Can Internet Service Providers Absorb the End of ACP?

State broadband offices are asking internet service providers interested in Broadband Equity, Access, and Deployment (BEAD) funding to self-fund a $30 discount for low-income customers after the end of Affordable Connectivity Program. Since this request came from multiple states, I have to imagine the idea came from the National Telecommunications and Information Administration. I can’t think of any better proof that policymakers are out of touch with the reality of rural business plans. Even providers that are successful in rural markets are going to have small margins. They will be lucky to build margins to 10% to 15% annually over time. These margins are needed to fund future retirements and replacements of electronics that will inevitably come in 12-15 years and to replace assets like vehicles a lot sooner than that. Providers with a lot of ACP customers are in real trouble. They are likely to lose a lot of customers when the ACP ends. They can’t survive if they lose too many customers, and they can’t survive if they keep them by giving giant discounts. I hope that no State Broadband Office makes it mandatory for BEAD winners to self-fund the $30 discounts. They are already worried about providers taking a pass on BEAD, and this will convince more to walk away from the grant program.