On May 9, 2024, Senator Ben Ray Luján (D-NM) introduced new legislation to strengthen the Affordable Connectivity Program (ACP), complete the equipment removal of China-based telecommunications companies, Huawei and ZTE, and allow the Federal Communications Commission to auction certain spectrum licenses to create more responsive networks for consumers.

The bill would:

• Provide $6 billion to the ACP and modernizes eligibility and verification to eliminate waste, fraud, and abuse
• Provide an additional $3.08 billion to the “rip and replace program” in the Secure and Trusted Communications Act of 2019
• Require the FCC to reauction certain spectrum licenses for unassigned spectrum that the Commission has previously auctioned

ACP Funding and Modifications

The proposed legislation would appropriate an additional $6 billion for the Affordable Connectivity Program for fiscal year 2024 to remain available until fully used. 

The legislation would also require a number of changes to the Affordable Connectivity Program.

First, eligibility to participate in the program would no longer be determined by a household's participation in a broadband provider's low-income program. Every household's eligibility would have to be determined by checking the National Verifier or the National Lifeline Accountability Database (NLAD) which allows service providers to enroll Lifeline-eligible consumers in the program and manage their Lifeline subscribers.

About one-in-four ACP households have enrolled through qualifying for a broadband service provider's existing low-income program. As an example, Charter's website indicates that customers can qualify for Spectrum Internet Assist by proving that they are a recipient of one of the following programs:

• The National School Lunch Program (NSLP); free or reduced-cost lunch
• The Community Eligibility Provision (CEP) of the NSLP
• Supplemental Security Income (For Applicants 65+ Years of Age)

Second, households remain eligible to participate in ACP if at least one member is eligible for and receives free or reduced-price breakfast or lunch. However all students at Community Eligibility Provision schools would no longer automatically qualify for ACP. Individual families would have to demonstrate their free or reduced meal program eligibility.

Third, the legislation lowers the annual household income criteria from 200 percent or less of the Federal Poverty Guidelines to 135 percent. 

For households that may become ineligible for ACP due to these changes, the law allows them to remain in the program for 180 days. [So if this legislation were enacted, say May 1, all ACP subscribers as of April 30, 2024 could remain in the program at least until October 28, 2024.]

The FCC would have about six months (180 days) to update its ACP rules concerning the above changes. The FCC would have about eight months (240 days) to recertify the eligibility of all ACP households. 

Effectively immediately upon enactment, the FCC would end any subsidies for internet-connected devices through the Affordable Connectivity Program.

To remain or start to participate in ACP, a broadband service provider would have to certify that it:

• will not require an ACP household to pay an early termination fee,
• has not—since December 27, 2020—subjected ACP enrollees to a mandatory waiting period, and
• offers ACP service on generally applicable terms and conditions as applied to other customers.

The legislation also directs the FCC to develop and implement antifraud controls, performance goals, and performance measures for ACP based on recommendations from the U.S. Government Accountability Office. The FCC has 180 days to adopt these controls, goals, and measures. Within one year of enactment of the legislation, the FCC's Inspector General must submit a report to Congress analyzing these efforts to improve ACP efficiency and quality.

Rip and Replace

In the Secure and Trusted Communications Networks Act, Congress directed the FCC to establish the Secure and Trusted Communications Networks Reimbursement Program—commonly referred to as the Rip and Replace Program. This program secures U.S. communications networks by supporting the removal, replacement, and disposal of communications equipment and services produced or provided by Huawei Technologies Company or ZTE Corporation. 

As recently as May 2, 2024, FCC Chairwoman Jessica Rosenworcel told Congress that to fund all reasonable and supported cost estimates for approved applications, the Reimbursement Program would require approximately $4.98 billion, reflecting a $3.08 billion shortfall from the current appropriation of $1.9 billion. 

Because the demand for program funds exceeds the appropriation under the Secure and Trusted Communications Networks Act, the FCC is required to first allocate funding to applicants with two million or fewer customers. These applicants, known as Priority 1 applicants under the law, will receive prorated support of only 39.5 percent of reasonable costs. 

Sen. Luján's legislation would close the program's full shortfall.

Spectrum Auctions

The proposed legislation requires the FCC, within two years, to initiate systems of competitive bidding for AWS–3 bands and any other unassigned spectrum bands that the Commission previously offered licenses in competitive bidding. The FCC also has to initiate systems of competitive bidding for previously offered licenses that the Commission determines that there is sufficient current demand. 

Prospects

Late last week, Communications Daily reported that Sen. Luján had won commitments from Senate leaders to address ACP and Rip and Replace funding issues without attaching them to the Federal Aviation Administration reauthorization bill passed by the chamber. This legislation appears to be the vehicle to do that. The Senate returns to work on May 14. 

The Benton Institute for Broadband & Society is a non-profit organization dedicated to ensuring that all people in the U.S. have access to competitive, High-Performance Broadband regardless of where they live or who they are. We believe communication policy - rooted in the values of access, equity, and diversity - has the power to deliver new opportunities and strengthen communities.

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