Hill Eyes Proposals for Funding ACP and Rip and Replace in FY24 Minibus

Advocates of additional federal funding for the FCC’s affordable connectivity program and Secure and Trusted Communications Networks Reimbursement Program were closely monitoring congressional negotiations Friday in hopes appropriators would reach a deal addressing both priorities as part of a second tranche of FY 2024 spending bills lawmakers want approved before midnight March 22. Rip-and-replace supporters voiced strong optimism that the next “minibus” package would include $3.08 billion to fully fund that program. ACP backers were, at least privately, growing less hopeful of a deal including their priority.

“We're getting close" but work on the FY24 package “hasn't been totally wrapped up,” said Senate Appropriations Financial Services Subcommittee Chairman Chris Van Hollen, D-Md. He and other appropriators hope they'll have a minibus package ready by weekend's end to ensure its passage before a continuing resolution extending appropriations for the FCC, FTC and other federal agencies lapses after midnight March 22. A Sunday filing is necessary for House floor votes on the minibus to happen by mid-week. A GOP leaders’ rule requires at least 72 hours between a bill’s filing and floor votes on it. That would give Senate Majority Leader Chuck Schumer, D-N.Y., enough time to hold all necessary procedural votes before the CR’s lapse if any Republicans opposed a truncated timeline.

Several ACP and rip-and-replace funding plans were still in the mix as of Friday for inclusion in the minibus, several communications sector lobbyists told us. Some lawmakers were eyeing proposals that renew the FCC's auction mandate to also authorize funds for both priorities, lobbyists said. The situation remained fluid Friday, but a clean auction reauthorization, like the five-to-seven-year one Senate Commerce Committee Chair Maria Cantwell, D-Wash., is eyeing, would give the FCC latitude to sell spectrum already in the commission’s inventory, lobbyists said. FCC Chairwoman Jessica Rosenworcel identified those bands earlier this month (see 2403070062).

Other lawmakers are floating bids that would fund rip and replace only. Lobbyists told us a group of Senate Democrats was expected to publicly declare later Friday that they want any push for the minibus to pay for rip and replace linked with ACP funding, given the FCC expects the program’s money to run out this spring. The commission earlier this month said in an update on its wind-down of ACP that it will be able to provide only “partial” reimbursements for the program in May (see 2403040077). President Joe Biden asked Congress in October to allocate ACP $6 billion for FY24 (see 2310250075).

Proposals under discussion for solely funding rip-and-replace include one offsetting the allocation by authorizing the FCC to reauction the 197 AWS-3 licenses that Dish and affiliated designated entities returned last year after the agency denied them $3.3 billion in bidding credits (see 2401240001). There's also a separate push for attaching the Defend Our Networks Act (HR-6189/S-1245), which would reallocate 3% of unspent and unobligated funding from the FY 2021 appropriations omnibus, the 2021 American Rescue Plan Act and other COVID-19 aid packages to make up the rip-and-replace program’s budget deficit (see 2304210069).

Cantwell was doubtful Thursday that spectrum proposals the Congressional Budget Office evaluated at her request, including a clean FCC mandate renewal (see 2403140066), would be ready for a minibus. “We’d have to talk to people,” including House Commerce Committee leaders and Senate Commerce ranking member Ted Cruz, R-Texas, before proceeding with any of those proposals, Cantwell told us. She pointed to a March 21 hearing on spectrum issues that will likely clarify the path forward. Senate Commerce formally announced that hearing Friday (see 2403150064), as expected.

Affordability Debate

“I don’t want to jinx things,” but “we’re continuing the work … to provide” for ACP and rip-and-replace funding in the minibus, Van Hollen told us. “We know that the revenue from” future FCC auctions “would be more than sufficient to” cover both priorities, “so I continue to push very hard to get that done.” Congress could reach a deal on including spectrum language in the package “if there was a will to make it” happen, he said.

Senate Communications Subcommittee Chairman Ben Ray Lujan, D-N.M., believes the Universal Service Fund revamp working group he’s been leading with subpanel ranking member John Thune, R-S.D., and others “helps build support for short-term funding” for ACP, as has publicity (see 2403080034) for the ACP Extension Act (HR-6929/S-3565). That measure would provide $7 billion for the program for FY24. “People across America and every state are benefiting from this program,” including in majority-GOP states like Texas, Lujan told reporters. “This is not about party ideology or politics. This is about supporting the American people and being able to connect.” He brought up the issue during a Senate Budget Committee hearing last week on Biden’s FY 2025 appropriations request, which also mentioned the ACP funding push (see 2403110056).

Cruz, Thune and House Communications Subcommittee Chairman Bob Latta, R-Ohio, remain leery about allocating ACP stopgap money absent enacting changes to the program’s rules (see 2312210074). “There have been enormous problems with waste,” in ACP that Republicans voiced in December (see 2403110056), Cruz told us. “There have been enormous problems with money being shifted to subsidize people who already had connectivity, which is not the purpose of the program.” He pointed to his recent USF principles outline (see 2403060090) and said “ongoing discussions” on revamp legislation will determine whether he backs stopgap money.

Any attempt at authorizing more money for ACP without progress on a rules revamp “would be a problem for me and a lot of other people,” Thune said. Latta hoped discussions at House Republicans’ Wednesday retreat in White Sulphur Springs, W.Va., would clarify the party’s position on including ACP money in the minibus. Republicans will likely require “a pay-for” for the stopgap money, he said: Any ACP stopgap funding proposal would “probably need agreement from everybody” on the USF working group and would need to “go through regular order.”

The minibus, and particularly a spectrum-driven proposal, “is the last, best, clearest shot for getting funding for” ACP, said Vernonburg Group Chief Policy Officer Greg Guice. “There are technically other ways we could potentially fund this program, but” they're “bad options.” Using spectrum authorization to pay for ACP “has the benefit of being consistent with the way we’ve funded other broadband policies in the past,” including FirstNet, he told us.

“There are a bunch of efforts” lawmakers are pushing for rip-and-replace funding but “we’ll see what solidifies” by the end of the weekend, said Competitive Carriers Association President Tim Donovan. “We’re past” the time when the funding gap for rip and replace started hurting participants given the FCC’s mandate to prorate reimbursements (see 2310120067) and “these carriers are already on borrowed time.” If program participants “get through the spring and Congress hasn’t allocated further funds, several of the larger participants will be forced to make the decision to rip and not replace coverage in significant portions of their service territory,” he told us.