FCC prepares $75 monthly broadband subsidies for “high-cost” areas

Illustration of US paper currency and binary data to represent Internet connectivity.

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The Federal Communications Commission is paving the way for $75 monthly subsidies to make broadband service more affordable for low-income households in certain “high-cost” areas.

The $75 subsidy will be part of the Affordable Connectivity Program (ACP) that generally offers $30 monthly discounts to people with low incomes. The ACP was created by Congress in late 2021 and implemented by the FCC to replace a previous pandemic-related subsidy program.

The ACP already provides $75 monthly subsidies for homes on tribal lands, but not in other areas. The US law that created the ACP lets the FCC make $75 subsidies available in areas where the costs of building broadband networks are higher than average.

That’s what the FCC did in its action announced yesterday. “The Infrastructure Act specified that the $75 monthly benefit would support providers that can demonstrate that the standard $30 monthly benefit would cause them to experience ‘particularized economic hardship’ such that they would be unable to maintain part or all of their broadband network in a high-cost area,” the FCC said.

ACP subsidies are distributed to Internet service providers that enroll in the program and give customers discounts. Comcast, Charter Spectrum, AT&T, Verizon, and other ISPs last year agreed to make $30 plans with download speeds of at least 100Mbps available to eligible low-income households, essentially making the Internet service free when the $30 subsidy is applied.

19.8 million households so far

ISPs that accept ACP subsidies must let customers use them on any plan—a provision designed to prevent the kind of upselling that took place under the pandemic subsidy program. That doesn’t mean getting the subsidy is easy, as some people with low incomes have been wrongly rejected by ISPs such as Comcast.

FCC Chairwoman Jessica Rosenworcel said yesterday that over 19.8 million low-income households are getting ACP discounts, including 2.8 million households in rural counties. Rural low-income households are signing up at a higher rate than urban ones, she said.

The FCC is hoping that $75 subsidies will expand the program’s reach to more rural and/or low-income areas. The law defines high-cost areas as those “in which the cost of building out broadband service is higher, as compared with the average cost of building out broadband service in unserved areas in the United States.”