The Affordable Connectivity Program Is Dead—and Thousands of Households Have Lost Internet
The death of the U.S. government’s Affordable Connectivity Program (ACP) is starting to lead to internet service disconnections for low-income Americans. On Friday, Charter Communications reported a net loss of 154,000 internet subscribers, which it said was largely due to customers canceling after losing federal rebates. About 100,000 of those subscribers were reportedly receiving rebates, in some cases. make internet service free for consumers.
$30 Monthly Broadband Discount Offered by ACP ends in May after Congress failed to allocate more money. The Biden administration request $6 billion to fund ACP through December 2024, but Republicans call “waste” program.
Republican lawmakers’ main complaint is that most of the ACP money went to households that already had broadband before the subsidies were created. FCC Chairwoman Jessica Rosenworcel warned that eliminating the rebates would reduce internet access, speak An FCC survey found that 77 percent of participating households will change their plans or stop their internet service altogether after the discount period expires.
Charter Q2 2024 Earnings Report provides some of the first evidence of people dropping out of internet service after losing the discount. “Residential internet customers in Q2 declined by 154,000, largely due to the end of the FCC’s Affordable Connectivity subsidy program in Q2, compared to an increase of 70,000 in Q2 2023,” Charter said.
Across all ISPs, there are 23 million households in the US that have subscribed to ACP. Research published in January 2024 found that Charter serves more than 4 million ACP recipients and that as many as 300,000 of those Charter customers would be “at risk” of having their internet service discontinued if the discounts expired. Because ACP recipients must meet low-income eligibility requirements, losing the discounts could put a strain on their overall finances even if they choose to continue paying for internet service.
“The real question is the customer’s ability to pay”
Charter, which offers service under the Spectrum brand, has 28.3 million residential internet customers in 41 states. The company’s earnings report said Charter offered incentives to retain customers who previously received ACP subsidies. It’s clear that customer losses would have been higher without those incentives.
Read the report lightly Charter said about 100,000 of the 154,000 customers lost due to the ACP shutdown. Charter said it has retained most of its ACP subscribers so far, but low-income households may not be able to continue paying for internet service for much longer without new subsidies:
The ACP only lasts for a few years. The FCC implemented the $30 monthly subsidy in early 2022, replacing the previous $50 monthly subsidy from Emergency Broadband Benefit Program started recruiting users in May 2021.
FCC Only Lifeline Program offering a discounted monthly rate of $9.25 is in jeopardy after Court judgment last week. Lifeline is paid for by the Universal Service Fund, which is the subject of a constitutional challenge.
The U.S. Court of Appeals for the 5th Circuit found that the Universal Service charge on phone bills is an “unlawful tax” that violates the Constitution. But in similar cases, the 6th and 11th Circuits have ruled that the fund is constitutional. The circuit’s split increases the likelihood that the Supreme Court will take up the case.
Disclosure: Advance/Newhouse Partnership, which owns 12.4 percent of Charter, is part of Advance Publications, which also owns Ars Technica and WIRED parent company Condé Nast.
This story originally appeared on Ars Engineering.
