Congress must move quickly to extend ACP funding
Over the last several years, the federal government has created a number of new financial aid programs for disadvantaged Americans amid ongoing struggles related to the COVID-19 shutdowns. One of these programs is the little-known Affordable Connectivity Program (ACP), which was created in November 2021 as part of the Infrastructure Investment and Jobs Act (IIJA). Given a recent report that funding for the ACP will run out within the next 18 months, lawmakers must decide quickly whether the program is proven to be effective or a waste of taxpayer dollars. Instead of letting the program expire, Congress should extend the ACP to give low-income consumers access to the digital economy.
As background, the ACP — a benefits program operated by the Federal Communications Commission (FCC) — helps ensure that low-income Americans have access to quality broadband at prices they can afford. The program provides a discounted price on internet service to qualifying households at or below 200 percent of the federal poverty line. Each household is eligible to receive a discount of up to $30 per month, or up to $75 per month for households located on tribal land. In addition, households may receive a one-time discount of up to $100 that can be used to purchase a desktop computer, laptop, tablet or other electronic device, so long as they contribute at least $10 and less than $50 toward the purchased item.
The ACP provides millions of Americans with a connection online that they are unlikely to find anywhere else. It’s also been extremely effective. In just a little under two years, the program has enrolled more than 14 million households, linking millions of Americans to the digital marketplace.
Even more impressive, the program has managed to accomplish this feat while receiving just $14 billion in appropriations. While still a significant sum, the amount allocated to the program is fairly small compared to other programs included in the $1.2 trillion IIJA. Despite its resounding success thus far, the program is now in danger of running out of funding.
According to a new analysis by Vernonburg Group founder Paul Garnett, the ACP is expected to fully exhaust its funding by as early as mid-2024. This projection should raise alarm bells for lawmakers and the Biden administration, who have spent the better part of the last two years promising to expand broadband access to all Americans.
Fortunately, there’s still time for Congress to act. If Garnett’s calculations are correct, the ACP should not run out of funding for over a year and a half. That gives Congress a small window of opportunity to pass legislation that would extend the program. Garnett estimates that funding the ACP for five years would cost around $30 to $35 billion, not including devices. Congress should move quickly to make this happen so that millions of Americans can continue to receive the benefits they need to stay connected online.
While Congress does tend to create and fund new programs that waste taxpayer dollars, that’s not the case for the ACP. The program possesses several key design features that make it a wise public investment.
First, the ACP is fairly market-friendly and targets funding directly to families. Unlike many government programs that provide subsidies to corporations, ACP provides families a broadband voucher that can be used to select the technology and service provider of their choice. This grants each household a unique degree of flexibility, unavailable to them with most other programs. The ACP also grants households specific consumer protections such as the freedom to switch providers and broadband service offerings. In addition, providers are prohibited from excluding consumers on account of their credit status or prior debt history, affording them a higher level of protection.
The ACP is also designed to prevent fraud and abuse. It includes a set list of eligibility criteria that must be satisfied for Americans to qualify for the program. For instance, most households must already participate in another federal assistance program such as Supplemental Nutrition Assistance Program or Medicaid and must be considered low-income. Vouchers are limited to only one monthly service discount per household, and household members must agree to submit detailed background information to the National Verifier and National Lifeline Accountability Database to ensure there are no inconsistencies. These records include first and last names, date of birth and social security information.
This is not to say that the ACP is perfect, because it’s not. In early September, the FCC’s Office of Inspector General (OIG) published an advisory notice that described specific instances where “providers and their agents enrolled many households into the ACP based on the eligibility” of a single family member. In so doing, these providers managed to commit fraud without detection for a significant amount of time at the expense of American taxpayers.
However, examples such as these are few and far between, and the agency is already taking action to address the issue. The FCC’s Wireline Competition Bureau (ECB) recently announced that it was directing the Universal Service Administrative Company (USAC) – the agency tasked with administering the ACP – to strengthen and modify the NV system to better detect fraud and improper enrollment activity. In addition, the ECB has instructed the USAC to increase the number and frequency of “program integrity reviews” designed to catch inconsistencies, and to de-enroll households found to be in violation of program terms and conditions.
While the ACP is imperfect, it’s considerably better than most programs at administering taxpayer dollars efficiently. The fact that $14 billion has provided more than 14 million American households affordable internet access is evidence enough. All Americans deserve to be able to participate in the digital marketplace, and the ACP has a role to play in ensuring that this occurs. Therefore, lawmakers should move quickly to extend this important program before funding runs out. An enormous amount of time and energy has already been spent attempting to close the digital divide. Congress must not stop now.
Nate Scherer and Steve Pociask are with the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit us on www.TheAmericanConsumer.Org or follow us on Twitter @ConsumerPal.