WASHINGTON—The Affordable Connectivity Program (ACP) is set to run out of money in 2024, and the most financially vulnerable U.S. households would bear the brunt of any lapses in ACP-funded plans, according to a new report from the Information Technology and Innovation Foundation (ITIF). The report calls on Congress to find $5 billion to $6 billion from current and redundant broadband subsidy programs to fund the ACP.
“Federal broadband programs are dangerously out of balance,” said Joe Kane, director of broadband and spectrum policy at ITIF and author of the report. “Congress has created effective subsidy programs that render older programs duplicative and wasteful. Yet the old programs persist, siphoning funding away from more effective ones and increasing phone bills.”
The report explores the current state of U.S. broadband subsidy programs. According to ITIF, the ACP eclipses and has outdated Lifeline, a Federal Communication Commission (FCC) program that targets low-income people for a discount on broadband service. Meanwhile the FCC Universal Service Fund (USF) High Cost program, which aims to close the rural-urban digital divide, has been made redundant with the introduction of the more effective Broadband Equity, Access, and Deployment (BEAD) program. The report also finds that broadband deployment programs from the U.S. Department of Agriculture (USDA), such as ReConnect, are duplicative and ineffective in the face of the BEAD program.
ITIF breaks down the average annual expenditures for Lifeline, High-Cost, and ReConnect and proposes a plan to sustain affordable connectivity by ending obsolete broadband programs. The report recommends that Congress do the following:
1. Discontinue the High-Cost, Lifeline, ReConnect, and all other (nontribal) federal programs targeting broadband deployment or individual broadband affordability.
2. Appropriate funding equivalent to those programs’ average annual spending to sustain the ACP.
3. Modify the size of and eligibility for the ACP benefit to make up for any remaining shortfall.
Figure 1: ITIF proposal to sustain affordable connectivity by ending obsolete broadband programs
The report concludes by pointing out that even if this plan is enacted, there will still be U.S. populations who remain offline. These groups would need a different set of policy solutions to achieve full digital inclusion. ITIF recommends that, at the highest levels, the government should focus on providing large-scale funding and widespread, accurate data to assist in digital inclusion efforts.
“Policymakers’ energy and time in this space would be better served fine-tuning and scaling digital inclusion efforts, rather than being obligated to lobby for BEAD and ACP, whose continuation should be a no-brainer,” said Kane.
Read the report.
