On January 1st, 2022, the Federal Communications Commission launched the Affordable Connectivity Program (ACP) with $14.2 billion in funding designed to help American households pay for the monthly cost of their Internet subscription. In May, we published a story about the fate of the program, based on a prediction model we built that was intended to visualize how long we might expect the $14.2 billion fund to last before needing new Congressional appropriations to sustain it. Back then, the data showed that the fund would run out some time in 2024.

We’re back today not only with a new and improved model (based both on more granular geographic data and fed by an additional 16 weeks of enrollment data), but a new dashboard that pulls together a host of information from the Universal Service Administrative Company on where and how the Affordable Connectivity Program money is being spent. 

A New Resource for Broadband Advocates, Local Policy Makers, and Elected Officials

Located at ACPdashboard.com, this new resource from ILSR includes information local broadband advocates, nonprofits, state legislators, and policy makers need to know about where enrollment efforts and expended funds stand today. It includes a breakdown by state for how enrollment numbers stand (as well as an estimate for the amount spent in each state so far), the current national eligible enrollment rate, information for 30 metropolitan areas, how much is being spent on service support versus devices, how many households are using the ACP for mobile versus wireline service, and the total left in the ACP fund. Our new prediction model shows that a little more than $410 million is leaving the bank account every month. 

On January 1st, 2022, the Federal Communications Commission launched the Affordable Connectivity Program (ACP) with $14.2 billion in funding designed to help American households pay for the monthly cost of their Internet subscription. In May, we published a story about the fate of the program, based on a prediction model we built that was intended to visualize how long we might expect the $14.2 billion fund to last before needing new Congressional appropriations to sustain it. Back then, the data showed that the fund would run out some time in 2024.

We’re back today not only with a new and improved model (based both on more granular geographic data and fed by an additional 16 weeks of enrollment data), but a new dashboard that pulls together a host of information from the Universal Service Administrative Company on where and how the Affordable Connectivity Program money is being spent. 

A New Resource for Broadband Advocates, Local Policy Makers, and Elected Officials

Located at ACPdashboard.com, this new resource from ILSR includes information local broadband advocates, nonprofits, state legislators, and policy makers need to know about where enrollment efforts and expended funds stand today. It includes a breakdown by state for how enrollment numbers stand (as well as an estimate for the amount spent in each state so far), the current national eligible enrollment rate, information for 30 metropolitan areas, how much is being spent on service support versus devices, how many households are using the ACP for mobile versus wireline service, and the total left in the ACP fund. Our new prediction model shows that a little more than $410 million is leaving the bank account every month. 

On Monday last week, the White House made much ado of an announcement that it had secured commitments from a collection of large Internet Service Providers (ISPs) to adjust speed tiers and monthly costs for their existing plans so as to be able to offer a $30/month, minimum 100 megabit per second (Mbps) download offering for low-income households across the country. The goal was to create plans for households that qualify for the $14.2 billion Affordable Connectivity Program (ACP) to get access to faster connections while ensuring no additional out-of-pocket costs. The recent White House announcement said that the 20 private-sector providers that have joined together cover 80 percent of households (skewed towards urban areas).

There’s no argument that the move will directly benefit hundreds of thousands of households by boosting their wireline connections and reducing their monthly expenses. And yet, it’s a treatment of the symptom rather than the disease, as the administration continues to refuse to address the larger structural dynamics that have made Internet access increasingly expensive in this country and perpetuated a broken marketplace via poor regulation and a lack of strong leadership.

This will become immediately apparent the moment that the Affordable Connectivity Program runs out of money, and those households suddenly face higher costs with no option for recourse. Our analysis shows that even if only a third of eligible households ultimately enroll (ten percent more households than are enrolled today), absent an additional allocation, the fund will be exhausted by the beginning of November 2024. But even under the best-case scenario, with the benefit reaching as many people as possible, current enrollment rates show that only 68 percent of eligible households will be able to sign up before the funds run out. In this model, the money will be exhausted just 18 months from now, on January 1st, 2024.

A Necessary Benefit, But There Are Enrollment Disparities

Communities across the United States got an unexpected gift from the Biden Administration last week in the form of additional flexibility to use Rescue Plan funds for needed broadband investments, particularly those focused on low-income neighborhoods in urban areas. 

When Congress developed and passed the American Rescue Plan Act, it tasked the Treasury Department with writing the rules for some key programs, including the State & Local Fiscal Recovery Funds (SLFRF). That program is distributing $350 billion to local and state governments, which can use it for a variety of purposes that include broadband infrastructure and digital inclusion efforts.

Treasury released an Interim Final Rule in May, 2021, detailing how local governments would be allowed to invest in broadband. I promptly freaked out, at the restrictions and complications that I (and others) feared would result in local governments backing away from needed broadband investments due to fears of being out of compliance with the rule. 

After we worked with numerous local leaders and the National League of Cities to explain the problems we saw in the proposed rule, Treasury released updated guidance in the form of a Q&A document to explain how local governments would be able to build and partner for needed networks. 

Given the many challenges the Biden Administration has had to deal with, we did not expect significant new changes to the Rescue Plan rules around the SLFRF. But after many months of deliberations, the Treasury Department has resolved all of the concerns that we identified as areas of concern in May. 

As we explain below, local governments have wide latitude to use SLFRF funds for a variety of needed broadband infrastructure investments, especially to resolve affordability challenges.

Summary and TL;DR

The rest of this post will cover some key points in the Final Rule with references to the text in the hopes that it will help communities better understand their options and share key passages with their advisers and attorneys. 

This past Friday Congress finally passed the bipartisan Infrastructure Investment and Jobs Act. The legislation includes $65 billion to boost high-speed Internet connectivity – “the largest (federal) investment in broadband deployment ever,” as noted by Benton Institute for Broadband & Society. This is an historic piece of legislation that includes many of the things we wanted to see in it and we believe it will significantly help solve broadband challenges for many who have not yet been well connected. 

There are two major buckets of broadband money that will be made available to states and tribal governments: $42.5 billion for the deployment of infrastructure, which will be mostly aimed at rural communities, with the rest going toward digital inclusion efforts.

While we have not yet gone through the final version with a fine-toothed comb, the broadband portion of the infrastructure bill appears to be identical to what was in the bipartisan Senate version of the bill, which we previously wrote about here.

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Rural America Biggest Beneficiary

The $42.5 billion portion of the bill will be allocated to the States in the form of block grants under the Broadband Equity, Access, and Deployment (BEAD) Program, which will be administered by the U.S. Department of Commerce's National Telecommunications and Information Administration (NTIA).

The U.S. Department of Treasury, tasked with writing the rules on how state and local governments can spend various federal relief funds made available for broadband expansion by the American Rescue Plan, recently released the guidelines [pdf] governing the Capital Projects Fund (CPF) — a $10 billion pot of money available to states, territories, and Tribal governments [pdf] to confront the need for improved Internet connectivity exposed during the pandemic.

Compared to when Treasury released rules governing the State and Local Fiscal Recovery Funds earlier this year, this go ‘round brought cheers instead of jeers from community broadband advocates, as we are seeing federal broadband policy break new ground.

The flexibility the Capital Projects Fund gives state and local governments to decide how to spend the relief funds is what broadband advocates are most excited about. CPF applicants are able to use the money in creative ways to respond to critical needs in their community laid bare by the Covid-19 pandemic, as long as the resulting project directly enables remote work, education, and health monitoring. 

Calloway County (pop. 39,000) in western Kentucky is known for the picturesque shorelines circling Kentucky Lake, the wildlife at Land Between The Lakes National Recreation Area, and as the home of Murray State University where Ja Morant dazzled basketball fans before becoming an NBA phenom.

Now there's a different team coming to town that will delight local residents: a new partnership between Calloway County and West Kentucky and Tennessee (WK&T) Telecommunications Cooperative will soon make this rural corner of the state known as a home for high-speed Internet connectivity, as the county and WK&T recently announced they were joining forces to expand the cooperative’s existing fiber network to reach every unserved and underserved location in the county.

Calloway County and WK&T are each committing a $6.2 million matching contribution for the first phase of the expansion project, which will see the co-op’s fiber-to-the-home network in the region extended 236 miles to serve an additional 4,274 homes and businesses. 

Situated in rural Central New York, Madison County (pop. 71,000) was named in honor of America’s fourth President, James Madison. But it was the region’s history of growing hops for beer that really put the county on the map. By 1859, New York state produced 80 percent of all hops grown in the U.S., thanks in no small measure to the crops in Madison County.

Today, while the community still celebrates this history at the annual HopFest, county leaders are now focused on the future and how to ensure the region does not get left in the dust by missing out on an essential economic development ingredient: high-speed Internet connectivity. In a modern economy, broadband infrastructure is indispensable in general terms and specifically for the efficient operation of precision agriculture. 

With a focus now on the digital landscape, Madison County planners have embarked on a project to bring fiber to the farm as well as thousands of other other residents and businesses across the region.

What really got things off the ground, or rather into the ground, was the county being awarded a USDA ReConnect grant last year. Madison is the only county in United States to directly receive ReConnect grant funding in FY 2020.

In July, the USDA announced it would grant $10.1 million in ReConnect funds in support of the project to deploy a fiber-to-the-premises network that will connect 2,170 people, 50 farms and 30 businesses to high-speed broadband in Madison County as part of a larger countywide project. The county will work with private Internet Service provider (ISP) Empire Access to eventually bring fiber connectivity to nearly 7,600 households in the region.

A Fertile Land For Fiber

Two years ago, Madison County officials decided to make broadband a top priority. The most underserved area of Madison is in the southern part of the county, where DSL and satellite were primarily offered, with limited addresses eligible for cable access.