C ongress has a chance to end a pandemic-era welfare program by doing nothing, and proponents of the program are pushing hard to keep it funded. The Emergency Broadband Benefit Program was created on a temporary basis in the end-of-the-year omnibus spending bill in 2020, supposedly as a pandemic-relief program. Then, in the bipartisan infrastructure law, it was rebranded as the Affordable Connectivity Program (ACP), a non-emergency internet subsidy program. It provides $30 per month to qualifying households for internet service. Over 20 million households have enrolled.
The program stopped accepting new applicants in February and ran out of money in April. The program is essentially over already, and all Congress has to do to keep it that way is what it does best: nothing. But a bipartisan group of legislators, the Biden administration, and internet-service providers all want the program to be extended and given more funding. On Thursday, the Senate Commerce Committee will hold a hearing about broadband affordability, with ACP on the agenda.
The Federal Communications Commission, which administers the ACP, published results from a survey of ACP recipients. It used those survey results in a letter from FCC chairwoman Jessica Rosenworcel to the Senate Commerce Committee to portray the ACP as a success story. “I want you to know that the agency remains ready to keep this program running, should Congress provide additional funding,” Rosenworcel wrote on April 2. “We have come too far to allow this successful effort to promote internet access for all to end.”
But the survey results are not nearly as positive about the ACP as the FCC is making them out to be. The desire to keep web welfare running is likely motivating this slanted framing of the survey results, and they will be quoted by proponents to justify sinking billions more into this unnecessary program.
How the FCC Is Spinning Its Survey Results
The FCC published its survey of ACP recipients on February 29. It had 5,317 households respond. It summarized the results in four “highlights.” Let’s go through each of them.
Highlight 1: More than three-quarters (77%) of the survey respondents say losing their ACP benefit would disrupt their service by making them change their plan or drop internet service entirely.
This conflates two issues to make the problem sound much greater than it would actually be. Changing your plan is not the same as losing service. People change their internet plans all the time, often in response to pricing promotions that internet-service providers offer on their own. That kind of “disruption” is not a concern for public policy.
The 77 percent number comes from the question where the survey asks what recipients would do if their internet bill was $30 per month higher. First of all, this is a leading question because not everyone’s internet bill would go up by $30 in the absence of the ACP subsidy. Before ACP, internet-service providers marketed plans as low as $10 per month to low-income customers. Most of those plans still exist. If someone was receiving the full subsidy for a $30 per month plan, and effectively paying $0 per month for internet, changing to a $10 per month plan after losing the subsidy would mean their internet bill only went up $10, in terms of their household budgeting.
But even with the leading question, 47.6 percent of respondents said they would switch to a lower-cost internet plan, and 29.3 percent said they would drop the service they are using ACP benefits to pay for. The FCC sums those to get 77 percent experiencing a “disruption” of service. Which is true, but misleading given that switching to a lower-cost plan is not a bad thing, and it would mean people would still have internet access.
Highlight 2: About half of survey respondents (47%) reported having either no internet service or relying solely on mobile internet service prior to receiving their ACP benefit. The same is true for rural respondents (53%).
This ignores how the ACP has actually been used by recipients. Over half of ACP recipients use their subsidy for mobile internet service, not fixed broadband. Yet the FCC considers people with only mobile internet service in the same bucket as people with no service at all.
The survey actually shows that the largest group of recipients, 30.2 percent, had both fixed and mobile internet service before the ACP. One-quarter had mobile internet service only, and 22.7 percent had fixed internet service only. Only 21.8 percent said they had no internet service.
The fact that more ACP recipients use their subsidy for mobile internet than for fixed internet should send a message to the FCC and to the Biden administration that actual internet users don’t think mobile service is all that bad. Biden administration broadband spending has prioritized fixed service over mobile service, and that bias comes through in the way the FCC is reporting the results of its survey.
It also makes clear that many recipients are using the program to add a second internet service to one that they already have. They aren’t going from being unconnected to being online, and therefore aren’t “closing the digital divide,” to use the Washington buzzword.
Highlight 3: Over two-thirds of survey respondents (68%) reported they had inconsistent internet service or no internet service at all prior to ACP. The majority of this group cited affordability as the reason for having inconsistent or no service (80%).
The survey asked recipients whether there were any months in which they could not afford internet in the year before they started receiving ACP benefits. About a third said they have always had internet. The rest said there were at least some months when, for some reason, they did not have it, which is how the FCC gets the 68 percent number.
Fair enough. But it’s worth noting that only 21.7 percent of respondents said they never had internet service because they could not afford it. That mirrors the 21.8 percent who said they had no internet service prior to the ACP. So of the current recipients of subsidies that are supposed to be about affordable internet connectivity, two questions in the survey show that about four-fifths already had internet before the program began and about four-fifths did not say they didn’t have internet because they couldn’t afford it.
The Biden administration wants to expand eligibility to include households with higher incomes, which means future recipients would be even less likely to face affordability constraints for internet bills than current recipients. That’s just expansion of government for its own sake.
Highlight 4: ACP subscribers reported that they use their ACP internet service to: schedule or attend healthcare appointments (72%), apply for jobs or complete work (48%), do schoolwork (75% for ACP subscribers 18-24 years old).
Here’s the wording of the question that generated these results:
I use my ACP internet service to (select all that apply):
What about binge-watching Netflix? Playing video games? Gambling? If the survey asked for online activities with more negative connotations, it could just as easily portray recipients in a negative light. This question simply doesn’t tell us very much about how people are using the internet they receive through ACP.
Why Congress Should Ignore the Spin and Keep the ACP Unfunded
The ACP is a classic case of a temporary government program transforming into an entrenched part of the welfare state. The ACP was initially created in response to an emergency that did not exist, namely that millions of people would lose internet access during Covid. The FCC, under then-chairman Ajit Pai, had already pursued various regulatory actions in 2020 to ensure there would be no mass service losses for internet customers, and they worked. The Emergency Broadband Benefit Program, as the ACP was initially known, only began providing subsidies in May 2021, well after the worst of pandemic-induced unemployment was over, not to mention that people who lost their jobs were already receiving expanded unemployment benefits from the federal government.
The program was nonetheless rebranded as the ACP and included in the bipartisan infrastructure law. What began as pandemic response had become infrastructure (a category that Democrats at the time believed included everything). The program has since ballooned to include over 20 million households.
Now, what had become infrastructure is becoming a necessity for being alive. Senator J. D. Vance (R., Ohio), one of the legislators pushing for more ACP funding, said of internet connectivity, “I think it’s one of those things like food, like medicine, where we’ve got to make sure everybody has access to it.” Senate Democrats in a letter from October said, “Without an extension, nearly 21 million families already enrolled in the ACP will lose access to affordable broadband services that are critical to their everyday lives.” All of this for a program that did not exist three years ago.
Like many pandemic-era programs, the ACP has its fair share of fraud. The FCC inspector general found in November 2021 that dozens of schools across the country had more households enrolled in the program, through eligibility for free or reduced lunch, than there were students in the schools. It recommended that ACP applicants be required to provide the last four digits of their Social Security numbers to prevent fraud. The FCC ignored that advice.
The biggest beneficiary of the ACP is arguably the internet-service providers, who get less price-sensitive customers and a steady revenue stream from the federal government. Major telecoms have made statements, quoted by the White House in its advocacy, supporting the program’s extension. They capture large portions of the subsidy by encouraging low-income customers to enroll in the ACP and purchase $30 per month plans, which they then market as “free.”
When they’re talking to investors instead of politicians, internet-service providers said they don’t expect to lose many subscribers if the ACP ends. They also said they expect to be able to gain new subscribers from competitors if the program goes away. In other words, millions of people won’t be cut off from internet service, and the sector will become more competitive without the ACP.
The Republican Study Committee budget already supports ending ACP funding. Congress has a rare chance to end a bad program before it becomes an entrenched part of the welfare state. It should ignore bogus studies claiming massive economic benefits and ignore this spin from the FCC. The U.S. doesn’t need web welfare.