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Internet service providers such as Charter, Verizon and Comcast Efforts to revive the Affordable Connectivity Program, an expired federal internet subsidy designed to help low-income families pay for broadband, have been quietly scaled back.
$14.2 billion The program offers discounts of up to $30 per month to some qualifying families and up to $75 per month to families on qualifying tribal lands. But the official said it’s over In June, Congress decided not to extend funding.
ACP has generally served 23 million Two-thirds of these households had unstable or zero internet access before signing up, according to a report December survey From the Federal Communications Commission. In February, ACP stopped accepting new applications as funding for the program dwindled.
Broadband companies reported losing some customers after the ACP expired. But overall, they weathered the storm better than expected.
“Overall, the impact on the company so far has not been as big as people feared,” said Craig Moffett, an analyst at MoffettNathanson. “But that doesn’t impact households that are important to this and may now lose their broadband service.”
Since the ACP expired, some Democrats and Republicans legislator Efforts have been underway to revive the program.
While broadband companies lobbied to renew the ACP before it expired, they have done little since to revive the program as uncertainty over funding and the November election sent a chill to Capitol Hill .
“I know the difference between industry really wanting something to happen and them saying, ‘Well, of course we support it,’ but they don’t spend money on advertising, they don’t spend money on lobbyists, they don’t spend money on lobbyists,” said Shin Street Research analyst Blair Blair Levin told CNBC: “Don’t invest money in research to support this case. “
Comcast owns NBCUniversal, the parent company of CNBC.
Capitol Hill Revitalization Efforts
Democrats and Republicans in the House and Senate have introduced bills that would cost $6 billion to $7 billion to restart the ACP, at least temporarily.
“I hope we can get something done quickly, especially as kids prepare to go back to school,” Rep. Mike Carey, R-Ohio, who co-sponsored the initiative, said in August. house bill With Rep. Nikki Budzinski, D-Ill.
The ACP was initially funded as the Emergency Broadband Benefit Program, a pandemic-era internet subsidy that quickly gained traction when reliable access became a necessity in a world dominated by online school and work.
Internet usage surged in 2020 and 2021. open vault.
But as the coronavirus recedes further into the public memory, convincing lawmakers to spend billions to extend those subsidies becomes an uphill battle.
One key reason is the election year timing.
For example, Ohio Republican Senator J.D. Vance is one of them main supporter ACP Group. But after being named the running mate of Republican presidential candidate Donald Trump, Vance calmed his claims.
In Congress, the Republican majority in the House of Representatives and Democratic control of the Senate could be reversed in November. That means Democratic leaders may choose to put other priorities ahead of ACP while they still control the Senate.
“This is going to be a very close election, so they may want to use floor time on judicial nominations,” said Gigi Sohn, a consumer broadband advocate and attorney who served as an FCC commissioner in the Biden administration. ) said in an interview with CNBC.
Gigi Sohn testifies during a Senate Commerce, Science, and Transportation Committee confirmation hearing reviewing her nomination to serve on the Federal Communications Commission on February 9, 2022 in Washington, DC.
Pete Marovich | Reuters
Still, Thorne believes bipartisan support for the ACP should make reauthorizing it a political matter for Democrats.
“That’s one of the things that absolutely baffles me because, to me, it’s something you absolutely want to do in an election year.”
As the Sept. 30 government funding deadline approaches, congressional leaders are scrambling to pass a stopgap funding bill to avert a government shutdown, pushing ACP’s priorities further down the list. After September, Congress is expected to be in recess until after the election.
“This thing is dead”
The private sector is curbing its hopes as some lawmakers on Capitol Hill insist an ACP comeback is increasingly unlikely.
“(ISPs) are working on their plans and they’re telling Wall Street that this thing is dead, they just haven’t put in the effort,” Thorne said.
While broadband providers generally support ACP, many in the industry believe the subsidy benefits too many American households. In some cases, customers use the offer for other products, such as mobile or pay TV.
For example, 1 in 4 New York households use ACP white house fact sheet Released in February.
Some people close to the companies say implementing new subsidy programs from scratch while building digital literacy among low-income consumers may be a better option after the election.
Disenchanted with temporary models, industry players are more likely to lobby for permanent solutions, such as strengthening universal service fundAccording to Sun. But it has its own set political obstaclesespecially after a federal court ruled that USF was unconstitutional.
With or without private sector resources, lawmakers pledged they will not give up on efforts to bring ACP back.
“We’re focused on the near-term issues,” Carey said. “Then we can come to a consensus and look for a long-term plan.”
But the decline in support from industry partners casts doubt on ACP’s future, since the company is ultimately the one providing network services and helping customers understand the program.
“Industry is one of the voices because they are the structure that provides this service,” Buzynski told CNBC. “It’s important that they have a seat at the table.”
Industrial disillusionment
The expiration of the ACP has also cast a pall over some businesses, namely those that have invested heavily in attracting new and existing customers to the program.
Charter Communications Chief Executive Chris Winfrey said in July that the ACP expiration affected both losses and low-income broadband connections after the company “invested a lot of effort into the ACP program.”
Charter is one of ACP’s largest industry backers: it received about $910 million from the program from 2022 to February 2023, according to the data Federal Communications Commission data. Comcast and Verizon each received more than US$200 million from the program.
When Congress decided not to extend ACP funding, the companies were forced to absorb the blow at a time when cable companies were already seeing broadband customer growth stall due to increased competition and slowing home sales.
Representatives for Charter and Comcast declined to comment. Verizon did not immediately respond to a request for comment.
Q2, Charter report Comcast loses 149,000 online customers report Broadband customers fell by 120,000. While some of this may be due to ACP, these companies expect to feel the biggest impact in the third quarter.
Since the end of ACP, companies have tried to help customers transition to lower-income or different network plans, in some cases reverting to subsidizing previous plans.
Comcast said in July that it has been helping customers migrate to other broadband plans.
Charter is trying to retain its lower-income consumer base by launching new savings offers, such as a year of free unlimited mobile lines for ACP customers. Others, such as Verizon, decided to only count financial losses from customer losses, reporting the loss of 410,000 prepaid wireless customers. Second quarter financial report.
So far, the initial bottom-line pain from ACP’s failure appears to be milder than some company leaders and analysts initially expected. But the process is far from over.
“So far, we’ve only seen the first chapter in that we’ve only seen the impact on gross accretion,” MoffettNathanson’s Moffett told CNBC. “But we haven’t seen the impact on bad debt and unpaid accounts disruption. “That will happen in the third quarter.”
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