More than 22 million households rely on the Affordable Connectivity Plan access broadband at their home. If Congress decides not to provide additional funding, enrollments for the ACP will close on February 8, 2024, and funding for the program will run out in April of 2024.
Join the broadband community on Wednesday, January 24, for a panel with Gigi Sohn, Phil Macres, Steve Ross, Drew Clark and Scott Woods to discuss the future of the program, and what this means for the industry and the country.
Scott Woods: And we're live.
Drew Clark: Good afternoon. Welcome to the Broadband Community and a discussion: Time is Running Out For the Affordable Connectivity Program. I'm Drew Clark, joined here by...
Scott: Scott Woods.
Drew: And we have three experts to talk about the affordable connectivity program, the issue that it's facing right now and what we do about it. Please welcome Gigi Sohn, Steve Ross and Phil Macres. Who should we let go first?
Scott: I think while people are joining us just at the bottom of the hour here on the East Coast, 3:30 time here in Washington, D. C., aka the center of the universe, for those of you who are not aware, [chuckle] there's a lot of activity, a lot of... A lot going on. You should have been with us in the pre-meeting before we came on, a lively discussion.
Scott: But how about we have the participants do a brief introduction of themselves really quickly, folks are joining, and then we can jump right into how can we save ACP or if we can save ACP.
Scott: So Gigi, how about we kick it off with you.
Gigi Sohn: Sure. Hi everybody. I'm Gigi Sohn. I'm here in my capacity as the Executive Director of the American Association for Public Broadband. And also as somebody who convenes a group called The Affordable Broadband Campaign, which not only wants to see the ACP extended, but also would like to find it a permanent home in the Universal Service Fund. I don't know if we'll get to that today.
Gigi: But the ACP is a great program, but going hat in hand to Congress every year asking for seven or more billion dollars is just not... As we've seen over the last year and not really a way to make this program permanent and sustainable and something that people can rely on.
Scott: That's great. Gigi, would you mind just explaining the stakes, why is this program so vital? And obviously our audience knows a lot about this, but just underscore for us like what would happen if this is in fact cut off?
Gigi: Well, a lot of things will happen. And I will say, and I'm not overstating this chaos, will ensue. First of all, 22.8 million, so nearly 23 million households, it's about 50 million people, will lose the $30 a month subsidy.
Gigi: And for most people, that means either they will no longer have broadband, period. Or they will return to a state of what I call internet insecurity, some people call it subscription vulnerability, where some months when they can afford it, they have internet and other months when they can't, they have medical bills to pay or need to buy more food, they don't have it. So they don't have a continuous connection. And that in and of itself is extraordinarily disruptive.
Gigi: Also, to the extent that the Broadband Equity Access and Deployment Program, the BEAD Program that provides money for deployment is more attractive to ISPs considering building in rural areas. The ACP is an integral part of that. The ACP incentivizes carriers who would never dream of going to rural areas, to go into rural areas and build for the first time.
Gigi: The third thing, and I don't think people have thought about this, the FCC gave a whole bunch of grants to what we call digital navigators, people whose whole job it is to get low-income communities, low-income people, households, online.
Gigi: Well, that money will go away, they will cease to have jobs. So there will be a significant thousands of numbers of folks who will no longer have jobs once the ACP goes away.
Gigi: So a lot of bad things will happen once the ACP goes away, but first and foremost, it will be those 23 million households who will no longer have the subsidy to stay online continuously.
Scott: All right, thank you. Let's bring in Steve Ross. So Steve, you are the editor of Broadband Communities magazine, and I know you produced an editorial opinion piece just a week ago, highlighting that only large carriers were advocating Congress to extend the ACP program, but you are calling for more stakeholder engagement on this issue.
Scott: So what are we getting right and what are we getting wrong? And set the stage for our audience of who you are and what you do with Broadband magazine.
Steve Ross: Okay. Well, I'm founding editor and I've been in slow decline into retirement since 2008-2009, now I'm editor-at-large, some say just large editor. And the magazine a business magazine, not really a technology magazine, and I describe my role, and I've done the column since 19... Since 2004, when the magazine was founded. We started the column in early 2005.
Steve: My job is mainly to keep my readers, who are overwhelmingly deployers of small systems, and also owners and managers of apartment buildings, basically, property complexes, try to keep them from making mistakes that could push them into bankruptcy or get them into a lot of financial trouble.
Steve: And my big concern right now, and first of all, and we discussed this in the pre-session, the money goes not to the individuals who are getting the broadband, the money goes to the deployers.
Steve: People who aren't in the financial community have no idea how much the financial community loves that, and how much the grant givers love that. That's some security. And the more you mess that up by making it, by providing disincentives for people to keep the broadband, the more trouble you get.
Steve: The other thing is, it's not just people, it's the whole economy. We need resiliency, we need it for education, we need it for healthcare, particularly in rural areas. We need it. And we'll get back more money than we spend, we'll save more than we spend, by any stretch of the imagination.
Steve: But what's been happening, three or four months ago I thought this was pretty much a slam dunk. I thought we were gonna get it. Now, over the last couple of months, the people I've been talking to, and who've been calling me panic, because they use my financial models, which by the way, are free on the magazine site.
Steve: They've been calling me very, very nervous, and I said, "Well, have you talked to your congressperson? Have you talked to your state BEAD office?" The answer nine times out of 10 is no. [chuckle]
Steve: I says, "Do you know them? I'll send you the... I'll send you the coordinates. I'll send you the right... I'll send you the emails. I'll send you... " You know? That I don't understand. This is important, and it's more important than most people, even many deployers think.
Scott: Thank you for that. And then last and certainly not least, we have Phil Macres. Phil is a Washington, D. C. Regulatory attorney, been in the field industry for years. Phil, I want you to come on and explain to folks what you do.
Scott: And then just highlight for us because the FCC issued this wind-down order very recently that have some dates here that folks should be aware of, and I think this is what is adding to here in Washington, D. C. The craziness of ACP, is that our providers are now actively notifying their subscribers that this benefit is no longer, and have to actually roll folks off in a few months.
Scott: So why don't you come in and...
Drew: Can I just actually add something about Phil, because Phil was quite instrumental in the pushback to the letter of credit requirement, and we actually had a session here in the Broadband Community a few months back about that. I think Gigi was part of that too.
Scott: Oh yeah, she was.
Drew: And so that's a great example of a success story, right? And so now, are we looking at the opposite thing, are we looking at something that's kind of gotten out of control? Help us, alleviate our concerns, Phil if you can, but if not, tell us what we need to know to react?
Philip Macres: Oh, absolutely. And thanks initially for inviting me and being part of this panel, I appreciate it. I'm with the Klein Law Group, my firm's here in DC. I just advise clients and I help them navigate through all the various programs, whether it be the FCC, NTIA, if it's BEAD Program, USDA and its Community Connect programs.
Philip: And you know, the item of the day is ACP. And as Scott mentioned earlier, the FCC dropped this bomb shell order on January 11th, that was the wind-down order, and I was reading through it and I was like, "Holy smokes, we have until January 25th to send out notices to people... "
Scott: Tomorrow. Tomorrow.
Philip: "That we're gonna wind down." So I was just amazed by that, saying that's really, that's not much time. And look at this, we have to advise people and send these notices out, and we're gonna have to send three notices out.
Philip: So they issued this notice, they issued this order on January 11th, and by January 25th, ACP providers must... That's the ISP, they have to send their initial notice to all their ACP subscribers that previews the possible end of the ACP.
Philip: And the impact in the household broadband bills once the ACP benefit is no longer available, basically the $30 discount will no longer apply and you'll be paying your rate without the discount, the non-discounted rate.
Philip: So they issued this order and the order has a whole bunch of components to it, the timing and content of the ACP provider notices, as I indicated before, that first notice has to go out by tomorrow, January 25th to all your ACP enrolled customers.
Philip: The delivery of ACP provider notices, how you do it, subscriber opt-in, what that means, and how you do the follow on and what kind of services and how you provide them services undiscounted, you have to follow some notification requirements and obligations there.
Philip: The enrollment freeze. So the enrollment freeze is as of February 7th. That's the last day for a ACP customer to potentially enroll in ACP. By midnight of February 7th.
Philip: As of February 7th, 6 o'clock, new ACP providers, the FCC is gonna stop reviewing that, so you can no longer be an ACP provider at that point.
Philip: The FCC also talked about advertising and notification upon subscription renewal and public awareness requirements, along with the claims process, and a key aspect of that claims process is as of February 1st, when that happens, which will be the snapshot date, they call that the snapshot date, you need to get your claims in by April 1st or the first month of the second... After the second month of the snapshot date.
Philip: So for instance, the snapshot date is February 1st, you have to have your claims in by April 1st. And you can't snooze their lose, you gotta get these claims in, otherwise you may not get paid. And so the...
Scott: Let's pause right here just for a second, 'cause I wanna frame this appropriately for those who are just joining it and may not be aware. So the current ACP authorization, the funds were forecasted to last until the spring, if not early summer of this year.
Scott: There is a pending bipartisan bill that would re-authorize the ACP program in the tune of $7 billion that has yet to be acted on, but under the current program, these funds would extinguish or last into early summer.
Scott: Because there has not been a reauthorization yet, the FCC has ordered all the ISP providers in anticipation that this money is gonna run out, to start winding down their program, and in fact, as Gigi told us, notifying 23 million households that this fund, this ACP program, essentially this benefit is gonna go away.
Scott: And again, we also highlighted, and I think this is very important here in Washington, D. C., we'll talk about the political ramifications in just a second, but this is a subsidy, this is not a "entitlement" that goes to the individual or the household, this is actually paid to the provider that subsidizes or credits on a monthly service bill to the tune of $30 per qualifying, qualifying household.
Scott: So I just wanna set the stage there, because all of ramifications and the impact of what you're talking about impacts both the provider, what the provider has to affirmatively do, but it also impacts the end user, the actual enrollees in ACP.
Scott: And is that gonna hinder future, let's say best case scenario, ACP is re-authorized, is this gonna...
Drew: But all this stuff has already gone out, right?
Scott: All this stuff is going on. Does this essentially seeps confusion and distrust into a system that's already rife with such? And we'll throw that to the panel, I know Phil you wanna go through some more dates, but let's get to that discussion about the impact of all of this and the role that politics plays, quite frankly. As we all know, this is a national election year that's kicking off here in 2024.
Drew: Well, can I just also ask, how did things go so terribly wrong? What is your take and our panelists take on how things got from, "Oh yeah, Congress will do this," to this boom, January 11th kind of a statement by the chairwoman that here's the wind-down order. What are your thoughts on that?
Scott: I was with Steve, I thought, and I talked to Gigi about this when she on my podcast, Ready or Not, I'mma plug that just a little bit. But I thought, as all things Washington, D. C., it would go down to the last minute. Things don't happen until they absolutely have to happen.
Scott: But as Steve pointed out, a Steve has pointed out, there's been a shift in tone and tenor, and it's been more politicized over the last few months. I'm not surprised by it, but I am shocked that we have not reached a resolution.
Scott: And I'll open it up to the panel. In your opinion, why have we gotten to this point? Gigi?
Gigi: Look, part of it is just general congressional dysfunction, right? We now have yet another continuing resolution that is now pushing off D-Day essentially, when the budgets need to pass, when the appropriation bills need to pass 'til march.
Gigi: So part of it is just Congress is not functioning the way it should be. Okay? Part of it is, I will say this with all the love in the world to my friends who are broadband providers, they are not stepping up to the plate, they have some reticence.
Gigi: This is not partisan really. There have been some folks, some Republicans in leadership who have said, "Well, we're really concerned about this program, and is there ways for any abuse? And is it helping people who would be online anyway?" And I'd like to address that in another point. I'm hearing an echo. So if Ben, maybe you can handle that, 'cause that is really annoying.
Gigi: But this is bipartisan. This program helps red states as much as it helps blue states. The ACP Extension Act, the stand-alone bill that you mentioned, Scott, has actually more Republican co-sponsors than Democratic co-sponsors. 174 mayors across the political spectrum the letter saying, "Please reinstate."
Gigi: So this... And this is one that both as Steve said, both industry and public interest and advocates love, so you have to ask yourself why. Part of it is, I do believe that the ISPs that benefit so greatly from this are hesitant to really go full bore and lobby for this program, part of it is dysfunction.
Gigi: And part of it is just... I'm bedazzled, I'm just really, I don't understand why. This should be a no-brainer. So part of it is just a complete mystery to me.
Philip: Yeah. And this is in the wake of a lockdown on spending by Congress. They have this perspective that before they spend any money, they have to find money to cut. They've been saying that with respect to Ukraine and Israel.
Philip: And this is just unfortunately snarled up in all of this, and I wish it wasn't, because this is really gonna be harmful and hurtful to those folks that really rely on ACP and need the ACP.
Philip: And on top of that, as Gigi pointed out, these ISPs are out there and they're deciding to deploy in an area. A lot of these areas have low income folks that need that ACP and they have the justification to deploy there based on that ACP and that funding, and that justification may just go out the window.
Philip: It's also gonna impact NTIA, its programs that people that filed their Volume 2 proposals that rely heavily on the ACP and the low income offerings and things like that. It's gonna be interesting to see how this is gonna be reconciled if the ACP actually winds down.
Scott: And Steve your perspective, you said you know you have the pulse on Wall Street and from the business standpoint, what are you hearing from your subscribers and your insiders?
Steve: Well first, I point out that the problem started when Gigi didn't get the nomination.
Steve: I thought I'd make this very, very clear. That's first. Okay? But yeah, what's been happening over the last six weeks or so, usually I call around, I've got my favorite house and senate staffers.
Steve: The committee staffers in general, are a much better group to talk to than the members of Congress, either House. And they were telling me, "If your readers want this, they better start... [chuckle] Better start asking for it and agitating for it." And I says, "Well, you're talking about the advocacy groups."
Steve: They said, "Look, the advocacy groups care about the poor, they worry about the poor, they're tied into their local communities. All that's good."
Steve: "But what's really better is when the only hospital in the county or the only hospital in five counties, says, 'How the hell am I supposed to run myHealth or MyChart or Patient Gateway to all my patients? Do you have any idea what it costs for me not to have my patients have broadband?' That kind of thing."
Steve: And actually, I do because I do data quality assurance work. And it's not just the confusion of the people, it's the confusion of local officials, and it's the confusion of economic leaders, community economic leaders to do this. And they're not listening. They don't have time, maybe.
Drew: So I wanna come to the point you made, Gigi, about the providers. They really are a key beneficiary of this process. Why aren't they willing to be more active in this?
Drew: Because it's a chance for them to be the "good guys". They can like, "Hey, we're making sure we get this benefit to people." Let's just talk a little bit more about that and why they haven't been more active in pressing leaders in Congress.
Gigi: Sure. And just to respond to my friend, my friend [0:20:47.7] ____.
Gigi: I did not say that the ISPs were responsible for the dysfunction. And some of them, to their credit, actually in the notices, some of the notices have gone out already, by the way. And some of them, Charter, for example, has said, "Contact your member of Congress to make sure that this program gets extended."
Gigi: But my sense is, and again, I'm running a coalition that works on this, is that they're concerned about a couple of things. Is, it is true that the... I hate when that happens.
Gigi: It is true that some of the leaders in the Republican Party, the leaders of the Commerce Committee have soured on this program. They don't wanna give the president a win, although it would be frankly a win for them as well. And they're allegedly concerned about waste, fraud and abuse.
Gigi: So some of the ISPs don't wanna anger them, right? They may be, in the Senate they may be the chair and the ranking member of the committee next year. So they don't wanna anger their friends on the Republican side. That's number one.
Gigi: Number two, and this one kind of cracks me up a little bit, because before I was nominated, I actually helped the ISPs get a bunch of public interest groups on a letter supporting the Emergency Broadband Benefit, which was the predecessor to the ACP. But they've said, "Well, we don't want people to think that we're asking for money for ourselves." [chuckle]
Gigi: That makes me laugh because, number one, everybody knows that the money goes to them, and number two, that train left the station two and a half years ago.
Gigi: So to me, that's not a good enough rationale for a program that again, not only benefits them, incentivizes them to build in rural areas, but also helps 23 million households in the United States.
Gigi: So to me, there's just not a good enough reason to kinda be hands-off, and we really, really need them to put the full power of their lobbying operations towards getting this done.
Scott: Let me ask the panel a follow-up question to take an opposing view. Are those concerns of waste, fraud and abuse valid? We know the FCC does not do oversight very well, if at all. We know there's been issues of clawbacks, if you will, with RDOF.
Scott: Are the concerns about the efficacy and viability of this program, not withstanding the politics, are those concerns valid?
Gigi: So if I can address this as well, and then I'll turn it over to my colleagues. The ACP has been going on for a little while. There are some concerns that there are folks who are not eligible for the program, who are being offered to be eligible in the program, to get the program.
Gigi: And I would have no problem with the FCC looking at the eligibility criteria and deciding whether some of them need to be reformed or regibbed in some way. I don't have a problem with that. There's waste, fraud and abuse in every government program. Let's talk about $3000 toilets.
Gigi: I think overall, the ACP has been run well, but I don't think anybody, even the folks I work with, would mind having the FCC take a closer look at some of the eligibility criteria and see whether they're working the way they're supposed to.
Gigi: The biggest concern that I hear is that, "Well, this program is giving money to people who already have an internet connection, and it should only help people who are new subscribers."
Gigi: Well, there's nothing in the law that limits this program to new subscribers. And in fact, there's a provision in the law that says that ISPs have to tell existing subscribers of the existence of the ACP. So that there's nothing in the law that says this.
Gigi: And that's kind of like saying, "Well, you can't get the Supplemental Nutrition Assistance Program unless you've never eaten before. Unless you've never bought food before."
Gigi: Right? It's the same thing. Either you're eligible or you're not eligible.
Scott: I love this point. I wanna hear Phil and Steve as well. I just wanna call attention to Chairwoman Rosenworcel's response to this. And this is something I hadn't noted before, but she pulled out USAC, the Universal Service Administrative Company data showing that 20 to 22% of ACP participants did not have internet access prior to implementation of the program.
Scott: And so she is pushing back on this point. Maybe some people think, "Well, 20%, that's not a lot." I think it is a lot. 20% of the people didn't have internet before ACP came along. So it's not like the chairwoman and many others are not responding to these criticisms that have been made.
Gigi: And also, John Horrigan, my colleague at Benton, did a study that's showing that 49% of the households that get it are what I called before, internet insecure or subscription vulnerable. So in other words, they won't have a constant connection. Some months they'll have it, some months they won't.
Gigi: And don't we want... Aren't we lucky that we can afford a broadband connection 12 months out of the year, and shouldn't that be the country's goal? So it shouldn't matter whether you have it some months and don't have it other months, you should be able to have it constantly.
Scott: Well, Phil and Steve, I wanna ask you a question, and Phil brought this up. The broadband industry is awaiting the BEAD money to hit the street this year, some of the state broadband offices are going forward and the final machinations of their Volume 2s and Volume 1s will be approved, challenge process, etcetera, will be going forward.
Scott: Was it a mistake to tie the low-income portion, the requirement of the BEAD program from an implementation standpoint, to a program as tenuous as ACP? Or is all of this just politics? Is this all just tied up in election year politics that those of us who are familiar with Washington are used to now for over the last 20, 25, 25 years? What are your thoughts on that?
Philip: And just to kind of... I think if there was a turning point in December to the negative, it's the dysfunction in Congress and the inability to pass even basic things like...
Scott: Anything. [chuckle]
Philip: Like aid to defend Ukraine or the whole Israel question. The macro issue has kind of, I don't know, eaten up everything else, right? That's clear and clearly a part of this.
Scott: But this is one of the fundamental programs of the Biden administration, the Biden-Harris administration, correct?
Philip: Well, I think that... Yeah.
Scott: It has huge political ramifications on both sides, were it to be successful and for its failure. But I'm interested, Phil and Steve, in your perspectives on the political ramifications of this?
Philip: Happy to drop in there. Happy to drop in there. And Scott, I have two sides I wanna say. I wanna talk about what Gigi just said with respect to the issues with ACP, and then talk about NCIA, if that's okay? And how it impacts it.
Philip: So for the small size ISPs, some medium size, it's kind of a love-hate relationship, but you can't let the perfect be the enemy of the good, as you say, at the end of the day. There's a lot of administrative burdens that go along with USAC reporting. It's cumbersome. It requires a full-time person or staff to implement ACP and sign people up and continue to do the reporting and file the reimbursements. It's a lot for a small ISP.
Philip: The systems aren't intuitive, like the reporting that had to go on last year, it caused people to pull their hair out relative to the reporting. And then there's ACP subscribers, they may game the system, they're routinely transferring among providers in and out. I know one ISP that had the same subscriber transfer in and out seven times in one year.
Philip: Certain ACP providers seem to exploit the benefit, maybe offering something free, so you just sign up for ACP. And then there's the customers that just get ACP and they don't pay the remaining amount. Or they sign up for gigabit service when there's a lower priced option that's out there, but they want the gigabit service more expensive and they subsidize getting the higher speed.
Philip: So that's some of the issues, but as I said, you can't let the perfect be the enemy of the good, there's so many better stories to say, but I have to just mention that.
Philip: Now, with respect to NTIA and the Volume 2 proposals that have released, we saw with the Republican letter that came out of Congress and they said, "Hey, NTIA, you can't do indirectly what you can't do directly."
Philip: The NTIA said, "We're not regulating rates, but we're leaving it up to the states to submit this in their proposals." And Congress said, "You can't do that."
Philip: In some of these states, they set rates for low income offerings that were set at $30, so effectively you'd have a zero rate for a low-income offering. I'm not sure how NTIA is gonna address this issue, but it's something that's out there and it's gonna have to be confronted. I don't know how low income offerings are gonna be designed if the ACP goes away.
Philip: Steve, your position?
Steve: Yeah, I've started to look at the BEAD filings now. And by the way, for a lot of that stuff, it's not automatic that you can get access to them. Just to point this out.
Steve: But Louisiana says that in some places you could justify a lower tier as high as $65 a month, which is more than what I pay. [chuckle] Virginia says, "Oh no, no, we don't wanna set rates. God forbid we should regulate like government." So Virginia set no minimum or maximum. [chuckle]
Steve: And I think we're gonna see more of that as soon as the courts allow it, and sooner or later, some court will. So all of that, all of that's an issue.
Steve: But keep in mind, this was really... Going forward, this was meant to be a very loose tie to the idea of 25, $30 a month "free". And meaning the lower tier was supposed to be a lower tier no matter what, because there had to be some benefit to the broad public, not just the individual customers.
Steve: So this is an economic development bill, and this is an economic development meaning, and it's a resilience issue and all that sort of thing. So the... We all talk... I happen to believe that there is room for flexibility.
Steve: In some cases, you could lower the 200% of poverty line, the poverty line is arbitrary and not adequate anyway. Especially with a lot of kids in the family, because five kids can benefit from one good link to their school, or to their hospital or something like that, same thing with elderly.
Steve: But people aren't speaking up. Their providers, their schools, their hospitals are not speaking up. And that's what they gotta get through.
Gigi: That could be a good segue to my... To announcing what's gonna go on...
Scott: That was my point, 'cause I was gonna say we spent a lot of time talking about the issues and the challenges, but I wanna focus our remaining time on our call to action. What can we do, how can we get folks involved, how can we change the tone and tenor to ensure that this program is indeed safe?
Scott: So Gigi, I'll turn it over to you. I know you have a call to action campaign that you're announcing and we want folks to be able to participate in. So Gigi, to you.
Gigi: That's great. So tomorrow there will be what we call a day of action, and later on this evening, and I'm sure I will tweet it and put on LinkedIn, the website, dontdisconnectus, U-S, dot org, will go live. Which will have a tool where you can directly either call or email your senator and/or representative to weigh in and ask them to extend the ACP.
Gigi: And Steve mentioned it before, Senate House offices are not hearing enough from their constituents, and the time for talking and hand wringing is over and the time for action has started.
Gigi: So tomorrow is gonna be the day of action, the website will go live. Like I said, I will certainly be... I guess X-ing it. I guess we don't call it tweeting anymore. I'm posting it on LinkedIn. But again, it's...
Steve: I still call it tweeting.
Gigi: And actually, I'll type the URL. And so it's dontdisconnectus.org, and it has also just some great data, not only the 22.8 million households, but 960,000, almost a million veterans are enrolled in ACP. 4.6 million enrollees are 65 and over. And one in six households in the US are enrolled.
Gigi: So these are big numbers that this affects, this program affects, so hopefully Congress can see its way, particularly if we pressure them enough to furthering this program.
Drew: Looks like we've got a bunch of questions here, and feel free to share more from the page, we're looking at the chat stream here. Amy Maclean asking, "Is there any consequence for ISPs that don't send initial ACP notices by tomorrow?"
Drew: Great question, Amy. Who on the panelists wants to take that?
Scott: Phil, are you aware of any of any issues or any... I can't even think of the word, I'm fluttered right now. [chuckle]
Philip: Right. Well, let me say generally, I'm speaking in my individual capacity, and I don't express the views of Klein nor of my clients, and I'm not trying to provide legal advice.
Philip: But the FCC can issue forfeitures if you don't comply with its orders, so you're subjecting yourself to that. And you should be getting these notifications out. In fact, the FCC said, send as many notifications as you can, three is not the limit. So continue to update your clients.
Philip: But you're exposing yourself to violations of the FCC rules and requirements, and you could expose yourself to forfeitures.
Scott: But none were identified in the wind-down order, these were just the procedures that they ordered the providers, the participants in the program?
Philip: Well, the FCC, the FCC made clear at the end of it, you have to comply with its orders. And it's gonna do ongoing integrity obligations. Paragraph 34 of DA 24-23.
Philip: At the end of the day, it said, "You've gotta be sure you comply with this, and we wanna make sure the best interests of the end user subscribers are taken into consideration, and no one is suffering from bill shock."
Drew: We have another question here. This is from Janet Fitzgerald. She's basically saying that she has hope from the fact of being able to listen to and to people who want fiber to the home, to the premises. Any thoughts on the impact of this technology on fiber versus other options? For our panel.
Steve: I can take a crack at it. The big thing is don't confuse cellular wireless with point-to-point wireless. Point-to-point wireless is a good option in limited circumstances.
Steve: The industry in general, and certainly we on the magazine at Broadband Communities, we say, look, BEAD is the last chance to really get most of rural America wired. And that means they should be wired. In fact, it ought to be fiber.
Steve: But we have a financial model that is multi-neighborhood, and it is not uncommon for our users to come back to us and says, "Is is okay that one of the neighborhoods, which is almost impossible at any reasonable price to put fiber into, that we can use... That we use point-to-point wireless?"
Steve: And I said, "Of course that. It's the only way you're gonna get the whole network built in the first place. You might bootstrap eventually to fill in the fiber, but you do what you have to to maximize."
Steve: And the only people who are under any restriction in General Electric Co-ops insist that all their members get served the same way immediately. Which is fine, they know their customers and they know their efficiencies.
Steve: So it's always... It depends. There's gonna be about 2% of all households in the United States that are gonna be doing satellite. Clearly gonna be doing satellites, especially in northern areas of the country and in Canada. And I see nothing particularly wrong with that either. Although I understand the company now called Space Twitter, and Space X Travel...
Steve: Yeah. Don't worry about it.
Philip: This is a technologically neutral offering, ACP. It's a broadband offering. It's not tied to fiber. So just bear in mind, it doesn't preference one technology over the other, it subsidizes broadband services.
Scott: The cost of monthly broadband internet bill and service. Correct. Brett raises an interesting point. He represents... He didn't say which ISP, but he represents...
Drew: He says it's called Lariat Net, in Laramie, Wyoming. And he's obviously got a lot of questions.
Scott: He's got a lot of questions.
Drew: We'll take the best one.
Scott: I wanna just, this is one that I've heard a lot, I want the panel to talk about, but he said that his customers found it a lot of red tape and a challenge to sign up for ACP. Plus they found it was stigmatizing, it labeled them a certain way that they were uncomfortable with.
Scott: I'm curious as to, Gigi and the panel, I know we all deal a lot with our low-income areas, we want... In rural and urban areas. How do we deal with this stigmatism, if you will, of the ACP?
Scott: Even though, even though it goes to the provider to offset the cost of monthly service. There's really no way for anyone other than your service provider and the household to be aware of this.
Scott: Can you share some insight to Brett's concern and what he found with his customers?
Gigi: Yeah. I think this is where the digital navigators come in. These are people, like I said, and a lot of them have gotten grants from the FCC, who's entire job it is to de-stigmatize. Number one, make the process easier. Yes, there's more red tape than it needs.
Gigi: It would be helpful if the national verifier was complete, which it is not. And that is the database that basically you can type somebody's name in and see if they qualify, either for lifeline, which is the Universal Service Program's $9.25 subsidy that's mostly used for mobile phone, or for the ACP.
Philip: But I think that's the role of the state and local digital navigators were there to walk people through the process and de-stigmatize it for them. I don't know if that's something the FCC could do particularly well.
Philip: But giving those grants and being able to continue to give those grants, like I said, those people are gonna lose their jobs as soon as the ACP goes away, and Scott if I could just correct you, it's looking like it's gonna be, the latest that the ACP is gonna be alive is gonna be beginning of May. So we're talking about end of April. It ain't reaching the summer, unfortunately.
Philip: So the time really is running out, the sand is really running out of the hourglass right now.
Philip: And folks might be offended by having to go through the low-income national verifier process, but these are questions that have to be asked to determine if you are eligible for the discount.
Philip: So it's like you can't have one without the other. We have to ask the questions and confirm that. And then some folks may like, "Hey, I don't wanna answer those questions. I should be able to get it without going through that." So again, that just comes with it.
Drew: Another question from Jim Thompson is kind of a comment, but it's raising the issue of the digitally insecure. Many households will be prone to churn, disconnect without a subsidy.
Drew: And I'm wondering, let me go back to this issue, that I don't think any of us know for certain whether this will or won't get past, right? But it does raise this issue of designing the program that takes its place. Okay?
Drew: And whether that's a renewal, we know in fact that the renewal would really just buy time to get a new revision of the Universal Service Fund, which in some ways is kind of where this program should live, because that doesn't need to go every year before Congress.
Drew: So we haven't really talked about that here in this discussion, and I do recognize they are distinct issues, but if I were a member of Congress, I would be often asking, isn't this what we set up the Universal Service Fund to do?
Drew: What is the response that advocates of the Affordable Connectivity Program can make to that question, why don't you just fix the USF program?
Gigi: Well, I say you gotta do both. It's gonna take at least a year to 18 months to fix the Universal Service Program. Okay? So what do you do in the interim?
Gigi: And look, we know that this is the last tranche of money if we get this 6 or $7 billion. This is it. We've been told this is it. And you don't wanna go back hat in hand, but you need to have some kind of bridge funding.
Gigi: And frankly, Drew and Scott, even if we get the bridge funding, there's still, I think, gonna be a gap. Because it takes the FCC a year or 18 months, the 6, 7 billion only lasted to the end of the year.
Gigi: And I spent the fall traveling around the country and telling states, "You're gonna need to find a way to fill the gap." It's either gonna have to be up to the states or up to the ISPs themselves to fill that gap. Because there's no way...
Gigi: The fight over universal service contribution reform, so who puts money into the USF, expanding that amount. 'Cause that's the only way you're gonna be able to fold this 30/75... Remember, it's $75 for tribal lands and high costs, subsidy into the USF. You've got to expand the parties that give in.
Gigi: So that's gonna be a battle royale. It's one that the FCC is a long overdue. I will even say when I was with Chairman Wheeler, I wish we had done it then, but we didn't. But now we must.
Philip: Yeah. And it would be an evolution of the lifeline program, so we can see it evolving and developing to accommodate ACP. But again, as Gigi pointed out, we have to have USF funding. Right now that funding is coming from Congress, it's not coming from USF.
Philip: So if that's done, it's gonna take some time. And I don't know how much time, but at least the FCC has a framework and a platform upon which to develop and put the ACP into. This is the lifeline program, similar, akin to.
Steve: Yeah, I will say...
Scott: Go ahead, Steve.
Steve: Through that, a lot of the staffers that I talked to around Christmas time, the Senate staffers were around, I mean, heaven help them. And they said, "Look, the tax base for Universal Service Fund obviously is too small, so it's gotta expand." And that come around to...
Steve: And the question then is, is it really as complicated as it seems? RDOF has been borderline dysfunctional and started out with a great idea from the Jonathan Chambers and got subverted in a lot of different ways.
Steve: So FCC has the staff, has really good people on the staff, and the Senate staffers, I talked to two of them, said they'd be very willing to listen to something from FCC. Because they know where the bodies are buried.
Steve: Gigi, do you think that's true?
Gigi: They're willing to listen to the FCC about what?
Steve: Oh. Reforming it and maybe tying up. It might not be as difficult and time consuming as it seems.
Gigi: I will say that there is reticence at the highest levels of the agency towards doing contribution reform. I will say no more. Because it's going to be controversial and it's doing it right is gonna piss off a lot of people, but I don't... We're talking about what, 35%, 37% contribution factor, right?
Steve: Yeah. That's for USF, yeah.
Gigi: That's the percentage of revenues...
Drew: It's called a tax. [chuckle]
Gigi: No, no, it's a fee, it's not a tax.
Gigi: Anyway. That's the percentage of interstate revenues that these companies, this ever shrinking number of companies are paying. It's not sustainable.
Gigi: But what's interesting is the FCC doesn't seem to have any problem spending, distributing USF money. They're just proposing to give it for cybersecurity for schools. I love that idea. They did the enhanced [0:47:56.9] ____ giveaway.
Gigi: So they're spending the money, but how about bringing more money in? You can't have one without the other.
Scott: Yeah. And that's a whole another webinar and podcast that we can focus on, the USF reform and FCC reform, some of its key programs, but I do wanna just correct one thing for the record before folks come in and say we're not accurate.
Scott: Yes, the ACP is a $30 a month credit on the bill, it is $75 on tribal lands, and it's also $100 for devices for a one-time cost as well, that qualified users can have to buy a device.
Scott: So we wanna make sure we do understand that. We're talking specifically about the cost portion because that is a lot of what's driving BEAD program, the low cost affordability program requirement on BEAD, as well as the FCC order in which providers have to actually start notifying the 23 million, almost 23 million subscribers of ACP on the wind-down process.
Scott: But I wanna... Deborah Rogerio had a really good question I wanna ask the panel. She said, "ACP isn't extended, it will be a financial cliff for so many citizens when they see the $30 bill becomes $50 or $80, depending on that difference."
Scott: But your thoughts on the panel on states putting in specific consumer protection laws through the state's Attorney General's Office, perhaps a 60 to 90 day grace period, where ISPs either forgive bills or provide alternative solutions?
Scott: So I mentioned that that would be an interesting approach...
Drew: Really putting the pressure on the ISPs to do something about this.
Scott: To do something, advocate on the state level. State broadband offices now have a lot of power now with their BEAD money and their plans that they're going in.
Scott: So should we shift this responsibility to participate as a stakeholder on the states and state government? I'm interested in your, the panel's thoughts on that?
Philip: Well, I can jump out in front of this. In Maryland, they have the EBB program and it's shutting down at the end of February. And that was an express directive from the governor. So it's ended.
Philip: And so then the folks, the ISPs in Maryland had to send out a notification advising their customers that EBB is turning down their $15. So they had $15 on top of the 30, so you've got a $45 discount. The $15 is going away at the end of February.
Philip: So that's, we would wish that they would continue that program, but having the state AGs involved, the ISPs have to shoulder that cost, that cost is a cost that they confront and it doesn't come out of thin air. So they need to be reimbursed.
Philip: And a lot of these ACP customers, not a lot, there are customers out there, they get the discounts, but if they have amounts they have to pay above the discount, it's sometimes difficult getting payment from them, even for that amount.
Gigi: Well, I like this idea. And as I said before, regardless, there's gonna be a gap and the states are gonna have to step up. When the pandemic happened, I don't know if people remember, Chairman Pai basically picked up the phone and called ISPs and said, "You can't disconnect people. 'Cause they're in financial distress."
Gigi: This is something like that. We're just saying for a temporary period, you guys have to find a solution for these poor folks, and then hopefully you get that USF reform.
Gigi: It's so obvious to me that USF is the right answer. There are other ideas. Blair Levin has this great idea to do this through Medicaid. I love that idea, except that's, again, that's a state by state thing and some states will do it, some states won't, and it won't be equitable.
Gigi: USF just seems to me to be the logical place for it, and you do have already $9.25 for lifeline, so all you need to do is find another $21 for the 30 and a little bit more. And Scott, by the way, it's not just tribal, it's also high-cost areas...
Scott: High-cost. Yeah, absolutely.
Gigi: Also that's $75, yes.
Philip: Under this order, they won't even allow that high-cost program to kick in, so they shut that down.
Scott: So we only have a few more minutes here, eight, seven minutes now, but Dr. Ron Suarez asks a really good question. The source of all of this is digital redlining and discriminatory exorbitant pricing and practices.
Scott: So he says, "After the ACP runs out, how do we stop that? How do we address those practices, if we don't have a process by which low-income qualifying households can actually purchase a plan to get online? Would it be better to address digital equity through funding other networks like community-owned networks?"
Drew: Yeah, interesting question. Very good question.
Scott: That's a really a question for the panel. So going to the source of all this.
Drew: Yeah, good question for Gigi.
Scott: We know where Gigi stands on this.
Drew: No, I wanna hear. I wanna hear like, make the argument, Gigi, because this is a great idea.
Scott: Yeah, absolutely.
Gigi: Well, first of all... First of all, look, the FCC just adopted rules on digital discrimination, right? Let's see them enforce those rules. If that's the consequence of the ACP going away.
Gigi: The other thing is, obviously look, public broadband networks, which I represent in my role as executive director of AAPB, they have a very different incentive. Their incentive is to serve everybody with affordable broadband.
Gigi: Chattanooga, Tennessee, is a perfect example. During the pandemic they just provide free broadband to households that had K-12 kids. They just said, "Here it is in your home." Okay?
Gigi: And that's what public broadband is all about. And I do think when the BEAD money is spent, and we still have... We will still have parts of the country that are not being served or not being served adequately, public broadband is gonna be...
Gigi: It's already becoming extremely popular, as the Institute for Local Self-Reliance put out in a report last week, where I think it's gonna become even more popular when there are still areas that are left behind even after the BEAD money is spent.
Scott: Still 16 states, as we all know, 16 states that have some type of prohibition on public networks, municipally owned networks. In fact, I'm aware of that actually, Michigan last year actually put into law that the state broadband office couldn't use funds to build, expand or operate.
Scott: So it was really more prescriptive in terms of the state broadband office being able to fund one, not just prohibiting them, but actually using state and federal money to fund them.
Scott: So again, it does create a have and have not, those states that do allow it, versus those 16 states that don't. Which in fact someone tied to, and I wish I had the source, but those states that don't allow it are in fact the most under-connected in the country, and have the most impacted on a household by household basis. So there is some correlation there to the data.
Scott: In our few minutes Drew, I know you had a couple of questions as well.
Drew: I was gonna suggest... No, I just gonna suggest, let's maybe look forward for a moment. Let's get everyone's take on what's the best strategy. I mean, this day, what is it? Don't Disconnect Day? Or...
Scott: Don't Disconnect Us dot com.
Drew: Dontdisconnectus.org. Okay. So that's getting launched. Okay. So Gigi, do you wanna say a quick word on that? And then let's hear from Steve and Phil and close us out here.
Gigi: Here's what gives me hope. When I started working with the Hill staff to formulate the Emergency Broadband Benefit in late spring, early summer of 2020. And time went by and time went by, and I just gave up.
Gigi: And I'll never forget on December 21st, getting a phone call from staff saying, "We're gonna pass the EBB as part of the last COVID relief bill." So it can happen at the last minute, but people are really gonna have to push hard.
Drew: Keep hope for an extension.
Gigi: Keep hope alive.
Steve: All right, I'm gonna make two points. First of all, the carriers are getting smarter about redlining. I remember in the Bloomberg era, Verizon won the franchise to do most of Manhattan. They didn't do most of Manhattan, they ignored a lot of Harlem.
Steve: And then about 2014, they had a management change, and they had some subsidized broadband that they were putting in, and what they discovered was that upselling was very, very easy and people actually paid their bills.
Steve: And the reason was Harlem was almost unique in New York City as it has apartments large enough to actually raise large families, and the entertainment for the kids on the internet was much cheaper than any other form of entertainment.
Steve: The other thing is, aside from the 23 million that are served or going on and off, and so forth and so on, there's about 14 million more households in the United States that are below the poverty line. But below 200 at the poverty line. So it's 14 million.
Steve: Most of those don't have adequate broadband. And a lot of them, overwhelmingly, are in rural areas. Those are Republican districts. Get with the program, guys.
Drew: All right, Scott... Phil?
Philip: Yeah, two things. Short-term and long-term. I think in the short term, we need to get the ACP funded. As a counterbalance, maybe we have to take extra initiatives to ensure there's a crackdown on waste, fraud and abuse, whether it be the customers transferring in or out, or the ACP providers that are gaming the system, through maybe a monthly offering that has really a low gigabit band speed or amount of data that they can use. That's on the short-term.
Philip: Long-term, USF reform. Hopefully we could take lifeline and involve it to include this ACP program, as Gigi said, add $21 to it, and then you got 30. Another option is for NTIA to address it. There is a match, a 25% match.
Philip: Maybe NTIA can look at a match and say, "We're gonna include in that match some type of low income program." So that's the match which they have to do over a period of time. Maybe that would get us over the hump.
Philip: So those are just a few thoughts that can work into a short and long-term approach.
Drew: Any final thoughts, Scott?
Scott: Yeah. I was with Steve, I know we talked in the pre-production meeting, I thought all along this would go down to the last minute. I was very hopeful when the bipartisan bill was proposed that, okay. But now, I don't know. I'm probably more skeptical.
Drew: Well, I just... I mean, I know it may not be a popular opinion, but I think that whoever is out there interested in this issue needs to have some USF plans. Because that ultimately is gonna be where the long-term solution is. So maybe the long-term becomes quicker term.
Scott: I think so, and I think we also have to realize too that we're actually talking about... And I always say this even when I speak on this issue, ultimately we're talking about actual people. Right?
Scott: Here in Washington we get to talk about the policy debate and the providers and the market, and market correction and market forces. At the end of the day, I don't think we wanna live in a society where your ability to pay is based on your ZIP code, whether you have broadband access or not.
Scott: We want everyone to have access to broadband. The pandemic actually uncovered some... Exacerbated a lot of the issues that we know already existed.
Scott: But let's keep hope alive, I would say.
Scott: Let's continue to have a good fight. We will continue to share information, provide experts, provide different points of view. Again, there's no easy way. There's nuance to all of this. We welcome a healthy, robust and respectful debate.
Scott: But we do appreciate you all for joining us. Gigi, thank you. Phil, thank you. Steve, thank you for joining us. Drew, thank you so much. On behalf of broadband.money, thank you for joining us on this version of our webinar community: Is Time Running Out on the ACP Program?
Scott: So for Drew Clark, I'm Scott Woods. Thank you very much and enjoy the rest of your week. Thank you for joining us.
Drew: Thank you, everyone.
Philip: Take care.
Drew: Take care.
Steve: Take it easy, guys.
Scott: All right. Take care.