The demise of the Affordable Connectivity Program (ACP) will be particularly hard on smaller MVNOs
Members of the National Lifeline Association (NaLA) are trying to figure out how to keep their customers connected
A gap in funding will make it very challenging for these businesses and their customers
With the future of the Affordable Connectivity Program (ACP) looking grimmer every day, wireless operators and mobile virtual network operators (MVNOs) are preparing for its demise and weighing their alternatives.
The ACP is expected to run out of money by mid-May, leaving millions of Americans without discounted internet services. The demise of the ACP will be particularly harmful to a number of smaller MVNOs that have based their business on connecting customers to the ACP program.
ACP provides $30 discounts to qualifying households for their monthly internet service bills. For low-income households in tribal lands, the ACP provides $75 discounts to their monthly internet service bills.
The National Lifeline Association (NaLA) is a non-profit industry trade group that represents many of these ACP and Lifeline-focused MVNOs and distributors. Similar to the ACP, Lifeline is a federal program that is intended to make communications services more affordable for low-income consumers. It provides a monthly discount of $9.25 to qualifying consumers for their purchases of telephony or broadband services.
According to John Heitmann, counsel for NaLA, the association’s members are very concerned about the future of ACP and are trying to figure out how to keep their customers connected if ACP funding ends.
“If there is a gap in funding it will be very challenging for these businesses and their customers,” Heitmann said. “Some customers will be unable to pay and some businesses will be unable to offer a product that consumers can use.”
Heitmann added that some NaLA members are planning to keep their customers connected for the entire month of May even though the ACP program will only provide partial funding in May.
“Many of the companies that I work with will provide the full $30 benefit for May,” he said, adding that these MVNOs “have invested a tremendous amount into this program” and they don’t want to leave their customers without any connectivity.
Another option for consumers is to use the Lifeline program instead of ACP as a safety net. However, Lifeline provides just $9.25 per month in funding unless the consumer resides in a state like California, which provides $19 per month in Lifeline benefits.
But MVNOs aren’t the only ones concerned about the end of the ACP program. AT&T announced last week that it’s committing an additional $3 billion by 2030 to help close the digital divide and provide affordable access to broadband to lower income consumers. This brings the company’s total commitment to $5 billion since 2021.
AT&T said that it is working with customers enrolled in ACP to find additional solutions and is also offering low-income discounts for its prepaid mobile services such as Cricket and AT&T Prepaid.
Heitmann said that he believes that the wireless industry has put a lot of work into making ACP a success and wants to make it work. “This is a good example of a public-private partnership,” he added.
Temporary glitch or long-term problem
Although there is bipartisan support for an extension to the ACP and there’s proposed legislation that would add $7 billion in funding to the program, many are losing hope that the ACP will receive the funding in time to prevent a gap in the benefits.
Nevertheless, any type of funding gap is a problem for ACP recipients. Because of this, many of the ACP-focused MVNOs are advocating with the FCC to keep ACP customers enrolled in the program even if the ACP benefits end. Heitmann said that by keeping customers enrolled in the program, they won’t have to go through the verification process and prove their eligibility once funding is reinstated.