ACP's End Starting to Drive Down Overall Broadband Penetration: MoffettNathanson

Even in the face of slowing subscriber additions in Q1 for telcos' fiber service and fixed wireless access (FWA), cable net additions worsened, likely due to the affordable connectivity program (ACP) ending new enrollments and reenrollments for households that had received ACP support and then moved to a new address, MoffettNathanson's Craig Moffett wrote Monday. He said home broadband penetration stalled and perhaps even declined in the quarter, especially when adjusted for rural home growth subsidized under the Rural Digital Opportunity Fund and for unsubsidized edgeouts. The FWA peak "has passed," with Q1 bringing its first year-over-year decline in subscriber net adds, he said. Fiber overbuilders are challenged as capital and labor costs are higher than when numerous projects were planned, while the most attractive areas are steadily being built out, he said. The U.S. broadband industry's total net adds in Q1 were the slowest since before the COVID-19 pandemic, he said. Broadband penetration increases during the pandemic were likely due to government subsidiary programs at the state and federal level, increasing affordability and bringing in numerous households that otherwise would have found the service outside their price range, he said.