FCC confirms actions taken to improve ACP

The FCC has addressed 55% of recommendations made by the Government Accountability Office (GAO) on ways to improve the Affordable Connectivity Program (ACP), according to a letter from Chairwoman Jessica Rosenworcel addressed to members of Congress.

That GAO report, published in January 2023, offered ways to improve the ACP's goals and measures, develop a consumer outreach process, create and implement ways to manage fraud, and revise its language translation process. The report followed a prior publication from GAO which found that "dozens" of ISPs claimed fraudulent ACP funds. The FCC has since taken action on that matter such as by requiring large participants Charter, Cox and Starry to verify their ACP subscribers' eligibility with the National Verifier.

According to Rosenworcel's letter, dated July 24, more than half of the GAO's suggestions have been completed "and Commission staff continue efforts to obtain close-out approval from GAO on each."

Those completed actions include: "development of new policies and procedures on fraud risk management, development of an anti-fraud strategy aligned with GAO's best practices, establishment of a governance body for fraud risk management, and strengthened internal controls to prevent ACP duplicate identification and prevention, subscriber identity verification, and subscriber address validation," she said.

Related:FCC hires communications firm to conduct ACP 'consumer education plan'

Rosenworcel added that the FCC's efforts to address other recommendations are "underway" and the goal is to complete and close out all recommendations by end of year.

ACP's future unknown

The FCC's confirmation that it's working to address problems with the ACP is relevant given that congressional action is needed to keep the program alive. The program, which subsidizes broadband for nearly 20 million low-income households as of this writing, is projected to run out of funding by April 2024.

Whether the FCC's efforts to respond to the GAO help nudge Congress toward funding the program remains to be seen. There are other potential policy disagreements at play, including a desire by some Republicans to modify the program's eligibility requirements.

It's unclear where negotiations are on the matter, but time is of the essence. There's broad agreement in the industry that the ACP is an essential tool both to closing the country's digital divide and ensuring the $42.5 billion Broadband Equity Access and Deployment (BEAD) program is a success.

"ACP remains a risk factor for ISPs generally and the BEAD program as a failure to provide longer-term will cause negative financial consequences and a period of political chaos," said Blair Levin in a note for New Street Research this week (subscription required).

Related:FCC adopts annual data collection rules for ACP

Levin added that discussions to refund the ACP likely will include "some nod" to reforming the ACP and Universal Service Fund. "But as of now, those discussions, if they are happening at all, are both at an early stage and in very quiet rooms," he said.

Earlier this summer, a group of Senate Republicans who support the program suggested that the White House use unspent COVID-19 relief funds to keep the ACP afloat while discussions unfold. An amount was not specified and it's unclear how much funding is available.

The White House, at the time, did not directly address the suggestion when asked for comment, telling Light Reading: "We look forward to working with members of both parties to extend funding for the program so that it can keep lowering high-speed internet costs for tens of millions of American families."