Affordable Connectivity Program (ACP)

President Joe Biden is requesting increased funding in FY 2025 for the FCC, Patent Office and the Commerce Department’s Bureau of Industry and Security (see 2303130070). The FY25 requests are lower than FY24's for the FTC, NTIA, the National Institute of Standards and Technology, DOJ’s Antitrust Division and some Agriculture Department broadband programs, though in some cases the Biden proposal exceeds ultimate Congressional allocations for FY24. Biden signed off Saturday on the Consolidated Appropriations Act FY24 appropriations minibus package (HR-4366), which included funding cuts for NTIA and other Commerce agencies but a slight increase for DOJ Antitrust (see 2403040083). The Senate voted 75-22 Friday night to approve the package.

Senate Commerce Committee ranking member Ted Cruz, R-Texas, and Communications Subcommittee ranking member John Thune, R-S.D., filed their long-circulating 2024 Spectrum Pipeline Act Monday with some changes from a draft version proposed in the fall (see 2311220063). The proposal drew sharply divided reactions from communications policy stakeholders. Some lobbyists suggested Cruz and Thune filed the measure Monday to get ahead of NTIA's planned release later this week of its implementation plan for the Biden administration's national spectrum strategy (see 2403050048).

Backers of Congress giving the FCC stopgap funding to keep the affordable connectivity program running through FY 2024 latched onto President Joe Biden's short mention of internet affordability in his State of the Union speech Thursday night to bolster that push. Biden also said Congress should pass comprehensive data privacy legislation and briefly touched on other tech policy issues. He didn't mention the House Commerce Committee's push to require TikTok Chinese owner ByteDance to divest the app for it to continue operating in the U.S., despite its supporters' rapid push to advance it (see 2403080035).

Lack of trained tradespeople and onerous permitting procedures could represent major challenges to broadband equity, access and deployment (BEAD) program implementation, speakers said Tuesday at Incompas’ annual policy summit in Washington. The looming end of the affordable connectivity program (ACP) (see 2403040077) is a big wrench in the works of planned BEAD projects, said Evan Feinman, who leads NTIA's BEAD program. He said internet service providers are recalculating project costs, and many planned projects will go into the red as they receive less help covering their operating expenses.

Senate Communications Subcommittee Chairman Ben Ray Lujan, D-N.M., and House Communications Subcommittee ranking member Doris Matsui, D-Calif., voiced varying levels of optimism during a Tuesday Incompas conference (see 2403050052) about the prospects that lawmakers will be able to reach a deal on stopgap funding that will keep the FCC’s affordable connectivity program running past this spring. The FCC said in a Monday update on its wind-down of the program that it will be able to provide only “partial” reimbursements for ACP in May (see 2403040077). Sen. Marsha Blackburn, R-Tenn., and Rep. Tim Walberg, R-Mich., highlighted their ongoing interest in enacting legislation to lift or ease permitting processes in a bid to streamline broadband deployments.

Numerous ISPs believe the affordable connectivity program's demise would give them a chance to snag subscribers from competitors. In earnings calls with analysts this quarter, many cable companies and telcos also told Wall Street they don't expect to take major hits to their subscriber base if the program ends (see 2311160076). The FCC said Monday that ACP funding will run out before the end of May (see 2403040077).

AT&T is collaborating with the FCC and other regulators in the wake of the recent widespread wireless network outage (see 2402220058), AT&T Chief Operating Officer Jeff McElfresh said during a Morgan Stanley financial conference Monday. McElfresh also confirmed that the loss of affordable connectivity program (ACP) funding won’t be a major financial hit for the carrier, while AT&T is poised to gain connections through the broadband, equity, access and deployment (BEAD) program.

The FCC released additional guidance Monday for affordable connectivity program providers as it continues winding down the program. "Absent additional funding from Congress, the ACP can only provide a partial reimbursement for May 2024," said a public notice docket 21-450. ACP providers "have the option to claim and pass on that partial reimbursement amount to enrolled households," it said: "After May 2024, the ACP will no longer support any benefits to enrolled households." Chairwoman Jessica Rosenworcel urged lawmakers to fully fund the program, saying many enrolled households have contacted the commission with concerns about losing service.

More than two-thirds, or 68%, of households enrolled in the affordable connectivity program "had inconsistent or zero connectivity" before entering the program, according to an FCC survey released Thursday. The survey included data from a December poll of ACP households. It said 80% of ACP households cited affordability as the reason for their lack of connectivity before the program. More than three-quarters of household respondents said losing ACP benefits would cause them to change or cancel their internet service plan. “Thanks to today’s survey data, leaders making the decisions about ACP’s future know one thing for certain," Chairwoman Jessica Rosenworcel wrote in a note, ACP is "not nice-to-have, it’s need-to-have." Rosenworcel added: "We’ve come too far to turn back now."

A fresh stab at creating a state net neutrality law met industry opposition this week. Connecticut’s joint General Law Committee held a hearing Thursday on a wide-ranging bill (SB-3) that would also require affordable broadband, ban junk fees, require streaming TV prorating and let consumers repair electronics. The legislature’s consumer protection bill “addresses inequities,” said Senate Majority Leader Bob Duff (D).