What Happens to BEAD Without the Affordable Connectivity Program?

The Broadband Equity, Access, and Deployment (BEAD) Program will fail if Congress doesn’t renew the Affordable Connectivity Program that states are relying on to connect low-income Americans. National Telecommunications and Information Agency Administrator Alan Davidson explained to Congress that the BEAD Program will be negatively impacted if continued funding for the ACP is not found. He emphasized that for low-income rural Americans, the ACP is the lifeline ensuring they can afford to access the internet. Without it, some providers may hesitate to deploy in rural areas over fear that the investment will be sustainable. Subscribership concerns may prove to be a limiting factor on which rural areas are served. The ACP extends every BEAD dollar further. A study conducted by Common Sense Media found that the ACP could reduce the BEAD subsidy needed to incentivize providers to build in rural areas by up to 25% per year. According to the study, ACP reduces the per-household subsidy required to incentivize ISP investment by $500. Simply put, ACP improves the economic case because it 1) effectively lowers the cost of service, 2) creates a customer base with less churn, and 3) makes subscribers easier to acquire because of the massive public and private investment in raising awareness for the program. But if the ACP is allowed to end, the federal government could end up overspending on every broadband deployment made through BEAD. This ultimately means BEAD networks will fail to connect millions of Americans.

[Ryan Johnson is senior policy counsel at Next Century Cities.]