Affordable Connectivity Program

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Yesterday the FCC issued an Order detailing the steps required of ACP providers should the program end due to lack of funding:

In a letter to Congress dated January 8, 2024, FCC Chairwoman Rosenworcel provided an update and status report on the Affordable Connectivity Program (ACP). The program was created as a result of the Infrastructure Act and was initially funded at $14.2 billion dollars. The ACP currently provides discounts that enable nearly 23 million households to purchase affordable broadband service. The Chairwoman points out that additional funding is urgently needed to continue the program. It’s expected that current funding for the ACP will be exhausted by April 2024. The Biden Administration has requested an additional $6 billion for the ACP as part of its domestic supplemental funding request which would extend the ACP through the end of 2024. She notes that due to the lack of additional funding, the Commission will begin taking steps to start orderly wind-down procedures as provided in the ACP Order (adopted January 2022) in order to provide participating providers and households with sufficient time to prepare for the projected end of the ACP.

On January 11, 2024, the Commission adopted and released an Order announcing procedures and guidance for the wind-down of the ACP consistent with the ACP Order. These procedures include the process for notifying households about the impact of the program termination on their bills and the freezing of new enrollments to the program. Guidance is offered to providers regarding advertising, awareness, and outreach requirements and the timing of claims submissions to USAC for reimbursement of provided discounts. The current USAC forecast projects that there are sufficient funds to pay all provider claims through the April 2024 service month. The timeline for the wind-down is based on this forecast, however, the projected last fully funded month could change based on ACP enrollment trends or if additional funding is provided by Congress after release of the January 11, 2024, Order.

The Commission will announce the upcoming end of the ACP approximately 60 days before the end of the last fully funded month which is projected to be April 2024. Based on this forecast, it’s anticipated that this announcement will occur in late February 2024. This announcement will trigger certain required communications by providers to ACP subscribers regarding the end of the ACP and the impact on their bills as well as options going forward to stay connected, however, the initial communication to customers is required to occur before this announcement. The Order requires providers to inform customers of the end of the ACP at least three times. The first notice must be sent as soon as practicable, but no later than 14 days after the release of the January 11, 2024, Order or by January 25,2024. This initial notice must generally advise ACP households about the possibility of the ACP termination and the potential impact on their broadband service and bills. The second notice must be sent within 15 days after the announcement of the last fully funded month. As stated above, this announcement is anticipated to occur in late February 2024. The third notice must coincide with the last bill or billing cycle in which the full ACP benefit is applied.  The second and third notices must indicate that the ACP is ending and should include the date of the last bill reflecting the full ACP benefit and the amount that the household will be billed once the ACP benefit is no longer available. The second and third notices must also inform ACP households of their ability to change their service to a lower cost service or to discontinue service. The Order requires an affirmative opt-in by households electing to continue service after the end of the ACP.

Fearing that a spike in ACP enrollments could hasten depletion of the remaining ACP funds, the Order will freeze new subscriber enrollments beginning February 8, 2024. As result, new subscriber enrollments in the program will not be accepted after February 7, 2024. In addition, new provider enrollments will also not be accepted after February 7, 2024 and current ACP providers will no longer be required to advertise the availability of the ACP effective February 8, 2024.

Regarding the submission to USAC of reimbursement claims by providers, the Order creates a shortened timeline for provider claims. Beginning with the February 1, 2024, snapshot, providers are required to submit to USAC their reimbursement claims for households captured on the snapshot report by no later than the first day of the second month after the snapshot date or April 1, 2024. In subsequent months, claims must be submitted no later than the first day of the second month following the snapshot date. Reimbursement claims filed after the deadline date will not be processed. Should the ACP receive additional funding, the Commission will re-evaluate the need to continue to require providers to submit claims on this new timeline. The Order also addresses the process that will be followed if reimbursement claims in the final month of the ACP exceed the remaining funds. In this event reimbursement payments will be made on a pro-rata basis.

As discussed above, the January 11, 2024, Order was necessitated by the possibility that funds allocated for the ACP will be exhausted by April of this year. The Administration’s request for an additional $6 billion is still pending in Congress. Additionally, on January 10, 2024, a bicameral, bipartisan bill was introduced in Congress which would provide additional funding for the ACP.  The Bill entitled the Affordable Connectivity Program Extension Act would provide $7 billion of additional funding for the ACP and if enacted would extend the ACP to some point in the future, certainly beyond the projected April 2024 funding exhaustion date cited by the Commission in the recent Order. Should additional funding materialize the wind-down procedures described above will undoubtedly be delayed until such time as funding for the ACP again becomes an issue. However, if additional funding is not provided, the wind-down procedures will need to be implemented by ACP providers and certain actions will be required in the very near term.

ICORE will continue to closely monitor this important issue and will provide updates as the situation unfolds.

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