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Millions of Low-Income Families Set to Lose Internet Subsidies
The Affordable Connectivity Program, a $14.2 billion federal effort to
make internet service more affordable, is expected to run out of funding
this spring.
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A person adjusting a device on top of a long rod on the edge of a flat
roof, with other buildings in the city behind him.
A volunteer installing Wi-Fi at a building in Brooklyn. More than 23
million households receive effectively free or reduced-price internet
service through a federal program that may be about to end.Credit...José
A. Alvarado Jr. for The New York Times
Madeleine Ngo
By Madeleine Ngo
Reporting from Washington
March 23, 2024, 5:01 a.m. ET
Phyllis Jackson, a retired administrative assistant in Monroeville, Pa.,
signed up for home internet service for the first time in about two
decades early last year. She now regularly uses the internet to pay her
bills online, buy clothes, find new recipes and learn about her medication.
Ms. Jackson said she signed up for internet service after enrolling in a federal program that provided a monthly discount for low-income
households. That program is set to run out of funding this spring,
however, which will make it harder for Ms. Jackson and millions of other households to afford to stay connected to the internet.
“I really can’t do without it,” said Ms. Jackson, 79. “The way things are today, everyone needs to be able to use the computer.”
The $14.2 billion Affordable Connectivity Program provides low-income households up to $30 off their internet bill each month, and households
living on eligible tribal lands can receive a discount of up to $75 a
month. More than 23 million households receive either reduced bills or effectively free internet service through the program.
But federal officials began winding down the program early last month,
when they stopped accepting new applications and enrollments. The
program was tucked into the 2021 infrastructure law as a replacement for
a pandemic-era program that provided certain households discounts on
their internet bills. Although there is some bipartisan support to
continue the subsidies, lawmakers have not passed an extension.
Participants will continue receiving full benefits through April,
according to the Federal Communications Commission. In May, internet
companies will have the option to provide them with partial discounts
using the remaining federal funding. Based on provider claims data as of
Feb. 15, the program had about $2.5 billion left, which is meant to
cover the subsidies and other program expenses.
The program is part of the Biden administration’s broader initiative to connect every American to affordable, high-speed internet, which
officials hope will stimulate economic growth and widen access to health
care and education. The administration is spending an additional $42.5
billion to expand access to broadband to every corner of the country.
The administration is funneling billions of dollars into the expansion
of internet access largely because officials see it as a critical way to strengthen the economy. Across U.S. metros, prime-age workers who have
access to high-speed internet on home computers participate in the labor
force at a much higher rate than those without access, according to
research from the Federal Reserve Bank of Philadelphia. Other research
has found that internet connectivity can bolster economic growth in
rural areas, helping to create jobs and attract workers.
Some Democratic and Republican lawmakers have coalesced around a bill
that would provide $7 billion to fund the program for about another
year. Senator Peter Welch of Vermont, a Democrat who has sponsored the
bill, said that he was encouraged by the bipartisan support, but that it
was “tough to be optimistic.”
“It’s hard to get anything done in this Congress,” Mr. Welch said. “Anything on the budget becomes very contentious.”
In October, Biden administration officials sent Congress a supplemental
request for $6 billion to extend funding for the program, which they
have urged Republicans to support. “It’s past time for them to step up
for the American people so that we can continue our work to close the
digital divide across America,” Robyn Patterson, a White House
spokeswoman, said in a statement.
F.C.C. officials have said more funding is “urgently needed” to help millions of households stay connected to high-speed internet. According
to a survey the F.C.C. conducted of program recipients in December, 48
percent of respondents said they would switch to a lower-cost plan that
could be slower than their current one, and 29 percent said they would
drop service after losing the benefit.
Paloma Perez, a spokeswoman for the F.C.C., said that the end of the
program would be a “step backward” and that officials were working with lawmakers to “think about what the future of this program looks like.” Image
A lineman in the bucket of a bucket truck stringing fiber optic line on
a tall pole as other linemen walk on the ground. They are surrounded by
grass and trees along a dirt lane.
The Biden administration is funneling billions of dollars into the
expansion of internet access, in large part because officials see it as
a critical way to strengthen the economy.Credit...Mike Belleme for The
New York Times
But some Republicans have argued that the program is wasteful. In a
December letter to the F.C.C., Senator John Thune of South Dakota and
other Republican lawmakers raised concerns about the program subsidizing households that already had internet service. They have also pointed to findings from the F.C.C.’s Office of Inspector General, which has in
recent months expressed concerns about some providers failing to comply
with program rules and improperly claiming funds.
“Some people are receiving this benefit that don’t really need it,” Senator Shelley Moore Capito of West Virginia said during a recent local
news interview. “So I think we need to have accountability and make sure
that the people that are receiving this benefit are the ones that
actually cannot pay.”
According to the F.C.C. survey, 22 percent of respondents said they did
not have any internet service and 25 percent only had mobile internet
service before enrolling in the program. Thirty percent of respondents
said they had both mobile and home internet service.
Blair Levin, a nonresident senior fellow at the Brookings Institution
and an F.C.C. official during the Obama administration, said that
changes to the program would be problematic, but that lawmakers should
reach a compromise before millions of Americans are left at risk of
losing internet access.
Ms. Jackson, who enrolled in the program with assistance from a Pittsburgh-based nonprofit, said she was not sure if she could afford
internet service after the program ends. She said she would most likely
have to purchase fewer groceries and reduce her electricity use to cut expenses, but her monthly rent is also set to increase by $50 next month.
The end of the subsidy program could also complicate the Biden administration’s other $42.5 billion program to provide every American
access to broadband, said Drew Garner, the director of policy engagement
at the Benton Institute for Broadband & Society. The funds, which will
be distributed as grants to internet providers, are meant to cover much
of the cost of building broadband infrastructure.
Without the subsidy program, however, more low-income households will
struggle to afford broadband service. With fewer potential customers in low-income areas, internet providers will have less incentive to expand
service in those neighborhoods and may ask for bigger federal grants,
Mr. Garner said.
“It’s a big task to reach every unconnected household in the country,” Mr. Garner said. “That’s going to be way harder without the A.C.P. attracting infrastructure to those very hard-to-reach areas.”
Mr. Garner said the subsidy program has also helped provide households
more stable internet access. In the year before enrolling in the
program, many participants reported only having internet service during
the months they could afford it. Although some households could drop
service entirely, others might opt into slower internet plans, which
could impede their ability to complete many tasks online, Mr. Garner said. Vincent Coleman, a 26-year-old medical student in Huntington, W.Va.,
said he would probably have to downgrade his internet plan. Although the
new plan would cost about $40 a month — roughly the same amount he pays
now with the discount — he worries his internet connection would be too
slow to watch lectures or view patient records at home.
Mr. Coleman said the benefit has helped provide relief for him and his wife. “It’s a great help,” Mr. Coleman said. “Finances are always a major source of stress, and I budget very carefully.”
Madeleine Ngo covers U.S. economic policy and how it affects people
across the country. More about Madeleine Ngo

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