What Congress Needs to Know About Affordable Connectivity Program Funding

Roughly one in seven Americans have come to rely on the Affordable Connectivity Program (ACP) since it was created almost exactly two years ago by the 2021 bipartisan infrastructure law (Infrastructure Investment and Jobs Act). As of November 1, 2023, the ACP had roughly $4.7 billion in remaining funds. If the current rate of program uptake continues, April 2024 will be the last full month of funding for the ACP. To avoid this problem, the White House recently asked Congress for an additional $6 billion for the ACP in order to extend the program, and give Congress and the Federal Communications Commission (FCC) time to find a permanent source of funding for affordable connectivity. The White House's request is vital, but it also raises a key question: How long would the $6 billion for ACP last? To arrive at an estimate, it's critical to understand the two main variables that will determine the ACP's end date: the rate of new enrollment, and average cost per enrollee. 

• The "rate of new enrollment" represents the net change in total enrollment from one month to the next. In the past, this number has moved dramatically and unpredictably.
• "Cost per enrollee" represents the average ACP outlays for each participating household. It is calculated by taking total expenditures for a month and dividing them by the total number of enrollees. Over the life of the ACP, this value has ranged from $26.75 to $30.46.

For $6 billion to sustain the ACP through December 2024, one of two things would have to occur: Either new enrollment would have to decline by over 30%, or the cost per enrollee would have to decline to about $29. (Or some combination of the two.) While $6 billion might be enough to last through the year, data indicates that it could also fall short, with a devastating impact on participating households. Our recommendation is that Congress appropriate $7 billion in additional ACP funds to allow the ACP to continue growing at an average rate while still giving confidence to enrollees and ISPs that the program will be available for the entirety of 2024. Moreover, $7 billion is in line with what the FCC has requested, and it would give the agency more time to develop a permanent funding source for affordable high-speed internet.