 2024 – If a major broadband subsidy program shuts down in a few months, Verizon will the feel the effects on the wireless side of its business.
Verizon’s guidance to Wall Street assumes the Affordable Connectivity Program (ACP) will maintain its funding. Though without new money from Congress soon, the program is expected to shut down in April.
“The majority of the exposure on ACP is in our pre-paid business. We have about 1.2 million prepaid subs that benefit from the ACP program and that’s less than 10% of our pre-paid base,” Verizon Executive Vice President and Chief Financial Officer Tony Skiadas said today on a call with Wall Street analysts.
Skiadas added, “On the post-paid side we have minimal exposure to ACP, both FiOS and post-paid wireless. And the margin exposure to ACP is very, very small.”
Yesterday, New Street Research released a report suggesting Charter has at least 4 million subscribers enrolled in the ACP, which provides $30 monthly discounts on broadband bills for eligible low-income households.
The Federal Communications Commission has ordered Internet Service Providers (ISPs) to stop accepting new ACP enrollments after Feb. 7. 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 for the ACP.
In 2021, Congress provided the ACP with $14.2 billion. FCC Chair Jessica Rosenworcel has said more than 22 million households have enrolled in the ACP.
“In the event the funding goes away, we have plans to address it and we’ll see what happens there,” Skiadas said.