Leaving Money on the Table: The ACP’s Expiration Means Billions in Lost Savings

The end of the Affordable Connectivity Program (ACP) may result in millions of households either eliminating or downgrading broadband service. This, in turn, could mean over $2 billion in lost consumer financial benefits and service delivery efficiencies for health care providers.

Nearly half of ACP households surveyed reported that they might either cut off service or choose a cheaper (and lower-quality) plan without the $30 ACP subsidy. Specifically:

• 13 percent of ACP households said they would disconnect their home service without ACP subsidies. That is approximately 3 million households.
• 36 percent (or 8.3 million households) said they would downgrade to a cheaper or slower plan.

The potential for service termination post-ACP could have significant economic consequences. More than half (55 percent) of ACP households said that being without home service would have a major impact on their ability to purchase items at an affordable price. This could translate into as much as $1.5 billion annually in lost financial benefits from e-commerce for low-income households that used the ACP.

A similar dynamic unfolds for telehealth visits and the forgone cost savings from less telehealth usage. Three in five (60 percent) respondents who used the ACP said that, in the prior three months, they had had an online appointment with a health care provider for a physical or mental health issue. Assuming that households who cut off service once the ACP ends move from telehealth to in-person visits, lost savings for health care service providers could approach $800 million annually.

The survey also demonstrates that the ACP has put a significant dent in the digital divide in several ways by:

• Expanding home broadband adoption: Among ACP households who used the subsidy for a wireline service, 20 percent said it was for a new wireline service for their home.
• Sustaining service in the face of affordability issues: Some 20 percent of those who have endured broadband service disconnection attributed service lapses to struggles paying their bill. Nearly three-quarters (72 percent) of low-income households said affordable housing is a problem where they live, and half would struggle with an unexpected expense. For them, a service subsidy or discount can keep service on consistently.
• Helping to bolster wireless access: Some 22 percent of ACP enrollees who chose wireless service used the subsidy to add a new mobile data plan for a member of the household.

The survey also explored the ACP and the impact of its expiration on the “covered populations” identified in the Infrastructure Investment and Jobs Act. Some highlights:

• People with disabilities were among the greatest beneficiaries of the ACP, especially for adding home wireline connections. Some 36 percent of respondents who identified as disabled used the ACP (versus 22 percent for all other respondents). And 24 percent of all respondents with a disability used it for a new wireline home connection, versus 17 percent for all others.
• Rural households were as likely to use the ACP as all others. Some 27 percent of surveyed non-metro residents said they enrolled in the ACP, compared with 26 percent for all other respondents.
• Black Americans were more likely to have enrolled in the ACP, as 31 percent of those surveyed said they enrolled in the benefit plan.
• Hispanics were more likely to say that the ACP’s end will result in them downgrading service; some 45 percent said this compared with 34 percent of all others.
• Households near the poverty line (i.e., annual incomes below $20,000) were also more likely than others to enroll in the ACP, as 33 percent signed up for the subsidy. Some 27 percent of these households used the ACP for new wireline subscriptions. And nearly one in five (18 percent) of the lowest-income households said they would cancel service upon the ACP’s expiration—twice the rate of other ACP households (9 percent).

Broadband affordability is a widespread problem for low-income households. The survey finds that 43 percent of low-income households are subscription vulnerable—meaning they have lost service because of difficulty paying broadband bills, find it very difficult to afford service, or live at or near the poverty line. And over half of low-income households surveyed said that affording their monthly internet service fee is either very (11 percent) or somewhat (42 percent) difficult.

Additionally, the survey illuminates what people pay for home broadband service. When households with unbundled (i.e., standalone) broadband service were asked what their monthly bill is, the average figure given was $66.53. However, when asked what price level they consider too expensive, 56 percent of respondents said a monthly bill up to $75 was too expensive. In other words, many low-income households pay a monthly internet bill that is outside the comfort zone of what their budgets can handle.

These findings come from a representative sample of 2,535 households whose annual incomes are $50,000 or less. The survey, conducted in April 2024, found that 26 percent of households in the sample were at the time enrolled in the ACP. The survey did not attempt to screen respondents by whether they fit ACP eligibility criteria; rather, it simply asked people if they were aware of the program. If they said they were, they received a follow-up question about whether they had enrolled in the ACP. Some 59 percent of all respondents said they had heard of the ACP, and, among those, 44 percent had enrolled. This comes to 26 percent of all survey respondents saying they had enrolled in the ACP.

John Horrigan is a national expert on technology adoption, digital inclusion, and evaluating the outcomes and impacts of programs designed to promote communications technology adoption and use. He served at the Federal Communications Commission as a member of the leadership team for the development of the National Broadband Plan. Additionally, as an Associate Director for Research at the Pew Research Center, he focused on libraries and their impact on communities, as well as technology adoption patterns and open government data. He is a regular contributor to Benton’s Digital Beat blog.