New GOP Criticisms of ACP Signal Trouble for 2024 Stopgap Funding

Lead Republican lawmakers’ recent charge that the FCC was “deeply misleading” about the affordable connectivity program’s efficacy (see 2312150068) has solidified perceptions on and off Capitol Hill that it will be extremely difficult to reach a deal allocating additional money before the initiative's funding runs out next year, lobbyists and observers told us. Estimates peg ACP as likely to exhaust its initial $14.2 billion tranche from the 2021 Infrastructure Investment and Jobs Act during the first half of 2024 (see 2309210060). The White House is pushing for Congress to appropriate an additional $6 billion to fully fund the program through the end of 2024 (see 2310250075).

There’s a “direct correlation” between Republicans’ concerns about the accuracy of FCC-provided ACP data and their skepticism about giving the program more money, Senate Communications Subcommittee ranking member John Thune, R-S.D., told us Monday. He was one of four GOP leaders who raised the ACP accuracy issue last week in a letter to FCC Chairwoman Jessica Rosenworcel. The others were Senate Commerce Committee ranking member Ted Cruz (Texas), House Commerce Committee Chair Cathy McMorris Rodgers (Wash.) and House Communications Subcommittee Chairman Bob Latta (Ohio). If the FCC “can’t prove to us that all these things that are being claimed in terms of how the money is being spent, then I don’t know how you can make a case for why we ought to give them more funding,” Thune said.

Latta voiced continued misgivings about promising more ACP money before there is a clear sense of the Commerce committees' direction on the program’s place within a potentially restructured USF apparatus. “I haven’t had an opportunity yet to sit down with” lawmakers in the USF working group, Latta told us last week. Thune and Senate Communications Chairman Ben Ray Lujan, D-N.M., formed the group in May to evaluate moving forward on a comprehensive USF revamp (see 2305110066), Latta told us last week. He and House Communications ranking member Doris Matsui, D-Calif., joined the working group in September (see 2309210060).

Republicans believe “we’ve got to look at what’s necessary, how much is necessary, what’s been the past experience” with the existing IIJA broadband money “and whether it’s been spent wisely,” Latta said. “For me, if dollars are already out there, you don’t want to be putting more” money into broadband without clear proof that it’s needed and that the federal government won’t mismanage it. Some lobbyists anticipate congressional Democrats will call on participating ISPs to continue the same discount for qualifying subscribers that they offered via ACP if Congress doesn’t allocate additional money before existing funding runs out.

Crisis 'Momentum'

“I have only heard support for ACP from the colleagues I’ve spoken to” on both sides of the aisle, reflecting the “strong bipartisan vote” in the Senate to pass IIJA in 2021, Lujan told us. He believes that his staff and aides to Thune, Latta and other USF working group participants “will be able to find some solutions” on USF “in one form or another.” Lujan is “optimistic" that before ACP funding runs out both the House and the Senate will act in a way that President Joe Biden can support. “I don’t want to get out in front of the work product” that the working group is putting together, he said: “The group has been at it, working in good faith,” on something “that will yield results.”

“As we get closer to” ACP’s anticipated funding exhaustion date in April, “people will begin losing access to affordable internet and that will focus everyone’s minds,” said Senate Appropriations Financial Services Subcommittee Chairman Chris Van Hollen, D-Md. “Momentum will build as crisis nears, but we’d like to avoid that point. We’d like to get started on that now, but it may only get real” for Republicans closer to the deadline.

Matsui and other Democrats pointed to strong ACP subscriber figures in rural Republican areas as reason for that party’s lawmakers to support stopgap funding. “People who represent rural areas need to understand how critical this program is” for their constituents, Matsui told us. “They’re really going to disappoint their constituents unless they can help them out here,” which could be a motivator in the runup to the 2024 election. “That’s something I’m going to be talking about a lot” in the months ahead, she added.

ACP “impacts so many different types” of House districts, “but especially ... rural” seats, said Rep. Yvette Clarke, D-N.Y., who intends to file legislation that would allocate stopgap ACP funding (see 2311300069). “It’s more expensive to build out the infrastructure” in rural areas, which in combination with lower population tends to increase subscription costs. Many rural lawmakers’ constituents “can’t afford” broadband service without ACP subsidies, she said.

'Budget Politics'

ACP’s future will be “significantly more important” as a policy matter in 2024 than the push to renew the FCC’s spectrum auction authority, which has become entangled in stalled talks on a broader legislative package (see 2312040001), said New Street’s Blair Levin. “I wish the FCC were to devote as much time talking about ACP as they appear to be talking about auction authority, but more importantly I wish they had a strategy” to convince a bipartisan majority of lawmakers to give the program more money.

“Congress needs to provide a couple more years of funding” for ACP “with the idea that there’s going to be this general rethink” of USF, added Levin, who’s also a Brookings Institution senior fellow. “I think there’s a strong political consensus that this should happen, but during a presidential election year it’s difficult to do rational things even when there’s a broad consensus that it should happen.” The Biden administration is already finding it difficult to reach a deal with Congress on aid to Israel and Ukraine “with all the attention being paid” to it, so “that suggests a certain kind of game theory about budget politics that makes getting ACP funding through more difficult,” he said.

“It will be difficult for Congress to get something done on ACP,” said Jeffrey Westling, American Action Forum director-technology and innovation policy. “There doesn’t necessarily have to be a deal tying it in with USF reform, but there does need to be one on ACP itself.” If “it has to be tied to USF reform,” as some seek, there's unlikely to be much movement in the short term “because that’s such a big lift,” he said.

An ACP-specific legislative package would likely center on “how it’s structured and who it’s targeting,” Westling added. “Right now, I can’t see Republicans blanket reauthorizing” the program as is. A lot of people are participating in ACP, and "it’s going through a lot of money because it’s a large benefit and there’s a lot of fraud and abuse of the program that can be tamped down,” he said: A deal would likely involve a “much more targeted low income” participant base, though “this is one of the more fiscally conservative benefit programs.”