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FCC starts winding down Affordable Connectivity Program amid cash crunch

A Comcast gateway used to provide Internet service under the Xfinity brand. (Courtesy image)
A Comcast Xfinity Internet gateway. Comcast is among hundreds of Internet providers participating in the Affordable Connectivity Program. (Courtesy image)

The Federal Communications Commission (FCC) is taking preliminary steps to wind down the Affordable Connectivity Program (ACP), a government subsidy that helped low-income American households cover some or all of the cost of their broadband Internet service.

The program has burned through much of its funding as apportioned by Congress, and has around $4.1 billion left in the bank, FCC Chairperson Jessica Rosenworcel revealed in a letter to federal lawmakers this week.

Without additional funding, the program is set to run out of funding over the next few months, Rosenworcel warned. The agency is taking action now to shut down the program, as it expects the cash to dry up by April.

“At this point, more funding is urgently needed to keep the ACP in place, so that it can continue to support the households that rely on it and reach others that may be on the wrong side of the digital divide,” Rosenworcel said in the letter, adding that officials within the Biden Administration have already submitted a request for an additional $6 billion that would keep the program afloat through the end of the year.

“If Congress does not provide additional funding for the ACP in the near future, millions of households will lose the ACP benefit that they use to afford internet service,” Rosenworcel warned.

The ACP provides eligible, low-income households with a monthly credit that reduces their Internet or wireless phone bill by $30 when service is purchased through a participating provider. More than 22.5 million Americans receive ACP benefits, according to data released by the FCC earlier this month.

Many suburban and rural broadband Internet providers participate in the ACP, as do major service providers like Comcast (Xfinity), Charter (Spectrum), Altice (Optimum), Verizon and AT&T. T-Mobile does not participate in the ACP for its postpaid wireless service, but does offer ACP-subsidized plans through its prepaid brand, Metro by T-Mobile.

Rosenworcel says more than 1,700 broadband Internet providers could be impacted if Congress refuses to fund the ACP program beyond April. If that happens, she warns that broadband companies might be negatively impacted by irate customers who don’t understand why the program is ending.

With no apparent solution in sight, Rosenworcel says the FCC will begin a three-step process to bring the program to an end. The first step will involve notifying broadband providers that the ACP is winding down, and will require those Internet companies to provide advanced and recurring notice to customers that their ACP benefits will end.

Second, the FCC will announce a date when it will stop accepting new enrollments and re-enrollments in the ACP. That move is intended to help prevent volatility in the program, and ensure the funds can be distributed to current ACP enrollees without any unforeseen volatility.

The last step will see the FCC announce a hard shutdown date for the ACP in its entirety, which will impact anyone currently enrolled in the program. From that day forward, the FCC will stop providing the $30-per-month subsidy, and Internet providers won’t be reimbursed by the government if they choose to continue the discount on their own.

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 11 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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