Peter pan

Affordable Connectivity Program Needs Permanent Funding

Even amid bitter partisanship over federal spending and inflation, Democrats and Republicans appear to have found rare common ground in their shared support for major federal investments to expand broadband connectivity. Authorities in red and blue states are eagerly welcoming unprecedented federal funding for the Infrastructure Investment and Jobs Act, signed into law last November by President Biden, which could finally bring high-speed internet service to all corners of the country.

But universal deployment, while essential, won’t even get us halfway to our end goal of full digital inclusion. Our recent report explains why: For every American without broadband service available, up to twice as many have service available but are still not subscribed.

This is called the “broadband adoption gap” and it has persisted stubbornly for years, even as the availability gap has narrowed.

According to the Pew Research Center, approximately 23% of American adults do not subscribe to home broadband. These non-subscribers are disproportionately low-income, less educated, older, disabled, living in rural areas, and/or from communities of color. For example, while only 8% of adults living in households earning more than $75,000 do not have a home internet connection, 43% of adults living in households earning less than $30,000 per year do not subscribe. .

Fortunately, the infrastructure bill gives state and local governments the ability to spend federal funds on programs aimed at addressing this broadband adoption deficit. The Commerce Department’s recent guidance for the bill’s $42.5 billion broadband build allows state broadband offices to direct remaining funds to adoption-related programs once that they have a plan in place to cable unserved and underserved areas of their state. Other federal efforts, including the American Rescue Plan’s broadband programs, give state and local governments similar flexibility.

To make broadband more affordable for the most vulnerable households, the infrastructure bill also created the Affordable Connectivity Program (ACP), which provides eligible low-income households with up to $30 in monthly subsidies for broadband and a one-time benefit of up to $100 to help purchase a computing device.

The CPA is working – nearly 12 million American households have already signed up. But that growing demand is also eating away at the program’s $14.2 billion in funding.

Based on current trends, our economic model shows that CPA funding is expected to run out by mid-2024, approximately two years from today. Continuing these trends, we project that funding ACP broadband benefits (but not devices) for another five years could cost $30-35 billion.

Although this may seem like a large amount, this investment would be well worth its social and economic benefits. As the past two years have emphasized that home broadband is necessary for online education, working from home and acquiring the skills necessary for meaningful participation in the economy and to the digital society.

Ongoing ACP funding alone is unlikely to be enough to do the job. There are other critical issues that cannot be overlooked – lack of device, lack of digital skills, illiteracy, lack of interest in the internet and what it has to offer, and a series of obstacles related to endemic poverty. But tackling this broader set of challenges will only become that much more difficult without the CPA’s continued help for households that want to subscribe but need financial support.

Policymakers have several options for extending ACP funding. Some have argued that in the future, the Federal Communications Commission’s (FCC) Universal Service Fund (USF) should support the CPA. This would significantly increase USF’s budget and burden consumers, including those we want to incentivize to broadband.

Others have argued that Congress should appropriate the additional funds needed to extend the CPA for several more years. The credits would avoid market distortions caused by the FCC imposing additional charges on consumers. However, a path through Congress is uncertain in the current political climate.

The most immediate route is for state broadband offices – using the discretion granted to them under the infrastructure bill’s BEAD program, as well as other federal funding programs – to extend ACP funding to eligible households in their states. Given other priorities, not all states will be able to extend the duration of the CPA or expand its eligibility. But that should not prevent states that can fill the ACP funding gap from doing so.

To ensure that broadband services remain affordable for low-income households, Congress and states should act now to permanently fund the Affordable Connectivity Program. Failure to do so risks depriving tens of millions of Americans of access to economic opportunity.

Paul Garnett, founder and CEO of the Vernonburg Group, has over two decades of experience in telecommunications and technology law and policy, market development, business development, strategic alliances and technology model incubation. and commercial.