Adoption Subsidies and the Digital Divide

Although the Affordable Connectivity Program (ACP) was intended to ensure that broadband was available to low-income households, logic should also dictate that free broadband would increase broadband adoption (i.e., bring in new broadband users). Using (one-year) data on adoption from the annual American Community Survey (“ACS”) in years 2019 (before the ACP and its predecessor the Emergency Broadband Benefit Program starting in 2021, or “EBB”) and 2023, I estimate by regression the number of new broadband connections per ACP subscription. Should adoption subsidies be abandoned?  Maybe (or maybe not).  But if Congress ever decides to resurrect the ACP, then significant reform of the program seems warranted to better target those that need subsidies.