Bidenomics Goes Online: Increasing the Costs of High-Speed Internet

One of President Biden’s top economic objectives is “lowering prices” for high-speed internet. Central to the Biden Administration’s plan to accomplish this goal is the Affordable Connectivity Program (ACP). ACP is based on a temporary program initiated during the COVID-19 pandemic to provide a subsidy for eligible low-income households. The subsidy is paid directly to participating broadband service providers. Contrary to the President’s intentions,  ACP enrollment is associated with higher monthly charges for fixed broadband internet. Furthermore, the increase in prices is higher for lower-speed plans, suggesting that broadband service providers are marketing these plans to low-income households and capturing a larger portion of the subsidy. Congress should allow the ACP program to sunset when its existing appropriation runs out within the next few months.