“When the Affordable Connectivity Program runs out of money during the month of April, internet costs are expected to rise for 23 million US households — nearly 1 in 5 households,” according to CNN. Collectively, the program’s participants save nearly $700 million each month. The end of the ACP means that participants could see their monthly internet bills increase by $30 to $75.
According to the Benson Strategy Group, “The loss of the ACP will disproportionately affect some demographics. 41% of ACP participants are in the South and 49% are military families; 95% of participants say the end of the program will cause financial difficulties.”
SEE THEIR INDEPTH STUDY HERE: Benenson Strategy Group
If the program doesn’t get extended, ACP participants will need to find other options for affordable home internet. There’s no single alternative that can replace the $14.2 billion ACP, but there are several government programs, nonprofits and discounted plans from providers that can help ease the transition.
Not only will low-income customers suffer, so will the Big Three Carriers as well as many of their MVNOs. I had the opportunity to speak with Sue Marek, Fierce Wireless Contributing Editor. Sue has been reporting on the telecom and tech industries for more than 25 years. Her March 29th article “Prepaid Biz Likely to Suffer from Demise of ACP” paints a very accurate picture of who stands to lose the most.
She points out that some of the biggest ACP providers are wireless companies and that a December survey conducted by the FCC found that 29% of ACP recipients said they would drop their service if they lost their ACP benefit.
ACP data from the FCC that was released in April 2023 indicates that some of the biggest ACP providers are wireless companies.
For example:
- MVNO Q Link Wireless received $288.2 million in ACP funding
- Tracfone Wireless, which is now owned by Verizon, received $250.2 million
- T-Mobile received $208 million
- AT&T received $188.4 million
- Dish Wireless received $119.7 million in ACP funding.
Sue concludes her article by stating, “although there is bipartisan support for an extension to the ACP– the Affordable Connectivity Program Extension Act of 2024 – which would add $7 billion in additional funding to the program, the bill’s sponsor, Senator Peter Welch (D-VT), recently told the New York Times that it’s “tough to be optimistic” about it passing.”
Verizon was the only one of the Big Three carriers to mention the possible loss of ACP customers and funding in their Q1, 2024 analyst call and how it might affect revenue loss. However, Mike Dano, Light Reading’s Editorial Director, reported just reported that AT&T said it will continue to offer its ‘Access from AT&T’ plan – which provides 100 Mbit/s speeds for $30 per month – even after the US government’s Affordable Connectivity Program (ACP) ends.
Mr. Dano also reported that losing the ACP program will affect Big Cable big time:
“New Street Research estimated that AT&T counts around 1.2 million ACP customers. That’s just behind Charter’s leading 5.4 million ACP customers and Comcast’s 1.4 million, and just ahead of Cox’s 737,000.”
Additionally, many MVNO’s have built their entire business models on providing access to the ACP and risk losing their sole means of livelihood should the funding not be extended past the end of April.
Non- Profit Organizations That Can Help
Should the Affordable Connectivity Program Extension Act of 2024 fail to pass, there are other non-profit organizations around the country with the goal of closing the digital divide. Some help with monthly internet costs, while others provide devices that connect you to the internet. These organizations all received nonprofit status from the IRS.
- Connect All: Part of the InterConnection nonprofit, Connect All provides refurbished computers to low-income users. Eligibility requirements are similar to those of the ACP: participation in federal programs like SNAP or SSI will automatically qualify you for devices.
- EveryoneOn: EveryoneOn is one of the most wide-ranging internet nonprofits out there. You can use its locator tool to find low-cost plans and computers in your area, enroll in digital skills courses and find local events that distribute devices.
- Human-I-T: This nonprofit accepts donations from corporations, refurbishes the devices and sells them at a discount to veterans, low-income households, seniors and other groups that qualify. It also offers low-cost internet through its mobile hotspot devices for less than $30 per month.
- Internet for All Now: This is an initiative of the nonprofit California Emerging Technology Fund that helps Californians find low-cost plans in their area. People in California can call and speak with a trained expert, but the website has resources that anyone in the country can use.
- National Digital Inclusion Alliance: The NDIA is a well-known hub for research and policy aiming to close the digital divide, and while it doesn’t offer low-cost internet itself, it’s a helpful resource for navigating what’s out there. You can also use this map of NDIA affiliates providing broadband adoption services to see what’s available in your area.
This is not a political column by any means but this author is hopeful that Congress will get off of their butts and actually do something that impacts 23 million households as prices on other goods and services continue to rise.
The Boon of Wireless Podcast
Atrium Unlimited Consulting (www.atriumunlimited.com) podcast, The Boon of Wireless Podcast (continues with almost 800 subscribers in only six weeks!) Thanks to everyone for their support thus far!
Last Thursday we had a tremendous discussion with Cat Coughran McIntosh, Founder and CEO of SkyPeak Technologies (skypeaktechnologies.com).
Skypeak Technologies is tackling the all-too-common issue of limited bandwidth for streaming video content, offering an innovative solution that adjusts data rates for an optimal streaming experience. Next up is Bob Lafon, Co-Founder of Capital Growth Partners and creator of the Mobile Disrupt Show coming up in June in Las Vegas. Look for this episode on Thursday, April 11th.
Check it out and also view or listen to the rest of the podcasts at www.theboonofwireless.com/watch
If you’d like to be a guest and have a compelling story to tell, we’d love to talk with you. Reach out to us at one of the e-mail links above. And please watch, like and subscribe (it’s free!).
In closing, if you are interested in having a conversation about becoming an MVNO or just want to chat about the business, feel free to reach out. Until then,
Good Selling!
Jon