FCC rule will 'close the door' on preserving the ACP, warns Sohn

The FCC's net neutrality order will not require broadband providers to contribute to the Universal Service Fund, drawing criticism from advocates of the Affordable Connectivity Program (ACP). Meanwhile, a separate effort in Congress could force a vote on ACP funding.

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

April 11, 2024

5 Min Read
Court gavel resting on a pile of money.

The FCC will vote later this month on a draft "open Internet" order reinstating net neutrality and Title II authority over ISPs. But one aspect of the order is drawing criticism from advocates otherwise supportive of the move.

Specifically, affordable broadband advocates including Gigi Sohn are pushing back on the FCC's decision to forbear applying a section of the communications law that would have required broadband providers to contribute to the Universal Service Fund (USF). The FCC made the same decision when passing net neutrality rules in 2015.

However, Sohn and others have been urging the FCC to open a proceeding on assessing broadband Internet access service (BIAS) revenues in order to broaden USF's contribution base and roll the Affordable Connectivity Program (ACP) into the Lifeline benefit. Beyond the need to reform the USF long term, Sohn and others are stressing this as a way for the FCC to keep the ACP funded. The ACP will run out of funds entirely by the end of next month without action from the federal government, and Congress has neglected to pass additional funding.

But the FCC's draft order on net neutrality, as written, both delays such action on USF and suggests Chairwoman Jessica Rosenworcel is not rushing to start a proceeding on the role of broadband revenues in USF reform.

Related:How the FCC could save the Affordable Connectivity Program

"[The] record does not convincingly show that imposing universal service contribution requirements on BIAS is necessary at this time ... We conclude that forbearing from imposing new universal service contribution requirements on BIAS service is in the public interest," states the FCC in its draft order.

On the public interest front, the draft order refers to estimates predicting that inclusion of broadband service revenues in the USF could increase consumers' bills by $5 to $18, which "could therefore be detrimental to the goal of promoting broadband adoption and affordability." 

It further points to comments from USTelecom stating that "Immediately subjecting [BIAS] revenues to universal service contributions, without pursuing broader contributions reform, would significantly raise the cost of broadband to consumers." While USTelecom also sees USF reform as a way to preserve the ACP, the industry group supports assessing Big Tech company revenues as part of contribution reform.

The FCC indicated it could still take action on the broadband revenue issue in the future.

"We do not disclaim our authority to require new universal service contributions in a future rulemaking, and our decision today is not intended to prejudge or limit how the Commission might take action in the future," the draft order states.

Related:Maximum ACP reimbursement for May down to $14 – FCC

Push to reconsider

But to save the ACP, time is of the essence. And advocates are asking that the Commission reconsider. The FCC is set to vote on its draft order on April 25, and it's expected to pass on party lines with the Commission's three Democrats voting yes.

"While we respect the Chairwoman's concern about increasing consumers' broadband bills—nobody wants that— the draft order itself admits that the record is complex, which is why we need a further developed record to reach a definitive conclusion on that question," said Gigi Sohn, a spokesperson for the Affordable Broadband Campaign, in a statement.

"If the FCC does not reverse course, it will close the door to a possible permanent replacement for the subsidy that keeps over 23 million households connected," Sohn added, referring to the ACP.

Shirley Bloomfield, CEO of NTCA–The Rural Broadband Association, echoed those concerns in a statement warning that the FCC's forbearance decision in the draft order "could effectively foreclose much-needed debate in the near term about how to preserve and advance universal service and potentially save an important initiative like the Affordable Connectivity Program."

Related:Return of net neutrality rules unlikely to spark big changes at ISPs – Levin

Plot twist: Discharge petition filed

Without successful action to save the ACP, the program is set to slash its benefit to $14 from $30 during the month of May, before officially running out of funds and cutting off 23 million low-income households from the monthly broadband subsidy.

However, in Congress, where a $7 billion ACP extension bill has been collecting co-sponsors since January but has been prevented by House Speaker Mike Johnson (R-LA) from coming to the floor, Congresswoman Yvette Clarke (D-NY), who spearheaded the bill, has officially filed a discharge petition in an effort to move the bill forward. If passed, the petition would allow the ACP extension bill to come to the floor without the blessing of the House Speaker.

With 224 sponsors on the ACP legislation, including 21 Republicans, the bill technically has more than enough support to pass – if Clarke can get the necessary votes for her discharge petition first. A discharge petition requires 218 votes, but early reporting suggests Republicans may not be willing to bypass the House speaker.

"I implore my colleagues to join me by signing the discharge petition," said Clarke in a press release. "This will ensure the Affordable Connectivity Program Extension Act receives the vote it deserves on the floor of the House of Representatives. We cannot turn our back on the progress made in closing the digital divide."

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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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