Fixing ACP's funding gap 'biggest issue' on 2023 horizon – ACA Connects CEO
WASHINGTON, D.C. – Math suggests that funding for the Affordable Connectivity Program (ACP) will be depleted sometime in early 2024. That means the clock is ticking for the US government to move the needle in the coming months.
"I think the biggest issue for the second half of this year is how that gets resolved," Grant Spellmeyer, CEO of ACA Connects, said here Wednesday during a presser at the organization's annual Summit.
Spellmeyer, whose organization represents hundreds of small and independent US cable operators, said the clock is running out at a time in which governors will be lavishing more attention on the Broadband Equity, Access, and Deployment (BEAD) program. He said this leaves a "limited window" for the ACP funding issue to be fixed.
But it's clear that few have their eye on the ball. "The silence [about the ACP funding issue] has been notable," Spellmeyer said. "Based on my trips around the Hill, a handful of committee councils are aware of the situation and pay attention to it ... Once it runs out of money, it's just going to stop."
Spellmeyer warned that there's still no clear answer to the problem, but suggested that the ball needs to get rolling by this fall. "I'm struggling to see how they thread the needle between the House that doesn't want to spend money on anything," he said.
A stoppage will impact millions of US consumers who rely on ACP to help fund their connectivity needs. ACP, the $14 billion successor to the FCC's original EBB (Emergency Broadband Benefit) program created during the early phases of the pandemic, provides broadband service discounts to eligible low-income households.
Impact would be felt by ACA Connects members
Amid the specter of a funding shortfall, Spellmeyer said he pressed the ACA Connects board to keep an eye on the issue, as it is poised to have "ripple effects" to each home town and community that is served by ACA Connects members.
Boycom Vision, a small operator based in the southern Missouri town of Poplar Bluff, is one example.
Patricia Jo Boyers, Boycom's feisty CEO and the chair of ACA Connects, said several new broadband customers signed up during the early days of EBB and via its successor, ACP. She estimates that about 5% of Boycom's customer base currently participates in the program.
She suggested that all ACA Connects members be proactive about creating a Plan B in case ACP funding runs out.
"We're making preparations," she said. Boycom, Boyers noted, is already thinking about packages priced at levels that are manageable for customers who benefit from ACP today.
Boyers is hopeful that the government will sort it out. While her preference is that the government stays out of private business matters, she admits the program has been "very effective."
Efforts to tighten the affordability gap under threat
Spellmeyer believes an ACP funding shortfall could undo positive efforts to bridge broadband's affordability gap.
"We have started to close that affordability gap, and to see it fall back to zero again really kills the momentum for getting all the way where the program's supporters believe it should be," he said.
Earlier that day, Senator Ben Ray Luján (D-New Mexico) said he isn't sure that an ACP refunding initiative would have the votes. But he remains encouraged because ACP is a bipartisan initiative.
Spellmeyer said both sides will need to work something out, or at least look into short-term extensions.
"It's going to take a combination of Bernie Sanders and Ted Cruz in order to move this thing," he said, referring to fellow senators on opposing sides of the aisle. "For those who watch the Hill, that's the challenge."
Interest and wariness about BEAD
The lunch presser also dug further into ACA Connects' concerns about BEAD and how the organization will try to guard against funds going to competitive overbuilders rather than focusing on unserved areas.
It's not clear yet how ACA Connects' members will participate in BEAD, but the "vast majority" of them are interested in exploring the opportunity, Spellmeyer said.
He believes participating will come down to how allocations are done state-by-state and which areas are eligible.
"I think that will highly drive participation by smaller members," Spellmeyer said. "I have concerns in some states that you will see governors with an open interest in handing the entire state to one provider. That doesn't suit my members interests because many of my members serve a county or part of a county or two counties."
Boyers said she's wary of BEAD being an onerous process for smaller operators.
"We don't have a huge staff," she said, noting later that Boycom has 17 employees and a department of engineering of one. "When applications are made, I'm generally the one who does it."
But in the meantime, Boyers said she's made efforts to know the state's broadband director and will explore any opportunities that are available to Boycom in Missouri.
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— Jeff Baumgartner, Senior Editor, Light Reading