The House of Representatives neglected to include funding for the Affordable Connectivity Program (ACP), as well as the 'rip-and-replace' program, in its latest spending package, pushing both programs to the brink.

Nicole Ferraro, Editor, host of 'The Divide' podcast

March 21, 2024

4 Min Read
House Speaker Mike Johnson
House Speaker Mike Johnson (R-LA) represents one of the highest ACP districts in the country.(Source: Philip Yabut/Alamy Stock Photo)

The House of Representatives unveiled a $1.1 trillion spending package early Thursday morning (March 21) that, if passed, will keep the government from shutting down this weekend. What it won't do, however, is fund the Affordable Connectivity Program (ACP) before it ends in May.

With April set as the ACP's final month of full funding, advocates had hoped to see Congress fund the program in must-pass spending legislation. In addition to the ACP, another top priority for the telecom industry is getting more funding for the Secure Networks Program, also known as rip-and-replace. Network operators have been sounding the alarm that the funding allotted for that 2020 program is less than 40% of what's needed to cover the costs of ripping out and replacing Chinese-made telecommunications equipment.

"The Program cannot succeed until Congress funds the $3.08 billion shortfall," wrote the Competitive Carriers Association (CCA) in a letter to Congressional leadership earlier this month.

Indeed, the largest rip-and-replace funding recipient, Viaero, has filed multiple requests for time extensions with the FCC to complete its equipment removal, citing a "lack of full funding."

"Congress' inaction and the lack of funding is completely outside of our control," said Viaero in a filing this month.

Related:ACP enrollments end today – now what?

President Biden had initially requested $6 billion for ACP, and $3 billion for rip-and-replace in his FY 2024 budget released last October. In a letter last week, a group of Democratic and Independent Senators also urged Congressional leadership to fund both programs in must-pass legislation.

"We stand ready to work with you in a bipartisan way to stave off the funding shortfalls for both of these critical initiatives, including how to pay for new investments in each. Many of us have ideas about potential pay-fors – whether spending offsets or revenue raisers – that can bridge the gaps for ACP and the Secure Networks Program, giving Congress time to consider a longer-term package that sustains these programs, maintains American leadership in telecommunication innovation, and addresses critical national security concerns," said the letter.

The $1.1 trillion House package excludes funding for both programs.

In a statement this afternoon, the Competitive Carriers Association said the lack of rip-and-replace funding in today's spending package "will lead to reduced wireless coverage in the United States," adding that "Congress created this national security mandate, and it is past time for Congress to fund it."

Related:The death of ACP could cut $4B out of telecom industry

ACP issue needs 'other solutions'

In a statement this morning in response to the House package, Gigi Sohn, broadband advocate and spokesperson for the Affordable Broadband Campaign pushing for ACP funding, called the lack of Congressional action on the broadband subsidy program "embarrassing."

"We are deeply disappointed that funding for the Affordable Connectivity Program is not included in the minibus spending package. Congressional inaction means that over 23 million families will lose their broadband subsidy in May. 

"Because of political gameplay, about 60 million Americans will have to make hard choices between paying for the internet or paying for food, rent, and other utilities, widening the digital divide in this country. It’s embarrassing that a popular, bipartisan program with support from nearly half of Congress will end because of politics, not policy," said Sohn.

While the Senate still has to negotiate its own version of the package, and while the ACP Extension Act to temporarily fund the program with $7 billion has broad bipartisan support, it's unlikely there will be any amendments to include ACP funding in this week's final spending package, said Sohn in an email to Light Reading.

"It's a testament to the process: today's Capitol Hill can't seem to fund a sustainable broadband program for low-income folks, so we need to look for other solutions," she said.

Related:ACP funding extension not dead, but odds are 'low' – analyst

According to Sohn, that includes "reforming the Universal Service Fund to provide a permanent funding mechanism for a broadband affordability plan."

Others in the industry have been looking to Universal Service Fund reform as the vehicle for resolving the ACP issue. But such reform will take months, at least, and will not solve the immediate problem of 23 million households about to lose the ACP.

Meanwhile, myriad reports have recently detailed the widespread impact losing the ACP will have on consumers, the industry and the economy. 

Those stats include reports that the telecom industry stands to lose $4 billion with the loss of the ACP, according to New Street Research; and that a majority of ACP customers will experience service disruptions when the subsidy ends, according to the FCC. Last week, the Benton Institute for Broadband and Society also released a study showing that the ACP generates $16.2 billion in annual economic benefits, nearly double the annual cost of the program.

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About the Author(s)

Nicole Ferraro

Editor, host of 'The Divide' podcast, Light Reading

Nicole covers broadband, policy and the digital divide. She hosts The Divide on the Light Reading Podcast and tracks broadband builds in The Buildout column. Some* call her the Broadband Broad (*nobody).

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