The death of the U.S. government’s Affordable Connectivity Program (ACP) is beginning to lead to disconnection of internet service for low-income Americans. On Friday, Charter Communications reported a net loss of 154,000 internet subscribers that it said was primarily due to customers canceling their subscription after losing the federal discount. About 100,000 of those subscribers were reported to be receiving the discount, which in some cases Made internet service free to the consumer.
The $30 monthly broadband discounts offered by the ACP ended in may after Congress failed to allocate more funds. The Biden administration required $6 billion to finance the ACP until December 2024, but The Republicans called The program is “a waste.”
The main complaint from Republican lawmakers was that most of the ACP money went to households that already had broadband before the subsidy was created. FCC Chairwoman Jessica Rosenworcel warned that eliminating the rebates would reduce internet access. saying An FCC survey found that 77 percent of participating households would change their plan or drop internet service altogether once the discounts expired.
Charter’s Q2 2024 Earnings Report provides some of the first evidence of users abandoning internet service after losing the discount. “Second quarter residential internet customers decreased by 154,000, largely due to the end of the FCC’s Affordable Connectivity Program subsidies in the second quarter, compared to an increase of 70,000 during the second quarter of 2023,” Charter said.
Across all ISPs, there were 23 million US households enrolled in the ACP. Research published in January 2024 Charter was found to serve more than 4 million ACP beneficiaries and that up to 300,000 of those Charter customers would be “at risk” of losing internet service if the discounts expired. Since ACP beneficiaries must meet low-income eligibility requirements, losing the discounts could put a strain on their overall finances even if they choose to continue paying for internet service.
“The real question is the customers’ ability to pay”
Charter, which offers services under the Spectrum brand, has 28.3 million residential Internet customers in 41 states. The company’s earnings report indicated that Charter made retention offers to customers who previously received an ACP subsidy. Customer loss apparently would have been greater if not for those offers.
Light Reading Reported Charter attributed about 100,000 of the 154,000 customer losses to the ACP shutdown. Charter said it had so far retained most of its ACP subscribers, but that low-income households might not be able to afford internet service without a new subsidy for much longer:
The ACP only lasted a couple of years. The FCC implemented the $30 monthly benefit in early 2022, replacing a previous $50 monthly subsidy from the Emergency Broadband Benefits Program which began enrolling users in May 2021.
On the other hand, the FCC Lifeline Program offering monthly discounts of $9.25 is in jeopardy after a sentence of the court Last week, Lifeline was funded by the Universal Service Fund, which was the subject of a constitutional challenge.
The U.S. Court of Appeals for the Fifth Circuit has determined that Universal Service fees on telephone bills are an “ill-conceived tax” that violates the Constitution. But in similar cases, the Sixth and Eleventh Circuit appeals courts have ruled that the substance is constitutional. The circuit’s split increases the chances that the Supreme Court will take up the case.
Disclosure: Advance/Newhouse Partnership, which owns 12.4 percent of Charter, is part of Advance Publications, which also owns Ars Technica and Condé Nast, WIRED’s parent company.
This story originally appeared in Art-Technica.