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FCC: ACP Broadband Subsidy Transition Will Be Mostly Opt-Out

Pile of money
(Image credit: Wikipedia)

The FCC will not require former beneficiaries of its COVID-19-related Emergency Broadband Benefit (EBB) program to opt-in to the new $14.2 billion Affordable Connectivity Program (ACP) that supplants it, according to the FCC's just-released draft rules for standing up ACP. But it will adopt a hybrid opt-in/opt-out approach that will result in opt-out for most categories of beneficiaries, according to the draft rules.

That means that most participants in the EBB program will be automatically enrolled in ACP.

That mostly opt-out regime is a victory for cable broadband operators and others who had pushed against an opt-in approach, meaning that EBB participants would have had to affirmatively agree to participate in the new subsidy.

Also: FCC Launches Latest Billion-Dollar Broadband Subsidy

The FCC agreed with ISPs that a universal opt-in approach would have a number of negative consequences, including that it would "likely result in significant de-enrollments due to consumer failure to opt in timely rather than a desire not to participate in the Affordable Connectivity Program, and would also frustrate the transition process, create consumer confusion, and increase administrative burdens on service providers and consumers."

The FCC had been considering requiring opt-in, but has concluded according to the draft, that "any solution needs to balance the at-times competing objectives of maintaining a subsidized broadband service to participating households, avoiding bill shock and financial harm to consumers, and consumer confusion, and fully informing participating households so they understand the broadband service options available to them."

A big issue is the broadband benefit in the subsidy for broadband service is being reduced from a $50 per month maximum under EBB to $30 per month under ACP, so there could be bill shock, and some financial harm, when some low income folks are having to pay an extra $20, but not for others if their service already costs less than $30 or for those on tribal lands, whose $75-per in EBB remains the same in ACP.

So, said the FCC draft, it is proposing a hybrid approach, tailored to the unique concerns and needs of each legacy subscriber category, with opting-out being an appropriate approach for most legacy EBB subscribers, and opting-in being one of several options for certain legacy EBB households most likely at risk of potential bill shock as a result of the reduced subsidy amount.

The FCC on January 3 officially launched the ACP, but had not yet finalized the rules so it said a modified version of the EBB rules would be in place until that time.

The ACP is part of the Biden administration's universal broadband pledge, a recognition that internet connectivity is basically table stakes for opportunities in work, education and entertainment.

Eligible households can get up to $30 per month (up to $75 on tribal lands) toward their broadband bills and a $100 discount on a laptop, desktop or tablet (but not a smartphone).

To be eligible, a household has to meet at least one of a number of criteria, including making 200% or less of the federal poverty level. For example, the poverty level for a family of four is $26,500, so any family of four making $53,000 or less would qualify for the benefit.

The FCC released the rules late last week and sought comment by January 11 since January 14 is the statutory deadline for promulgating the rules. ■