The Affordable Connectivity Program (ACP) began as an “emergency” Covid program and has since expanded to become a welfare program subsidizing the internet bills of 20 million households. It provides up to $30 per month for broadband internet service to eligible households. The ACP is set to run out of money within the next two months if Congress does not give it more. The Federal Communications Commission, which administers the program, stopped accepting new applications in February.
The Biden administration and a bipartisan group of lawmakers want the ACP to be expanded, but the new budget proposal from the Republican Study Committee (RSC) would allow it to expire. The RSC is chaired by Representative Kevin Hern (Okla.) and has 166 representatives as members.
The budget proposal says:
RSC supports sunsetting Biden’s ACP for the following reasons:
- Private industry captures some of the benefits while passing on higher prices to all consumers;
- 80 percent of ACP beneficiaries had high-speed internet before receiving the subsidy; and
- Sunsetting ACP would cut broadband costs, saving households money
The RSC is right on all counts. The program was created in response to a fake emergency and only began in May 2021, well after the Covid recession was over. It was then folded into the bipartisan infrastructure law as part of the “everything is infrastructure” Democratic mentality. Eligibility was expanded so that it now covers 20 million households, and the Biden administration wants to expand it even more. It has been prone to fraud: For example, the FCC inspector general uncovered a situation in Florida where a school of 200 students had 1,884 households enrolled in the program. It allows internet-service providers, many of which were offering low-income plans for less than $30 per month before the ACP, to herd more customers into $30-per-month plans, brand them “free” with ACP enrollment, and pocket the subsidy. Supporters have resorted to citing a bogus economic-impact study that claims that the program magically creates almost $4 in economic growth for every $1 it spends. And we have good reason to believe that in the absence of the ACP, competition would increase and few, if any, people would lose internet service.
Congress has a rare chance to end a destructive welfare program that’s only a few years old, and all it has to do to accomplish that goal is what it does best: absolutely nothing. Letting the ACP expire is the right thing to do, and the RSC is right to recommend it.