How 23 Million Americans Are Adjusting to Life Without the Affordable Connectivity Program [CNET]

The $14.2 billion federal program helped low-income families pay for internet, but it ran out of money in May.

Phyllis Jackson loves being online. She uses the internet to look up recipes, practice for her line dance group and play YouTube videos so the house doesn’t feel lonely. Jackson, a retired administrative assistant in Monroeville, Pennsylvania, said she couldn’t imagine life without an internet connection. 

“I consider the internet like my best friend a lot of times,” she told CNET.  “It makes me feel that I’m not alone.”

Jackson got her first home internet connection through the Affordable Connectivity Program, a pandemic-era fund that provided $30 to $75 a month to help low-income households pay for internet. In May, the $14.2 billion program officially ran out of money, leaving Jackson and 23 million households like hers with internet bills that were $30 to $75 higher than the month before. 

That’s if they decided to hang on to their internet service at all: 13% of ACP subscribers, or roughly 3 million households, said that after the program ended they planned to cancel service, according to a Benton Institute survey conducted as the ACP expired. 

For as long as the internet has existed, there’s been a gap between those who have access to it — and the means to afford it — and those who don’t. The vast majority of federal broadband spending over the past two decades has gone toward expanding internet access to rural areas. Case in point: In 2021, Congress dedicated $90 billion to closing the digital divide, but only $14.2 billion went to making the internet more affordable through the ACP; the rest went to broadband infrastructure.

“We’re dedicating $42 billion towards making sure that the infrastructure exists, but we’re not devoting anything towards the affordability barrier,” Angela Siefer, executive director of the National Digital Inclusion Alliance, told CNET. “That’s very lopsided and needs to be addressed.”

Most people who used the ACP won’t cut their internet subscriptions — they’ll just feel their already-strained budgets stretched a little thinner. The four ACP users I spoke with said their internet connection is too vital to get rid of entirely, but it wasn’t easy to find that $30 elsewhere in their budgets.

Cheaper groceries, lower electricity: How ACP users are adjusting

“I’ve just had to do some juggling,” Serena Salisbury told CNET. “I’ve had to go to cheaper household items, cheaper detergents. And my electric bill — I had to back off on that and find a different way of paying my electric bill just so I could keep my internet.”

Salisbury is one of the 5 million recipients who didn’t have an internet connection before the ACP. She initially signed up during the pandemic to help ensure that the kids she was babysitting could keep up with school. Back then, the program was called the Emergency Broadband Benefit and it provided $50 monthly instead of the ACP’s $30. 

Kathleen Wain found out about the ACP through WorkMoney, a nonprofit that helps people save money on everyday expenses. Wain lives in the small town of Bryson City, just outside of Great Smoky Mountains National Park in North Carolina, and raises two grandchildren in her subsidized-rent apartment. 

She falls into two of the groups that used the ACP at the highest rates: older Americans and military families. Nearly half of all ACP subscribers were military families. 

Wain said the ACP gave her and her grandkids some breathing room, allowing them to take trips and buy things like clothes and school supplies. This is where she’ll have to find room in her budget again now that the ACP is gone.  

“We’ll have to cut back,” Wain said. “We just won’t travel as much, because gas has gotten very high. We’ll cut down some of the groceries.”

“The main ways I try to save money are between my food and my electricity,” Jackson, the retired administrative assistant from Monroeville, told CNET. “In the wintertime, it would be the heat; in the summertime, it would be the air. So I’ve tried to watch that — keep that low and cut back.”

The ACP provided stability 

One thing I heard over and over from the experts and ACP users I spoke with was how the ACP established a sense of consistency with their internet service. 

“I was thinking that it’s something I’m going to have for years,” Jackson said. “When you’re on a fixed budget and you’re constantly trying to save dollars here and there, that $30 is necessary.”

In Benton’s survey, 56% of low-income households said a monthly bill up to $75 was too expensive; the average monthly internet bill they reported was $66.53. In other words, there’s very little wiggle room for these households before internet costs become unaffordable.

“The ACP helped close the digital divide, but it also addressed this issue of subscription vulnerability,” John Horrigan, senior fellow at the Benton Institute, told CNET. “I think it’s sometimes underappreciated how the ACP has helped with maintaining connectivity among low-income households, lessening this falling off the network from time to time due to economic issues.”

By the time the Federal Communications Commission halted ACP enrollments, in February, over 23 million households had enrolled — more than half of all eligible households. The ACP accepted households at or below 200% of the federal poverty guidelines, or $60,000 for a family of four. 

The extent to which the ACP helped connect people who didn’t already have internet before is a point of debate. In December 2023, four Republican lawmakers argued in a letter to the FCC that “the vast majority of tax dollars have gone to households that already had broadband prior to the subsidy.” An FCC survey showed that 22% of people who signed up for the ACP had no internet at all before enrolling.

What we know for sure is that the number of Americans with broadband internet increased from 73% in 2019 to 80% in 2023. It’s anyone’s guess how these numbers will change once the ACP disappears. One advocacy group I spoke with said it may be months before we can properly assess the impact of the end of ACP.

Local organizations are reverting to pandemic-era strategies

The ACP was a first-of-its-kind infusion of cash from the federal government, but local advocacy groups have been on the front lines of the digital divide for years. I spoke with people from these groups and several expressed frustration at the ACP’s abrupt end. 

“It almost felt like pulling the rug out from underneath people,” said Gabe Middleton, CEO of Human-I-T, a nonprofit that supplies devices, internet access and digital-skills training to people on the wrong side of the digital divide. 

Angela Siefer, executive director of the National Digital Inclusion Alliance, told me she’s seen many local organizations, such as nonprofits, libraries and housing authorities, revert back to strategies they used during the pandemic to keep people online. Those include distributing Wi-Fi hotspots, which are typically a short-term loan and come with spotty service and stingy data caps. 

“It’s commendable, but it’s also a Band-Aid. I’m not saying we don’t appreciate Band-Aids, but it’s another example of why we need real solutions,” Siefer said. “If we start hearing again that folks are figuring out how to put Wi-Fi in parking lots, I might scream.”

Many internet service providers continued providing the $30 discount into July even though they weren’t being reimbursed through the ACP. This was a bet that Congress wouldn’t let funding lapse for more than a month. So far, they’ve lost that bet. 

Billions in lost savings

Proponents of the Affordable Connectivity Program argue that the subsidy essentially pays for itself. A recent economics working paper estimated that for every dollar spent on the ACP, the nation’s gross domestic product increases by $3.89. The Broadband Equity Access and Deployment, or BEAD, program, which funds broadband infrastructure, had about half that impact. 

Another study, from the Chamber of Progress, calculated that ACP subscribers will lose $10 billion in work opportunities, $1.4 billion in telehealth savings and $627 million in student benefits if the program doesn’t return. The Benton Institute study found that the lost economic benefits from online shopping alone amounted to $1.5 billion. 

“You’re better able to shop for good deals. You’re better able to understand what products are going to be suitable for you or not,” said Horrigan. He calculated the savings from online shopping to be about $1,300 per year for low-income households.

The impact on the nation’s health care could be even more significant. A recent analysis by Cigna found that telemedicine access lowered the cost of care by up to $141 per visit, and 72% of ACP subscribers said they used the internet to schedule or attend health care appointments. 

The end of the ACP could also jeopardize the $42 billion BEAD program as well. One analysis found that the existence of the ACP led to an estimated 25% reduction in the per-household subsidy needed to incentivize providers in rural areas. 

“We’ve heard from providers that affordability support drives investments in deployment,” said Fazlullah. “It allows them to be more ambitious, because they understand that after their initial capital expenditures, there’s going to be a subscriber base that’s consistent.”

Other low-income internet resources

Since the ACP discount stopped going out to customers, many internet providers have stepped in with their own low-income plans. These typically have income requirements similar to the ACP’s.

To help consumers navigate these discounted plans, the National Digital Inclusion Alliance created a scoring system called Grading Internet for Good, based on factors like cost, transparency and plan performance. I’ve included the NDIA ratings below, along with some basic information about each plan.

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Show more (8 items)

Could the ACP come back?

A flurry of ACP extension bills were introduced in 2024, but though the program is widely popular among voters, efforts to secure funding for an extension have fallen flat.

When I polled industry insiders about the prospects of an ACP extension, responses ranged from tepidly hopeful to flat-out bleak.

“I’m torn. I’m still hopeful,” said Siefer, the director for the National Digital Inclusion Alliance. “One reason I’m hopeful right now is that J.D. Vance is actually a really good supporter, basically, and he might have more influence than he did before.” Vance, the Republican senator from Ohio who’s now Donald Trump’s running mate, introduced one of the extension bills, a bipartisan effort, along with Democratic Sen. Peter Welch from Vermont and others.

Several ACP extension bills are currently sitting in Congress. The Senate Commerce Committee came close to attaching funding to the Spectrum and National Security Act in June, but that ultimately didn’t pan out.

“I am hoping for the best and I’m expecting the worst,” said Middleton, the CEO of Human-I-T. It’s an election year, Middleton noted, and “I understand that things are sometimes a little bit complicated in terms of what’s going to get funded.”