This commentary is adapted from the remarks of Commissioner Anna M. Gomez of the Federal Communications Commission to the 2024 State of the Net Conference in Washington, D.C. on February 12, 2024.
I want to talk about our experience with the Affordable Connectivity Program and why allowing this program to expire is a really bad idea—bad for our economy and bad for families all across this country.
Congress created the Affordable Connectivity Program in November 2021 because they recognized that connectivity is essential to our lives. The program’s creation reflects another insight. Our government’s historic approach of narrowing the digital divide was insufficient because it focused almost exclusively on expanding broadband’s availability. The ACP is the most successful tool we’ve ever had to close the digital divide, because it finally addresses the long-overlooked yet critical affordability piece of the puzzle.
The enrollment numbers for the program have been staggering and prove definitively that too many Americans have been missing out on the opportunities of the Internet Age because they couldn’t afford a home broadband connection. We now have over 23 million households enrolled in ACP nationwide. Think about that. That means the ACP is impacting one in six U.S. households. Of that 23 million, over 5 million had never been connected before. Many more had what can only be described as precarious connectivity—connectivity that could be easily lost if the family had to make hard choices on tight budgets in any given month.
But if the ACP does not receive funding, the program will run out of money in April. Just like that, millions will lose access to the connectivity on which they rely for education, health care, their job, and more.
I would also note that nearly half of all ACP subscribers are military families. Considering their sacrifices for our country, it hardly seems right to yank away the support for which they’ve signed up.
There are also 4 million senior households enrolled in ACP. Those living on a fixed income from Social Security are going to have limited alternatives to stay connected.
The end of ACP could be disastrous for families who are already struggling to pay the bills. That is certain.
But, something I hear talked about less are the costs to our economy and the negative downstream effects if ACP ends. Specifically, that ACP ending will slow economic growth, increase costs to the government, and cause stranded investment in rural areas. It is, as they say, penny wise and pound foolish.
Let me explain.
First, if ACP ends, it will slow our country’s economic growth by limiting economic opportunity. Access to communications technology is a game changer for economic opportunity. Our economy relies on many different types of innovators, small entrepreneurs, and business owners, who depend on connectivity to develop their skills, connect to jobs, and launch new businesses. There are so many varied paths to success in this country. But it is hard to identify a path that does not require connectivity.
This is about the future of our economy, and it is a bipartisan issue. Again, the ACP was borne from the Bipartisan Infrastructure Law. Democratic Senator Peter Welch [D-Vermont] and Republican Senator J.D. Vance [R-Ohio] have introduced a bill to extend the program. Representatives Yvette Clarke [D-New York] and Brian Fitzpatrick [R-Pennsylvania] have introduced the same bill in the House with two dozen co-sponsors, evenly divided between Democrats and Republicans. Former republican Commissioner Mike O’Reilly wrote an op/ed advocating for funding the ACP. He argued that online GEDs and college courses not only promote greater career options for recipients, but also lower the costs of overall education investments and help minimize participation in other social programs.
It’s not mere speculation to say that ACP subscribers are using their connections to engage in economic activities. We have survey data. For example, nearly 50% of ACP subscribers report that they use their service to apply for jobs or to work. Having connectivity has been shown to increase labor force participation and decrease the probability of unemployment.
Now, think about it from the employers’ side. For the past few years, we’ve been hearing non-stop about the labor crunch. Businesses are having a hard time finding workers. Currently, we have 9 million job openings. The main way to apply for the overwhelming majority of those jobs is an online application process. If we risk the ability of one-sixth of U.S. households to get online, that’s only going to make it harder for businesses to find qualified applicants.
So we have a choice. We can allow ACP to expire, leaving millions without the connectivity that they need to participate in work, with all the accompanying negative impacts on the labor market. Or, we can ensure the long-term success of ACP as a strategic investment in the economic stability and competitiveness of our nation. Seems like a pretty clear choice to me.
Let me make it clearer. Allowing ACP to expire would not only have negative economic impacts, it would also lead to increases in government spending. How’s that? Many of the services government supports can be delivered at a lower cost online.
Take health care, for example. Telemedicine visits have been shown to be 23% less expensive than in-person visits. Now, get this: A staggering 72% of ACP subscribers have reported that they have used their ACP support service for telehealth services. Given that the Medicaid eligible population and the ACP eligible population overlap significantly, many Medicaid patients will lose access to telehealth services along with their ACP benefits, thereby raising health care costs for these government programs.
Similarly, many private health insurers, seeing how using telemedicine is creating significant cost savings, have incorporated easy access to telemedicine into their services, often eliminating co-pays for customers, reducing costs for the companies and the customers. That option won’t be there for the families that lose their connectivity.
Here’s another reason why failure to invest in the continuation of ACP costs more money than it saves. The broadband deployment marketplace is a virtuous cycle. The availability of affordable high-speed broadband networks drives demand for home connectivity. The more potential subscribers you have, i.e., the more demand you have, the greater the incentives to invest in upgrading and expanding high-speed networks.
Now, consider how these market realities apply to our nation’s historic investment to deploy broadband to everyone, everywhere. In addition to establishing the ACP, the Bipartisan Infrastructure Law included $42.5 billion for network deployment. The Broadband, Equity, Access and Deployment Program, or BEAD as it is affectionately known, is administered by NTIA. You heard Alan Davidson talk about it during his Fireside Chat at the top of today’s program.
Notably, Congress made participation in ACP or a low-income program a requirement for providers who want to receive these funds. That is because ACP and BEAD are intended to address two separate, but equally vital pieces of solving the digital divide – affordability and access.
In rural areas especially, you cannot consider one without the other. Without affordability, we risk some of the historic $42.5 billion investment becoming stranded. For low-income rural Americans, the ACP has been a lifeline to ensuring they have access to connectivity. Many rural consumers that have been waiting for connectivity to finally come to them, however, may be disappointed when the buildout does not go as far as expected. The likely take rate is a critical piece of providers’ business plans.
This is not complex math, without ACP, fewer households can afford service and this will impact the economics of deploying broadband infrastructure. Subscribership concerns could result in less rural areas being served and the historic investment through BEAD buying less build out. And some buildout may be unsustainable without sufficient subscribership. Without ACP and a sustainable customer base, fewer customers in most hard to reach areas of the country will be connected by this once-in-a-generation investment in broadband.
Put simply – without ACP, our dollars will not go as far and we will fail to maximize the benefits of this investment.
Bringing all of this full circle, just remember that widespread broadband deployment and adoption have ancillary economic and societal benefits.
A report by the Federal Reserve Bank of Richmond found that expanded access to broadband in rural areas contributes to job growth, population growth, more new business formations, higher home values and lower unemployment rates.
Purdue University researchers examined an effort to promote broadband adoption in rural Indiana, and found that the economic benefits of the investments were three to four times greater than the costs.
The Affordable Connectivity Program is about making sure everyone, everywhere in this country has access to that connectivity—access to real opportunity in the Internet age. … By ensuring that all Americans can afford high-speed Internet, we are investing in our nation’s future prosperity and unlocking the full potential of our citizens.
We’ve made too much progress to turn back. Let’s save the Affordable Connectivity Program. Let’s move forward, together.
Commissioner Anna M. Gomez is a member of the Federal Communications Commission.
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