Bridging the Digital Divide: Ensuring Affordable Connectivity for All Americans. The federal government is currently in the process of allocating significant funding for broadband expansion, including over $80 billion from the infrastructure bill and the American Rescue Plan. The aim is to ensure that every American has access to reliable, high-speed internet. However, it’s important to note that even with improved infrastructure, families won’t reap the benefits unless they can afford internet service. A recent survey revealed that most respondents from unconnected households indicated they could only afford a maximum of $10 for internet service, with a majority stating they could pay nothing at all.
Moreover, due to the influence of cost on customer demand and the high capital expenses involved in deploying broadband, internet service providers (ISPs) have little incentive to upgrade existing networks or build new ones in low-income areas. While public funds such as loans or grants can help offset the capital expenses, additional funding is required to ensure the sustainability of internet access in these high-cost communities.
In response to these supply and demand challenges, Congress enacted the Affordable Connectivity Program (ACP) as part of the Infrastructure Investment and Jobs Act (IIJA). The ACP provides subsidies to both low-income households and providers operating in high-cost areas. It has proven to be a crucial tool in securing broadband access, with over 18 million households currently enrolled in the program. The program has garnered bipartisan support and plays a vital role in meeting the Congressional mandate of providing high-speed and affordable internet to every American household. However, without further action from Congress, the ACP is projected to exhaust its funds by March 2024.
The enrolled households represent over 30% of those eligible for the ACP, surpassing the uptake rate of similar subsidies like Lifeline. This high participation rate may not fully reflect the actual demand since ongoing efforts to raise awareness and encourage sign-ups are still underway. In March 2023, the FCC announced $66 million in grants for its pilot ACP outreach program, further enhancing these awareness efforts.
The ACP offers families with incomes at or below 200% of the Federal Poverty Guidelines, as well as other eligible groups like Pell Grant scholars and veterans, up to $30 per month ($75 per month on Tribal lands) to offset broadband service costs. Additionally, it provides a one-time discount of up to $100 for a device, such as a laptop, from select providers after the family pays a minimal amount between $10 and $50, depending on their income level. These subsidies are directly provided to participating ISPs, ensuring a stable source of revenue and reducing investment risks associated with building networks in high-cost areas.
Failure to reauthorize the ACP could also undermine the success of other federal initiatives aimed at expanding broadband access. The Broadband, Equity, Access, and Deployment (BEAD) program, which allocates $42 billion to states, mandates ISP participation in the ACP. Similarly, the Treasury Department’s Capital Projects Fund program also requires ISPs to participate in the ACP.
The loss of the ACP could hamper state-level efforts to meet the connectivity expansion goals set by Congress. This uncertainty would impede ISPs and increase costs as they work with communities to determine connectivity needs and make funding decisions. It’s crucial to emphasize the significance of the ACP and other programs. The Pew Charitable Trusts conducted a study in collaboration with the University of Southern California’s Annenberg Research Network on International Communications and the California Emerging Technology Fund in 2021 to explore ways to improve connectivity subsidies for low-income households and ensure their benefits reach the intended communities. The study revealed that without policy intervention at the federal and state levels, low-income households will continue to struggle with accessing and maintaining internet connectivity.
An examination of affordable internet plans across California indicated that the availability of low-cost plans alone does not guarantee increased broadband adoption. However, state-level policies that combine these plans with additional outreach efforts, improved speed, and expanded service areas resulted in a 9.4% boost in adoption rates, equivalent to approximately 102,000 additional low-income households in the state.
In the context of Los Angeles, an analysis conducted on the Housing Authority of the City of Los Angeles (HACLA) highlighted that 80% of unconnected residents cited cost as the primary barrier to obtaining home broadband. They also pointed out limited provider competition and higher maintenance costs in high-poverty regions. However, a pilot project involving local ISPs promoting affordable plans led to an average adoption rate of over 53%. The analysis further revealed that 90% of HACLA subscribers to low-cost ISP service plans were enrolled in the ACP by October 2022.
The success of these initiatives can be attributed to ISPs integrating ACP enrollment into their consumer sign-up process. Additionally, programs like the ACP facilitate partnerships between ISPs, corporations, and nonprofits to expand technology and digital literacy initiatives. These programs include device distribution, technical support, and online services training for individuals.
Achieving ambitious goals, such as connecting every American to high-speed and affordable internet, necessitates collaboration between the public and private sectors. The primary responsibility of the public sector lies in providing secure and reliable funding. With millions of people lacking access to an essential service that greatly impacts their quality of life and economic well-being, there is no time to waste, and the risk associated with losing a successful program like the ACP is unwarranted. It is crucial for Congress to take prompt action to secure the future of the ACP and ensure the benefits it provides reach all Americans who stand to gain from it.
