By Daniel Lyons

Earlier this month, Congress allocated $65 billion in broadband subsidies as part of the Infrastructure Investment and Jobs Act. When the bill passed the Senate last August, I wrote a blog post examining the provisions targeting broadband accessibility, which focus on those (largely rural) parts of the country that lack access to modern networks. This post looks at the act’s efforts to address the other half of the digital divide: broadband affordability. Building on previous initiatives, the act represents a potentially significant improvement over previous efforts to help low-income families get online. But as always, much will depend on how the Federal Communications Commission (FCC) carries out its new congressional mandate.

The Affordable Connectivity Program and its ancestors

Assistance for low-income families has been a cornerstone of the American universal service program for over a generation. The FCC established Lifeline in 1984, which provided low-cost landline telephone opportunities for low-income families. As communications networks evolved, Lifeline expanded to cover wireless telephone plans and, more recently, broadband networks. Currently, eligible households can receive a $9.25 monthly subsidy on qualifying service plans.

Recognizing the importance of connectivity during the COVID-19 pandemic, Congress created a temporary program to provide additional assistance as part of last year’s coronavirus relief efforts. This Emergency Broadband Benefit (EBB) gives up to $50 per month (and separate equipment subsidies) to low-income families to keep them online throughout the pandemic. Like Lifeline, the FCC gives the subsidies directly to broadband providers, which then pass the savings along to the recipient in the form of reduced bills. But Congress expanded the universe of eligible broadband providers beyond those involved in Lifeline. Congress intended EBB to be a temporary measure, to disappear when the $3.1 billion fund is exhausted or six months after the administration declares the pandemic over.

The Infrastructure Investment and Jobs Act allocated an additional $14 billion to a modified, more permanent EBB program. Now rechristened the Affordable Connectivity Program (ACP), the initiative will provide $30 per month in assistance on an ongoing basis, plus equipment subsidies. Unlike the EBB benefits, consumers can apply the subsidy to any plan the provider offers to the public. Providers are prohibited from running a credit check as a condition of service, but they may terminate service to customers who fall more than 90 days behind on the non-subsidized portion of their monthly bills.

Assessing Affordable Connectivity

As noted above, there is much to like about the new ACP. For example, the consumer choice provisions reduce the soft paternalism reflected in Lifeline and the EBB, where government dictated which plans low-income households could use. The goal of any low-income subsidy should be to increase the recipient’s purchasing power, so they can participate in the marketplace like any other consumer. For that reason, many (including me) have long advocated for giving vouchers directly to consumers. ACP does not go that far, but allowing recipients to apply the benefit to any commercially available program allows recipients to choose the plan that best fits their family’s specific needs.

Taxpayers should also appreciate that the program is funded through the traditional appropriations process rather than the opaque and increasingly unstable universal service program. Putting the program on the federal budget allows the initiative to be fully funded without raising the Universal Service Fund surcharge (which would have the counterproductive effect of increasing the cost of these services in the interests of “affordability”). It also subjects the program to direct congressional oversight, which could reduce the allegations of waste, fraud, and abuse that have dogged Lifeline and other telephone-era universal service initiatives.

But ACP replicates one significant flaw of its predecessors: It fails to include metrics to measure the program’s success. I have long criticized Lifeline for simply extending a telephone-era subsidy to broadband without examining who is at risk of losing connectivity and how much it would take to keep that population online. So has the Government Accountability Office. With billions at stake, it is vital that Congress and the FCC evaluate the effectiveness of the program, to make sure the subsidies are achieving the goal of narrowing the digital divide efficiently.

To its credit, the FCC has made far more data available on EBB deployment. The results have been mixed: Benton Foundation’s John Horrigan suggests that these early data show “the Emergency Broadband Benefit is reaching people in the places that have the most people in need.” But Will Rinehart of the Center for Growth and Opportunity argues that “paradoxically, however, the program is not going towards communities where there is little uptake of broadband.”

The ACP could make great strides toward closing the broadband affordability gap. But Congress and the FCC should learn from the EBB experiment and revise eligibility requirements and subsidy amounts to assure this $14 billion fund narrows the digital divide as efficiently as possible.

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