How ACP negotiations might shake out

The looming lapse of funding for the Affordable Connectivity Program (ACP) threatens to widen the affordability and adoption gap just as the access gap is closing. The ACP, which currently provides a monthly broadband subsidy of $30 for roughly 22 million households, is projected to run out of funding by April 2024 without action from Congress. And, despite a recent push from President Biden to fund the program with $6 billion through 2024, industry stakeholders are increasingly pessimistic that will happen in 2023. The ACP has broad support in the telecommunications industry, as well as with consumer advocates, making it an easy win for politicians who don't always get to score points with both groups on a single issue, not to mention with their own constituents. "The House is the number-one issue mainly because it's operating on what's called a 'CUTGO' type of framework, meaning that you're gonna have to find places to cut if you want to move forward on the other spending packages and spending programs," said Joel Thayer, president of the Digital Progress Institute. ("CUTGO" is cool congressional lingo for "cut-as-you-go.") Thayer said that while a request for ACP funding from the White House was positive and necessary, couching it in a broader request for billions of dollars in aid for international wars and domestic border security allowed the ACP funding request to serve "more as a sacrificial lamb in order to create a negotiation on these other priorities." Notably, with the Republican House operating on a "CUTGO" approach, some industry stakeholders argue that continuing the ACP will save the government money. Thayer expects an FCC reform package around the Universal Service Fund (USF), or a light infrastructure package that addresses some Republican concerns with the BEAD program, to be negotiated early in 2024. Most likely, Republicans would seek to tighten certain aspects of the ACP, such as eligibility requirements. Whether it's possible to pass such a package before ACP runs dry, without an interim extension of the funds, is unclear.