Affordable Connectivity Program Update

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In a Client Bulletin dated 1/12/24, we provided notice of a FCC Order (Order) announcing the wind-down of the Affordable Connectivity Program (ACP) due to a lack of funding needed to support the program on an ongoing basis. In this Bulletin we reported that the FCC expected that April 2024 would be the last month that providers would receive full reimbursement for discounts provided to eligible households under the ACP and discussed the Order’s requirements regarding customer notices regarding the end of the ACP.

On 3/4/24, the FCC issued a Public Notice providing additional information regarding the wind-down of the ACP. This Notice confirms that due to the lack of additional funding the last fully funded month for the ACP benefit is April 2024 and only a partial benefit reimbursement will be available for May 2024. ACP providers have the option to claim and pass on the partial benefit to enrolled households for May 2024. After May 2024 the ACP will no longer support any benefits to enrolled households. The Notice discusses the process related to the partial reimbursement for May 2024, the requirement for providers to provide additional customer notices, and provides guidance regarding the consumer protections for ACP households.

Regarding the month of May 2024, providers that choose to provide a benefit in May should plan to pass through a reduced benefit to households that have opted-in to continue to receive broadband service after the end of the full ACP benefit in April 2024. After May 2024, providers will not be able to seek reimbursement for discounts provided to ACP households. Reimbursements for May 2024 will be on a reduced pro-rata basis. To help providers to determine the level of discounts and reimbursement that will be available for May 2024, the FCC intends to release more information in March 2024 regarding the level of reimbursement available to providers for May 2024. The FCC will also provide at that time additional information for providers about notifying USAC of their intentions to seek reimbursement for May 2025.

Regarding customer notice requirements, the Notice points out that providers were previously required to provide an initial notice to ACP subscribers advising them of the possibility that the ACP might be ending and the impact on their bill. Providers are now required to provide a second written notice to subscribers by March 19,2024 advising them that the ACP is ending and providing the impact on their service and bills. A third notice is required that coincides with the last bill to which the full ACP benefit is applied (April 2024). Specifically, these notices must provide the date of last bill reflecting the full ACP discount, the amount the household will be billed for their selected broadband service after the ACP discount is no longer available, and information explaining their right to change their service or opt out of continuing their service at the end of the ACP.

In addition to the customer notice requirements discussed above, the 3/4/24 Public Notice also establishes notice requirements about the partial benefit available for May 2024. Providers that intend to seek and pass through this partial benefit for May 2024, where the household has opted in to continue to receive and pay for broadband service after April 2024, must provide written notice to those households that the discount amount applied to the May 2024 bill may be less than the benefit that household has been receiving. These written notices must also state that after May 2024, the household will be subject to the provider’s undiscounted rates and general terms and conditions. The 3/4/24 Public Notice states that the information relative to May 2024 may be included in the other required notices discussed above or sent separately.

Finally, in regard to customer notices, providers are encouraged to include information about their lower cost offerings and low-income programs, or a phone number or link to a website where ACP subscribers can review such information. Providers are also not limited in the number of notices they may send to ACP households (beyond the mandatory notices described above) and are encouraged to correspond frequently with their ACP households.

The 3/4/24 Public Notice also addresses the consumer protection requirements in the FCC’s ACP related rules and emphasizes that ACP providers remain subject to those rules during the wind-down, except for those related to new ACP enrollments which were rendered moot when the ACP enrollment freeze took effect on 2/8/24. This Public Notice also addressed the Broadband Label Order’s requirement that providers display at the point-of-sale labels that indicate, among other things, that they participate in the ACP. Given the upcoming end of the ACP, this requirement will not continue.

Without additional funding from Congress the ACP will end as described above. FCC Chairwoman Rosenworcel sent a letter to Congressional leaders on 3/4/24 notifying them that the last fully funded month for the ACP will be April 2024 and urged immediate action by Congress to provide additional funding for the ACP. We’ll continue to follow this important issue and provide updates as the situation evolves.

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