Experts Worry Over Possible Demise of Broadband Subsidy for Low-Income Households

High speed internet connections allow children in rural and urban low-income areas to access the latest education services and workers to telecommute.shutter_m/iStock

Experts are concerned about the future of broadband internet access for low-income consumers if a popular federal subsidy program runs out of funds in 2024, especially since more people are signing up for the monthly subsidy.

“As the clock is winding down, participation is going up,” said Paul Garnett, CEO of the Vernonburg Group.

According to its website, The Vernonburg Group is dedicated to providing universal broadband access.

Garnett was part of a panel discussion on the Affordable Connectivity Program (ACP) hosted by the Brookings Institution on June 5.

A customer tests a smartphone during the launch of the new iPhone XS and XS Max sales at "re:Store" Apple reseller shop in Moscow on Sept. 28, 2018. Tatyana Makeyeva/Reuters

The Federal Communications Commission administers the ACP, which provides $30 discounts for broadband services to low-income consumers. The program offers $75 for qualified residents of tribal lands.

It also provides $100 for a tablet or laptop computer if the consumer contributes more than $10 but less than $50.

The ACP has provided $14 billion in subsidies through the Investment in Jobs Act of 2021. While the program does provide at least one device for each qualified household, Garnett said its focus has been providing broadband internet connections.

“It’s primarily been a services program,” Garnett said.

Unprecedented Investment

Nicol Turner Lee, a senior fellow for Governance Studies at Brookings, said the pandemic proved the benefits of broadband.

She pointed out that children in rural and urban low-income areas could continue school. In addition, many workers could work from home, and telemedicine helped bridge the gap created by lockdowns and restrictions.

“What happens if this program goes away?” Lee asked the panelists.

Traci Morris, Director of the American Indian Policy Institute at Arizona State University, said the Indian nations had made significant infrastructure investments based partly on the ACP’s promise of affordable access.

“This investment has been unprecedented,” she said.

She said ACP’s demise would be a serious problem. The end of ACP could make broadband internet service on tribal lands a difficult sell.

“Our networks would become unsustainable. We need this program,” she said.

Naomi Jordan-Cook is a member of Black Churches for Digital Equity. According to a 2021 study by Pew Research Center, only 71 percent of black adults report having broadband internet in their homes.

Loss of ACP Would Harm Trust

Cost is the top reason for not having broadband.

Cook said ACP has been instrumental in promoting broadband access through predominately black churches.

She said many older adults don’t trust the government and the death of ACP could eliminate their trust in the government’s ability to provide service.

Michael Culp of Albemarle County, Virginia, said losing the program would drive up the cost of broadband service.

Culp is the Director of the Broadband Accessibility and Affordability Office of Albemarle County.

He said ACP enabled small, local internet service providers to compete.

The loss of ACP would likely shut them down, leaving just a few large national companies.

“It would take us back to where we started,” Culp said. “Competition would be hurt. The rural areas will suffer the most.”

But access isn’t the only benefit of the program. The panelists said ACP funding had enabled low-income households to get computers to enjoy the full benefit of broadband.

Smartphone Influence

According to Pew, the advent of the smartphone has impacted the number of homes with high-speed internet access.

Younger people and low-income households are more likely to be smartphone-only listing the high cost of connectivity and the convenience of smartphones as reasons for not having broadband service.

The 2021 Pew study found that 27 percent of adults in households that earn less than $30,000 will be smartphone-only users. Age is also a factor, the study indicates.

“Smartphone dependence is more common among younger rather than older adults: 28 percent of adults ages 18 to 29 are in this “smartphone-only” category, compared with 12 percent of those 30 and older,” the Pew study reads.

Cook said the program provided low-income families with essential tools for escaping poverty.

“Now the single Mom doesn’t have to ask the questions, ‘Do I buy milk, do I buy bread, or do I keep the internet on so my kids can do their homework?” Cook said.

Garnett said the program began with more than $17 billion and had approximately $8 billion left. Spending an average of $500 million a month, the plan is on track to go broke by mid or late 2024.

He said that as the groups watch the ACP deplete and hear members of Congress argue over which programs should be cut to deal with the country’s $31 trillion debt, they have to decide.

“If you see the cliff, do you take your foot off the gas, or do you pump the brakes?”