In his recent supplemental funding request, President Biden asked Congress to appropriate an additional $6 billion dollars to continue the support provided by the Affordable Connectivity Plan. The ACP is now supporting internet connections in over 21 million households. As previously discussed on this site, in a January 2022 Commission Order the ACP was created and was initially funded by the 2021 Infrastructure Investment and Jobs Act. The ACP provides reimbursement of a monthly discount of up to $30/month toward the purchase of internet service for eligible households and a one-time discount of $100 for the purchase of a computer, laptop, or tablet from participating providers. In tribal areas, the monthly discount reimbursement can be up to $75/ month. Participating carriers receive reimbursement for the amount of the discounts from USAC.
In August 2023, the Commission modified the ACP by adding enhanced discounts available for monthly broadband services provided in high-cost areas by carriers participating in the ACP. The new rules adopted at that time provide for reimbursement of a discount of up to $75/month for eligible households in high-cost areas served by participating ACP providers. The Commission believes that the enhanced benefit provisions will help to encourage additional providers to participate in the ACP in high-cost areas. Those carriers that opted for the EA-CAM offer are required to participate in the ACP. ACP providers are not required to offer the high-cost benefit and those participating carriers wishing to offer the enhanced benefit must file a petition with USAC seeking approval to offer the higher benefit amount of up to $75/month. The following are key elements that must be satisfied in order to receive approval to offer the higher discount:
* In determining eligibility to offer the enhanced benefit, USAC will use the definition of high-cost areas established by NTIA for the BEAD program.
* An ACP participant wishing to offer the enhanced benefit must demonstrate that the availability of only the $30/month benefit would cause “particularized economic hardship to the provider such that the provider may not be able to maintain the operation of part or all of its broadband network”. Providers seeking to offer the enhanced benefit must provide financial documentation supporting their claim of economic hardship.
* The enhanced benefit is only available to facilities-based providers.
* The enhanced benefit reimbursement will not exceed the amount actually charged to the subscriber for the service.
* To account for changing financial circumstances, ACP providers that are approved to offer the enhanced benefit must resubmit documentation on an annual basis showing a particularized economic hardship exists in order to continue offering the enhanced ACP benefit.
The enhanced ACP benefit may prove beneficial to certain providers whose territory includes high-cost areas and a significant number of low-income subscribers. In these scenarios, the standard $30 benefit reimbursement may not be enough to make the carrier’s broadband service affordable. The higher discount could make the purchase of broadband service more affordable leading to an increase in broadband service sales with the resulting revenue providing support for the ongoing maintenance and provision of the providers’ broadband networks.