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Lawmakers Make Final $7 Billion Push to Save $30 Monthly Internet Discounts

May 6, 2024

Consumer advocates in education and healthcare see internet connectivity as a way to lift up struggling families. PHOTO: ERIC GAY/ASSOCIATED PRESS

WASHINGTON—Backers of a popular subsidy for Americans’ monthly internet bills are making last-minute appeals to leaders to keep the program funded, with Senate proponents hoping to attach the measure to a pending federal aviation bill set to pass Congress soon. 

The more than 22 million low-income households enrolled in the Affordable Connectivity Program, which has it roots in the Covid-19 pandemic, have been getting a $30 voucher each month that goes directly to a broadband provider for the cost of a wireless or home internet plan. Tribal households have been eligible to receive a $75 voucher. 

The effort to save the program has brought together a wide-ranging alliance of supporters, including telecom companies and consumer advocates in education and healthcare who see internet connectivity as a way to lift up struggling families. The program got a $14 billion infusion from President Biden’s infrastructure law passed by Congress in 2021, but those funds are now running out, with payments set to stop this month.

A bipartisan proposal to inject $7 billion into the program to extend the subsidies through the end of the year is being led by Sens. Peter Welch (D., Vt.) and J.D. Vance (R., Ohio), who want to add the measure to the Federal Aviation Administration’s reauthorization legislation that Congress could pass as soon as this week. The current FAA bill expires on May 10, and lawmakers are aiming to attach other proposals to the must-pass bill.

Sen. Peter Welch said he is committed to working with colleagues on reforming the program but said it shouldn’t lapse in the meantime. PHOTO: PABLO MARTINEZ MONSIVAIS/ASSOCIATED PRESS

The high cost of the program, which has no dedicated revenue stream and would be paid for with more deficit spending, has put some vulnerable House Republicans in a tricky spot. More than two dozen Republicans, including Reps. Anthony D’Esposito (R., N.Y.), Mariannette Miller-Meeks (R., Iowa.) and David Valadao (R., Calif.), want to keep it, citing the importance of keeping constituents online.

“I understand that that’s maybe against the grain in part of my party,” said Rep. Monica de la Cruz (R., Texas), who is in a tough re-election fight, of her support. More than 90,000 households in her district are using the discount, according to the Institute for Local Self-Reliance, a community development advocacy group that crunched federal data. 

Participation covers households with income levels that are 200% or less than federal poverty guidelines, or $62,000 in income for a household with four people. Households on other government assistance programs, such as food stamps, Medicaid or free school meals, are also eligible.

Welch and Vance have filed their proposal to extend the program as an amendment to the FAA bill. Senate Majority Leader Chuck Schumer (D., N.Y.) said earlier this year that he would work “to get the needed Republican support to fully fund and keep the program alive.” It is unclear which of more than 90 amendments that have been filed to the bill will get a vote and negotiations were continuing. 

“Access to high-speed internet has become a necessity in our everyday lives, from scheduling doctors’ appointments, to attending class, and doing your job,” Welch said. 

The Biden administration also supports extending the program.

If the program ends, “we risk reversing the significant progress this program has made towards closing the digital divide,” said Federal Communications Commission Chairwoman Jessica Rosenworcel, whose agency administers the program, in a letter to lawmakers. 

Rep. Yvette Clarke (D., N.Y.) is leading the effort to extend the program on the House side. 

She said this is a critical moment for the program as the funds wind down. “Once it’s dry, that means the program has definitely come to an end,” she said. 

Some Republicans said they have pressured Speaker Mike Johnson (R., La.) to put it up for a vote. Others sent Johnson a recent letter stating that the program’s “positive impact cannot be overstated.” One point of persuasion: Johnson’s district is one of the most heavily reliant on the program with more than 85,000 households enrolled. 

“We obviously need to rein in spending, but this is a function ultimately of prioritizing,” Rep. Mike Lawler (R., N.Y.) said. 

House Speaker Mike Johnson’s district is one of the most heavily reliant on the program. PHOTO: TIERNEY L. CROSS/BLOOMBERG NEWS

Representatives for Johnson didn’t comment. 

In March, the Republican Study Committee, the dominant policy group among House Republicans, released a sweeping list of proposals that called for the program’s elimination, saying it “stands against corporate welfare and government handouts that disincentivize prosperity.”

The broadband subsidy program’s beginnings extend to the early days of the coronavirus crisis when schools suddenly went virtual and employees logged on from home. The FCC pressured internet providers to agree to keep even past-due customers connected while officials devised a subsidy program. Congress in late 2020 passed a short-term assistance program with limited funding. 

Lawmakers later replaced the subsidies with the current program, which trimmed some payments while expanding the pool of eligible recipients. The effort helped boost subscribers for big telecom companies like Charter Communications and many smaller operators in rural areas.

As money in the program began to run out, community advocates and the telecom industry, along with powerhouse lobbying groups such as the AARP, launched lobbying efforts to extend it, citing studies that show the way that people who have high-speed connections benefit economically and socially. 

In October, the White House asked for Congress to find $6 billion to keep the program alive. But the effort slowly lost urgency as critics began to question whether discounts went to households that already had internet access, undermining the program’s goal to expand broadband’s reach. 

FCC officials have pushed back against that notion. Earlier this year, they released a survey of about 5,300 participating households that found that 68% of respondents said they had inconsistent Internet access, if any at all, before they enrolled in the program. 

At a Senate hearing Thursday on the program, researchers battled over what data show about the economic upsides of Internet connectivity and potential market consequences of the program. 

Some cited a price index of residential broadband rates from the telecom industry that shows the overall U.S. price of providers’ most popular broadband speed tier dropped by 18.1% from 2022 to 2023 and by 54.7% from 2015 to 2023, adjusted for inflation. But one witness, Paul Winfree, a former Trump budget aide who launched a right-leaning think tank last year, said regional data shows price increases in areas with a high percentage of program users, suggesting policies that subsidize demand lead to higher prices.

Welch said he is committed to working with colleagues on reforming the program but said it shouldn’t lapse in the meantime. 

“The economic arguments that we’re having back and forth—they’re real, we’ve got to deal with them and some of those, Dr. Winfree, I can accept, but we can’t let this expire,” he said.

Story Written by Katy Stech Ferek with assistance from Drew FitzGerald, Wall Steet Journal

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