Households in rural America are overcoming significant headwinds as they sign up for the Affordable Connectivity Program (ACP) benefit at a higher rate than urban counterparts. Through April 2023, ACP enrollment data shows that:

• 15% of all rural households have enrolled in ACP.
• 14% of households in metro or urban areas have enrolled in the benefit.

Even this modest difference is striking given the tensions that buffet rural residents as they consider enrolling in ACP. On the one hand, rural areas have characteristics that improve ACP enrollment according to the Benton Institute for Broadband & Society’s Affordable Connectivity Program Enrollment Performance Tool .  Nearly half (49%) of rural households qualify for ACP compared with 40% of non-rural ones. This gap is largely because there are more lower income households in rural parts of the country. Some 36% of rural households have annual incomes at or below 200% of the Federal poverty level (FPL) in contrast to the 28% figure for households in non-rural areas. There is a positive correlation between areas with a large share of eligible households and ACP enrollment.

Pulling in the other direction, though, are factors in rural America that inhibit signing up for ACP:

• Network scarcity: There is no point in enrolling in ACP if there is no service available at your home. The large gap in wireline broadband adoption in rural America – just 59% in zip code areas classified as rural compared to 74% in non-rural areas using 5-year combined American Community Survey data – is attributable in part to the dearth of quality networks.
• Population density: The ACP Enrollment Performance Tool’s model controls for population density and shows that, holding other variables constant, there is a negative correlation between zip codes in less densely populated areas and ACP enrollment. Distance is a penalty, in that people are farther away from public libraries and other anchor institutions that may facilitate ACP enrollment. Word-of-mouth about the program from trusted neighbors may have less impact with fewer people nearby.

Yet the high level of need in rural America counteracts the negative link between network scarcity, population density, and ACP enrollment. Benton’s ACP Performance Tool, which compares actual ACP enrollment to predicted enrollment, shows that rural America is doing about 8% better than expected. Some 230,000 more rural households have signed up for ACP than the tool’s statistical model predicts. This greater-than-expected ACP enrollment level for rural homes accounts for the 1 percentage point rural advantage in ACP enrollment.

Although households in rural zip codes enroll in ACP at levels 8% greater than expectations, that figure varies across states. Several states with relatively small numbers of households living in zip codes classified as rural have very good performance measures. Connecticut overperforms by 40% (i.e., for every 140 households enrolled in ACP, the ACP Performance Tool predicts that 100 should be); the figure for Montana is 35%. Michigan and Ohio are states with large numbers of rural households that overperform, with performance figures of 21% and 14% respectively. Texas and Pennsylvania are examples of states with many rural households, but so-so performance. Texas is just 1% better than expectations, while Pennsylvania is 2% below expectations. A list of rural ACP performance for all 50 states is at the end of this article.

Behind rural households’ strong embrace of ACP is subscription vulnerability. Many rural households are “subscription vulnerable,” in that they report difficulty in affording their monthly internet bill and may be subject to service interruptions if their household encounters a financial setback. Research shows that as many as 40% of all lower-income households fit the “subscription vulnerable” category – but fully 44% of rural homes are subscription vulnerable.

This suggests that, in rural America, ACP is helping households on the economic margin maintain service and more easily cope with the affordability burden a broadband bill imposes on cash-strapped homes. Although analysis suggests that as many as 25% of ACP households are new broadband subscribers, it is difficult to estimate that figure for rural households. It seems inevitable, though, that this figure is lower for rural households because of less network availability. For rural America, ACP today is more likely to mean easing cost burdens on existing service than adding more rural households to the ranks of broadband subscribers.

Going forward, strong rural ACP enrollment rates suggest that when new networks come online, there will be a ready customer base of lower-income subscribers – unless, of course, ACP sunsets. At present, ACP provides much-needed broadband cost relief for parts of the country where more households are “subscription vulnerable.” And it creates an opportunity for effective use of broadband network subsidies, as an ACP-seeded customer base can mitigate the risk of “networks to nowhere” in rural America.

A note on methodology

This analysis uses U.S. Department of Agriculture Rural-Urban Commuting Area Codes to classify zip codes as metro or non-metro. In broad terms, non-metro or rural areas are:

• part of a city or town with an urban population of 20,000,
• urban populations of 20,000 or more and not adjacent to an urban area.
• urban population between 2,500 and 19,999, either adjacent to an urban area or not).
• rural areas, with population below 2,500 for areas either adjacent to an urban area or not.

This approach yields, in the ACP Tool’s data, approximately 19% of all households classified as rural, or 19.1 million households. This figure is right in line with estimates of the rural population as defined by the Census Bureau.

For convenience, this article characterizes non-metro areas as rural areas and metro areas as non-rural.

Zip code area boundaries are not drawn with a goal of parsing rural and non-rural areas. For that reason, the table below shows curiosities for some states. Texas’ population is far greater than North Carolina’s, but the number of households in zip codes classified as rural is about the same. This is because the sprawling metro areas of Texas result in areas with low population densities being adjacent to densely populated ones – and therefore not falling into a rural zip code classification. California and Massachusetts are extreme examples, with only small fractions of their populations designated as rural. For California and Massachusetts, rural households are likely to be in remote rural areas, and the states’ poor ACP enrollment performance underscores the difficulty of enrolling such homes in the program.

Appendix: ACP Enrollment for households in rural zip codes in the United States

The Benton Institute for Broadband & Society is a non-profit organization dedicated to ensuring that all people in the U.S. have access to competitive, High-Performance Broadband regardless of where they live or who they are. We believe communication policy - rooted in the values of access, equity, and diversity - has the power to deliver new opportunities and strengthen communities.

© Benton Institute for Broadband & Society 2023. Redistribution of this email publication - both internally and externally - is encouraged if it includes this copyright statement.

For subscribe/unsubscribe info, please email headlinesATbentonDOTorg

Kevin Taglang
Executive Editor, Communications-related Headlines
Benton Institute
for Broadband & Society
1041 Ridge Rd, Unit 214
Wilmette, IL 60091
847-328-3040
headlines AT benton DOT org

Share this edition:

Broadband Delivers Opportunities and Strengthens Communities