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ISPs to FCC: Don't Mandate Subsidies on Grandfathered Broadband Plans

FCC Building
(Image credit: FCC)

ISPs are telling the FCC not to require ISPS to allow broadband subsidy recipients to apply those subsidies to grandfathered plans, arguing that it would be burdensome and confusing, though they also said they should be free to apply the subsidies to select grandfathered plans.

The ISPs argue that requiring that the subsidy be applied to older plans being phased out could prove problematic in terms of billing and conflicts with the statute's language about plans that are "generally available."

The FCC sought input on how to transition Congress' COVID-19-realated Emergency Broadband Benefit (EBB) subsidy program to the new, $14 billion, Affordable Connectivity Program (ACP) subsidy in the infrastructure bill, including on how to interpret the Congressional mandate that the subsidy be applied to “any internet service offering” and whether that extended to “legacy or grandfathered" plans.

Those grandfathered plans are ones no longer offered to new customers but maintained for legacy customers until the plans are phased out. Those could include plans inherited by a company when it bought another ISP.

NCTA-the Internet & Television Association told the FCC that a mandate to apply the subsidies to grandfathered plans would avoid confusion and insure the program could actually be administered.

It said the FCC should clarify that the "any internet service offering" to which the subsidies apply means "offerings that are generally available to new customers" but not necessarily to grandfathered plans.

"In implementing this provision, the Commission should confirm that the requirement applies only to service offerings that are generally available in the marketplace, not legacy plans," NCTA said. "The Commission, however, should not prohibit providers from choosing to allow consumers to apply their ACP benefit to legacy plans."

AT&T also opposes including grandfathered plans in the mandate.

"Participating providers should not be required to apply the ACP benefit to grandfathered plans. By definition, grandfathered plans are not generally available and actively sold. Grandfathered plans are older plans that are no longer available to new customers, but those customers already on the plan can remain. The number of customers on grandfathered plans usually decline until there are none remaining, and the provider discontinues the plan."

AT&T said it has hundreds of such plans and that the system upgrades necessary to enable the benefit to be applied to those "antiquated" systems would be burdensome and outweigh the benefit to that "declining" group of consumers.

Those upgrades would include "extensive technology development work done on older billing systems," it argues. To mandate the subsidies be applied to grandfathered systems would thus discourage provider participation. Like NCTA, AT&T says better to give ISPs the flexibility to apply it when it makes sense, on "the most relevant, select grandfathered plans for which system changes can be more easily accommodated." ■

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.