What the End of ACP Could Mean for BEAD

Senate Commerce Committee  Ranking Member Ted Cruz (R-TX) asked New Street Research Policy Advisor and Brookings Nonresident Senior Fellow Blair Levin to clarify remarks Levin made about the negative impact the end of the Affordable Connectivity Program (ACP) will have on the Broadband, Equity, Access, and Deployment (BEAD) Program. Levin answered saying that BEAD does not fund the cost of deployment broadband to an unserved or underserved area; rather it funds the difference between the cost of deployment and what a provider would be willing to invest to serve that area. ACP increases the revenue for any such area, those closing the gap described above and decreasing the amount of BEAD funding necessary for that specific area, making the funds available for other areas. The consulting group BCG found that ACP reduces the amount needed to incentivize ISP investment by about 25% per location or $500. A conservative projection indicates that the number of locations that will miss out on the opportunity to obtain fiber due to the end of the ACP program will be at least 47,705, though the actual number is likely to be larger. "The bottom line is that while there can be some uncertainty about the number of homes that will lose out on fiber if ACP, there can be no uncertainty that tens of thousands of underserved Texas locations will be forced to connect with a wireless or satellite provider, instead of fiber, due to the end of the ACP program."