A $75 (£60) monthly subsidy will become available through the Affordable Connectivity Program, which itself requires considerably more funds to keep going
FCC increases support for consumers living in hard to serve areas
On 3 August 2023, the Federal Communications Commission (FCC) adopted an order to provide a monthly broadband benefit of up to $75 (£60) for subscribers living in qualifying high-cost areas. The discount will become available through the Affordable Connectivity Program (ACP), which already offers support of up to $30 a month for eligible households. The increased subsidy is outlined in the 2021 Infrastructure Investment and Jobs Act (IIJA) and aims to support providers that can demonstrate that the standard $30 would cause them to experience “particularised economic hardship” such that they would be unable to maintain part or all of their broadband network in a high-cost area.
Enhanced ACP complements other federal initiatives
The FCC’s order defines “particularised economic hardship”, outlines how ACP providers can demonstrate they are experiencing such a situation in a high-cost area and sets out the processes for reviewing and deciding on providers’ economic hardship submissions. The order is expected to incentivise providers to participate in the ACP or remain in the ACP in rural or remote areas, helping to further narrow the digital divide. The high-cost area benefit supports other federal initiatives, including those in the IIJA, to spur deployment and adoption in hard-to-reach locations by strengthening the business case for operators. Having been directed by Congress, the National Telecommunications and Information Administration (NTIA) is currently collaborating with the FCC to identify the high-cost areas that would be eligible for the enhanced ACP benefit.
The scheme could need $5-6bn (£3.9-4.7bn) every year to remain effective
According to FCC Chairwoman Jessica Rosenworcel, the ACP is the “largest broadband affordability effort” in US history, with 20m low-income households now enrolled. The ACP builds on the Emergency Broadband Benefit scheme that started during COVID-19 and was designed to work in parallel with the Broadband Equity Access and Deployment (BEAD) initiative to address both demand- and supply-side challenges. However, as we recently explored, the ACP is expected to run out of funds in 2024 – and to also require $5-6bn (£3.9-4.7bn) every year to remain effective. With concerns that this would harm both poorer consumers and investment incentives, stakeholders have called on Congress to provide assurances about its future, even suggesting policymakers divert money from other sources.
