Broadband Breakfast has been covering the U.S. efforts to support broadband adoption for some time. The pandemic made everyone aware of the need to connect all Americans to broadband as it became absolutely essential for work, school, healthcare, public safety, e-government, and so much more. Hence Congress created the Affordable Connectivity Program and appropriated a monthly subsidy of $30 to eligible families which has brought and kept more than 18 million households online since 2021.
ACP is the best anti-poverty program for the money
People use broadband to get a job, start a business, and learn new skills. Financial support to low-income Americans for broadband connectivity is an important, accepted social good, evidenced by the bipartisan support of the Universal Service Fund for almost 30 years. All Americans are better off when more people can have employment, health, and education. Notably accessing these services by broadband uses less government resources than in person.
Data and learning from ACP is critical to broadband policy researchers like John Horrigan at the Benton Institute, the Pew Broadband Access Initiative, Hernan Galperin at USC Annenberg, and the Government Accountability Office, Paul Garnett, and the American Consumer Institute which just convened an event on the topic. Former Federal Communications Commission Mike O’Reilly observed that the key argument for the ACP is upward mobility.
Randy May of the Free State foundation noted, “the evidence shows that in both rural and urban areas, and in both so-called Red and Blue states, the Affordable Connectivity Program is enabling millions of low-income persons to obtain a broadband connection that otherwise they might not be able to acquire.”
ACP demonstrates policy improvements from decades of suboptimal broadband subsidies programs like Lifeline. ACP works in part because it offers a meaningful benefit directly to consumers with minimal government intervention.
Just as vouchers enable school choice, vouchers enable broadband choice, allowing consumers to select their preferred provider and technology, creating broadband competition in the process.
The benefits of ACP flow to more than just those who it helps subscribe
However beneficial, ACP funds will run out before the end of the year, threatening to pull the rug out from under millions of U.S. households who rely on ACP to afford broadband. Congress recognizes the importance of the program and the upward mobility that internet connectivity enables. Programs like ACP can pay for themselves over time with targeted reforms to modernize broadband subsidy programs.
As my new research shows, the largest beneficiaries of the ACP are America’s tech platforms Alphabet, Meta, Amazon, Apple, and Microsoft. Together they earn hundreds, if not thousands of dollars, annually on each new American who adopts the internet.
However, these companies do not participate financially in federal programs designed to promote broadband adoption. Whereas telecom providers have been paying billions of dollars for years to support the USF, universal service subsidies to fund broadband for rural areas, school, libraries, hospitals, and low-income Americans, tech platforms have contributed zero to such programs.
Yet tech companies get the benefit of any new user who comes online from these programs. My new report describes the ways that these companies could contribute financially, continue to enjoy the financial benefits of new internet users, and minimize pass-through to end users.
Congress and the FCC recognize that ACP should continue and that it should be reviewed as part of the larger Congressional efforts to reform USF and to conduct oversight of broadband subsidies. Kudos to Senators Ben Luján, D-N.M., and John Thune, R-S.D., who have launched a bipartisan working group on these issues.
ACP should not be allowed to run out. Congress should appropriate bridge funding for ACP while it works on long term reforms which will take time. In the interim, our nation can’t afford to unplug millions of U.S. households.
Roslyn Layton, PhD, Senior Vice President of Strand Consult and Visiting Researcher at Aalborg University Copenhagen, is an international technology expert focused on the economics, security, and geopolitics of broadband internet technology. She has testified before the U.S. Congress on competition in wireless technologies, spectrum reform, the security advantages of 5G versus Wi-Fi, and the empirical and ethical case for fair cost recovery for broadband networks. She is also a senior contributor to Forbes, a Fellow of the National Security Institute at George Mason University, and a Senior Advisor to the Lincoln Policy Network. This piece is exclusive to Broadband Breakfast.
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