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US lawmakers propose $7 billion in funding to extend FCC internet discount program

Jan 9, 2024

US lawmakers are mobilizing to prevent abrupt price hikes on millions of Americans’ internet bills, announcing new legislation to rescue a popular government program that’s set to run out of funding this spring.

The previously unreported bipartisan legislation expected Wednesday in both the House and Senate would allocate $7 billion in additional funding for the Affordable Connectivity Program (ACP), or $1 billion more than the White House proposed to Congress last year.

The ACP provides monthly $30 discounts on internet service for low-income households and up to $75 monthly discounts for eligible households on tribal lands.

The program has seen especially significant uptake in places as varied as California, Kentucky, North Carolina and Ohio, with at least 6 in 10 eligible households registering for the ACP in each of those states, according to the Tech Policy Institute, a Washington think tank.

The ACP works through internet service providers to register and serve households whose income does not exceed 200% of federal poverty guidelines.

Households also qualify if any member of the home participates in another federal aid program such as Medicaid, SNAP or school lunch programs; certain tribal assistance programs; or receives Veterans Pension or VA Survivors Pension benefits.

The ACP currently serves nearly 23 million households, according to the Federal Communications Commission, which warned on Monday it will be forced to take initial steps to wind down the program as soon as this week unless Congress passes an extension.

Without congressional intervention, the ACP’s $14 billion budget will be exhausted by the end of April amid rising enrollment and strong demand for benefits. By that time, the loss of funding could disrupt internet access to an estimated 25 million homes, the FCC has projected, or the equivalent of 64 million people, according to US Census Bureau household estimates.

The introduction of Wednesday’s bill — the Affordable Connectivity Program Extension Act — comes days after FCC Chairwoman Jessica Rosenworcel called on leading members of Congress to save the ACP.

“If Congress does not provide additional funding for the ACP in the near future, millions of households will lose the ACP benefit that they use to afford internet service,” Rosenworcel wrote in a letter to lawmakers. “More funding is urgently needed to keep the ACP in place, so that it can continue to support the households that rely on it and reach others that may be on the wrong side of the digital divide.”

The ACP was first created in the 2021 bipartisan infrastructure law with an initial, one-time $14 billion allocation, and replaced a similar pandemic-era initiative known as the Emergency Broadband Benefit Program.

It is widely popular among Republicans and Democrats, and officials have described it as vital to closing the digital divide by providing minorities, seniors, veterans and other groups an easier way to access jobs, health care and education.

The ACP is also seen as a support for the roughly 1,700 internet service providers who participate in the program.

Letting the ACP lapse would lead to increased administrative costs for businesses as they worked to process the program’s demise, and the loss of ACP subscribers could also discourage providers from building out networks in otherwise unprofitable areas, policy analysts say.

Despite broad support for the program, however, any bill to extend the ACP faces an uncertain future — particularly in the House, said Blair Levin, a telecom industry analyst at NewStreet Research.

“The House Republicans attempting to demonstrate that they are cutting back on government spending makes re-funding the ACP very difficult,” Levin wrote in a research note Monday. “It is unlikely the House Republican leadership will allow the bill to go to the floor.”

Still, Levin added, if the bill did receive a House vote, it would likely pass due to the GOP’s slim majority.

Letting the program exhaust its funding would have dire consequences for millions of Americans who depend on it, Rosenworcel testified to a House subcommittee in November.

“In April of next year, we’ll have to unplug households,” Rosenworcel told lawmakers, adding that the FCC would also need ample time to give warning to consumers and businesses.

“The best-case scenario, though, is we don’t do any of those things, because Congress continues to support the program,” Rosenworcel added.

In addition to the monthly discounts on internet service, the ACP also provides eligible households with a one-time discount of up to $100 off the price of a laptop, tablet or other electronic device.

Thursday’s bill is led by Vermont Democratic Sen. Peter Welch and Ohio Republican Sen. J.D. Vance in the Senate. In the House, the bill is cosponsored by New York Democratic Rep. Yvette Clarke, Pennsylvania Republican Rep. Brian Fitzpatrick and New York Republican Rep. Mike Lawler.

It is also backed by Nevada Democratic Sen. Jacky Rosen and North Dakota Republican Sen. Kevin Cramer.

More than 450 organizations are endorsing the bill, according to a Welch spokesman, including some of the country’s largest telecom industry groups, the AARP, labor organizations such as the AFL-CIO, the American Civil Liberties Union and the NAACP.

The ACP serves nearly 1.8 million New Yorkers, Clarke said in a statement, and it has helped connect more than 24,000 households to the internet in Vermont, said Welch.

Story Written by Brian Fung, CNN

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