Infrastructure Investment and Jobs Act

For years, the federal government has avoided any attempt to resolve a long-standing problem: how to sustain funding for the Universal Service program. But perhaps that could change now that the lack of funding for the Affordable Connectivity Program (ACP) has gained substantial mindshare with the American public. Some stakeholders believe both problems can be solved by funding the ACP through the Universal Service Fund (USF) and expanding the types of entities that are required to pay to support the program.

Congress inserted an interesting requirement into the bill that reauthorizes the funding for the National Telecommunications and Information Administration (NTIA). Both the House and Senate added language that would require that a national broadband plan be created that would try to put the Federal Communications Commission, the NTIA, US Department of Agriculture, and other agencies on the same page.

On May 2, 2024, New Street Research Policy Advisor and Brookings Nonresident Senior Fellow Blair Levin testified before the Senate Subcommittee on Communications, Media, and Broadband at a hearing entitled The Future of Broadband Affordability.

 The Affordable Connectivity Program provided a way to bridge the digital divide for over 23 million US households, but congressional inaction has led to its unfortunate end. The consequences will be devastating. Soon, many underserved families in rural and urban communities alike will have to make the difficult sacrifice of losing access to telehealth services, online learning, employment opportunities, and so much more. Reliable broadband is essential to our way of life and economy. Without it, millions of families relying on the ACP for internet access will be left out and left behind.

Wondering how the broadband equipment market is doing? Not great, according to Dell’Oro Group. In first quarter 2024, global revenue for the broadband access equipment market dropped 12 percent year-over-year to $4.1 billion, as spending in the market reached a two-year low. What’s the deal? Dell’Oro VP Jeff Heynen said that in some cases, operators are still working through excess inventory they built up in late 2022.

“It is incredibly disappointing and just plain shameful that one of the most successful bipartisan programs to close the digital divide has lapsed. Every Congressional district in the country had constituents benefiting from this program, and still, Congress failed to deliver the funding needed to ensure that over 23 million households won’t lose connectivity. While the efforts made by the program's most ardent supporters in both Chambers were commendable, the resulting lapse of ACP makes it clear that the Congressional appropriations process is ill-suited for funding affordable broadband.

At the end of May, the Affordable Connectivity Program, which helps over 23 million low-income households access high-speed internet at home, officially ran out of funding. This lapse occurs despite strong support from the White House and lawmakers of both parties, as well as the backing of four out of five Americans. The focus must now shift to delivering a long-term fix. Fortunately, the solution is staring us in the face.

The overarching goal of the Broadband Equity, Access and Deployment (BEAD) Program, established by Congress in the Infrastructure Investment and Jobs Act, is to deploy broadband networks that reach every American and provide access to reliable, affordable, high-speed internet. Congress decided to allocate BEAD funds to states and territories since they are best situated to determine the needs of their communities, but it did not change any existing federal authority to oversee broadband or pricing.

The end of the ACP will undo the significant progress we have made toward closing the divide and harm millions of Americans. Not only that, but it will have economic and competitive consequences for our country if we fail to maximize the $42.5 billion investment we’ve made in broadband infrastructure through the Broadband Equity Access and Deployment Program. It is, as they say, penny wise and pound foolish. Connectivity has never been more important.

Michigan is once again leading the country with its innovation. This time, however, the innovation isn’t new technology—but a funding strategy that would catalyze new technologies, and ensure access to jobs, healthcare, education, and government services are available and accessible in perpetuity.