Allowing a federal program that subsidizes residential broadband to lapse will have negative impacts across society in the form of reduced access to education and health care, and diminished economic outcomes, experts told a congressional committee Thursday.
“The people who rely on the Affordable Connectivity Program to connect with health-care providers, attend work or school, or access their benefits are no less deserving, anywhere across America, than anyone else,” said Sen. Ben Ray Luján, (D-New Mexico), in his opening remarks during a meeting of the Senate Subcommittee on Communications, Media and Broadband, which he chairs.
The subcommittee hearing, titled “The Future of Broadband Affordability,” took testimony from a range of experts on the need for — and shortcomings of — the Affordable Connectivity Program (ACP), the widely popular initiative that helps subsidize monthly Internet service for low-income households. The program has received no new funding, and will wind down sometime this month. Lawmakers have presented proposals for short-term funding until a more long-range solution can be found. Those proposals, however, have not yet received a vote.
The ACP, administered by the Federal Communications Commission (FCC), provides households with a discount of up to $30 per month toward Internet service, and up to $75 per month for households on qualifying tribal lands.
The testimony Thursday from experts like Kathryn de Wit, project director for the Broadband Access Initiative at The Pew Charitable Trusts; Jennifer Case Nevarez, a member of the Broadband and Digital Equity Support Team for New Mexico, and its Office of Broadband Access and Expansion; and Blair Levin, policy adviser at New Street Research, focused largely on the economic impacts of less affordable broadband subscriptions for the 23 million households who rely on the ACP.
Citing research from the Benenson Strategy Group and Comcast, de Wit said some 95 percent of ACP recipients have said, when surveyed, if the program lapses they would struggle with household costs like groceries, health care and housing.
However, lawmakers like Sen. John Thune, a Republican from South Dakota, a ranking subcommittee member, said too often inefficiencies and other problems have led to the ACP being used by families who do not need the subsidy.
The ACP, Thune said in his comments during the hearing, “does a poor job at directing support to those who truly need it, mainly those who would not get service without a subsidy.” The eligibility requirements, he added, are too broad, making more than 40 percent of U.S. households eligible.
Ted Cruz, a Republican Senator from Texas, where more than 1.7 million households are enrolled in the ACP, characterized it as a “massive welfare program.”
“Turns out, the vast majority of these people already had high-speed Internet,” Cruz said in his remarks, citing an FCC survey showing 22 percent of households receiving the ACP were previously unsubscribed to broadband, suggesting the other 78 percent of ACP participants could easily secure a monthly broadband subscription with no financial hardship.
Paul Winfree, president and CEO of the Economic Policy Innovation Center, an economic policy think tank, testified that the ACP monthly subsidies have led to increased costs for everyday consumers, as Internet service providers simply raise their rates to capture as much of the subsidy as possible.
“Deregulation and competition have reduced [broadband] prices,” Winfree told the subcommittee, arguing for a more free market approach. “We have also learned that policies that subsidize demand, such as the Affordable Connectivity Program, tend to increase prices.”
But Jon Tester, a Democratic Senator from Montana, pushed back on this theory, saying broadband is not like groceries or other consumer goods where more supply brings down prices.
“It is so damn expensive to lay broadband,” Tester remarked. “It’s just a different marketplace that somehow holds the consumer at a disadvantage.”
Much of the testimony during the more than two-hour hearing highlighted the connection between broadband access and health care, particularly for enabling telehealth.
“The end of ACP is likely to cause increased health-care costs, and worse health outcomes. Why would we want to do that?” Levin said. “Broadband is a general service technology. It enables innovations and efficiencies in multiple areas.”
