A federal subsidy intended to provide affordable access to broadband Internet services is benefitting more residents of major metropolitan areas and other urban centers than it is underserved residents in rural areas.
The revelation was made by the Federal Communications Commission (FCC) this week in a press release that said more than 20 million households had enrolled in the Affordable Connectivity Program (ACP) since it was introduced in late 2021.
The program offers eligible, low-income residents or those enrolled in federal assistance programs a $30 per month credit toward the broadband Internet service of their choice. The discount is increased to $75 per month for residents on qualifying Tribal lands.
Eligible residents are able to put their discount toward land-based broadband service or wireless phone and data plans. Major companies like Comcast (Xfinity), Charter, (Spectrum), Altice (Optimum), RCN, Consolidated Communications, AT&T, T-Mobile and Verizon participate in ACP and offer ways for low-income residents to enroll at retail stores and online.
The FCC credited major ISPs and wireless providers with helping to spread the word about the ACP since it started in 2021. The agency itself conducted more than 1,400 virtual and in-person outreach events specifically geared toward raising awareness and enrolling eligible customers in the program.
As of Monday, California had the most residents enrolled in ACP with over 2.4 million receiving benefits. Texas was the second-highest with 1.55 million enrolled, followed by Florida with 1.44 million benefit recipients. All three states also have the highest populations in the country, in the same order, according to U.S. Census data.
Getting urban and suburban customers to enroll in the program has not been much of an issue: Around 85 percent of customers taking advantage of ACP benefits come from a major metropolitan area, as defined by the FCC.
The remaining 15 percent come from rural areas that almost certainly need those benefits the most. The reasons for the low enrollment among rural customers wasn’t made clear by the FCC, nor was it known how the agency was reaching out to more eligible residents in those areas.
The ACP was funded through the bipartisan Infrastructure Investment and Jobs Act, which was signed into law in December 2021. The bill allocated a little more than $14 billion to the program.
Analysts say the FCC is burning through that cash at a rate of more than $460 million each month, to include direct benefits paid to Internet service providers to offset the $30 (or $75) bill credit, as well as discounts on Internet-connected equipment like smartphones, hotspots and laptops.
If Congress does not pass new funding measures, the ACP stands to run out of cash by September 2024, according to a projection by the Institute for Local Self-Reliance (ILSR), a not-for-profit organization that works with municipal governments and small businesses on various self-reliance initiatives. That key date could be moved up as more people enroll in ACP, the ILSR says.
There is already some indication that the FCC will burn through that cash much sooner. In January, the FCC blew through the $460 million projected by ILSR, according to its own ACP data. As of May, the federal government was spending more than $538 million in ACP benefits, a number that is almost certainly to grow.