ISPs to Wall Street: ACP Funding Loss Not a Big Worry

Some ISPs tell Wall Street they aren't expecting notable subscriber losses should funding run out for the Affordable Connectivity Program. They expect to keep subs -- though at perhaps lower speed tiers and cheaper service offerings. Advocates say ACP helps make connectivity affordable for current subscribers and ensures accessibility items that the broadband equity, affordability and deployment (BEAD) program addresses translate into adoption.

With 35,000 of its million-plus subscribers receiving ACP, Cable One's exposure to the program is "teeny tiny," CEO Julia Laulis told analysts in an earnings call earlier this month. She said they generally were Cable One subscribers prior to ACP but used the program's funding to supplement service costs. Even if ACP ends, she said, "our number of customers [lost] is minimal. And I think they'll still be customers. Maybe they'll downgrade, but I think they'll still be customers." Similarly, Charter Communications CEO Chris Winfrey indicated he expected its ACP subs at worst would move to cheaper tiers (see 2310270038).

ACP "has been helpful for us" in reducing bad debt, though its impact is "relatively small," benefiting several thousand Liberty Broadband subscribers, Ronald Duncan, CEO of its GCI Liberty, said in a Liberty Broadband earnings call earlier this month. Added Liberty Media President-CEO Greg Maffei, "Clearly, there's a lot of popularity in this program in Washington ... but there also is obviously a lot of dysfunction of what will get funded and what time frame in Washington. So hard to guess how that plays out."

ACA Connects President Grant Spellmeyer told us roughly three quarters of its members are part of the ACP program, and while its members' operations don't rely on it, they have concerns about funding.

ISPs “are absolutely paying attention [to ACP funding issues] and they are concerned,” Kathryn de Wit, director of Pew Charitable Trust’s broadband access initiative, told us. ACP coffers running dry could have an immediate impact on its 21 million beneficiaries, but it also could have a chilling effect on providers' willingness to bid on BEAD projects, de Witt added. She said providers also are concerned about ACP going away because it provided a universal definition of an affordable connectivity program they had to project, instead of being subject to different criteria in various states. She said good data is lacking on ACP's impact on low-income households' adoption of internet, but its 21 million program recipients show the cost support is in demand.

National Digital Inclusion Alliance Executive Director Angela Siefer emailed that its affiliates have indicated that if ACP funding ends, "participants may need to downgrade their broadband service (when possible) or cut other costs in their budget, or go without internet service." Siefer added, "We hear disturbing stories of ACP subscribers considering which medication they will stop taking in order to continue having internet." A lack of ACP support might drive some beneficiaries to rely on Wi-Fi, which in some cases can be miles from home, she said. "Internet access and use is essential to surviving today but, as a country, we must think bigger and consider how it is essential to individuals thriving and our country's ability to compete globally," she said.