By Laura Phillips
Bowing to the reality that Congress has yet to appropriate future funding of the widely popular Affordable Connectivity Program (ACP) and current funding is projected to run out in April 2024, the FCC last week issued an Order (Wind Down Order) addressing processes for the program’s orderly wind down. Agency rules require ACP providers to give 60 days’ notice of the end of the program to affected customers. That would place a 60-day notice trigger at about late February. However, the Wind Down Order directs ACP providers to communicate the change in program status sooner, with a total of at least three communications to each ACP enrolled household beginning no later than January 25, 2024. Prior to enrolling a household, ACP providers were required to obtain affirmative consent that acknowledged that if and when funding for the ACP ends, the household would be subject to the provider’s undiscounted rates and general terms and conditions for broadband access. It may soon be time to find out just how many households will remain connected when and if the ACP funding lapses.
Timing and Content of Provider Notices. While no specific language or format is prescribed for these required notices, key pieces of information are to be included. The first notice must be sent by January 25th and must generally advise of the possibility of ACP termination and the potential impact of program termination on ACP household broadband service and bills. The second notice is tied to the FCC’s 60-day notice of the last fully funded month, which is likely to occur in late February. The third notice is to coincide with the last bill or billing cycle where the provider applies the full ACP benefit to a household’s broadband bill.
Both the second and third notices are to announce that the ACP is ending and include (1) the date of the last bill on which the full ACP benefit will be applied and (2) information that the household will at termination of the program be subject to the provider’s undiscounted rates and general terms as well as provide the amount that the household will be billed for the service once the full ACP benefit is no longer available.
These notices also must remind ACP households that they can change their service plans or terminate service at the end of ACP. The FCC encourages providers to include information in their notices about their lower cost offerings or low-income programs or a link to a website or phone number where ACP households may obtain that information. Notices are to be sent to ACP households in writing and provided in a format (e.g., email, text message, or paper mail) that is consistent with any consumer expressed preferences for receiving notification or other customer communications.
Opt-In to Continue Broadband Service. Providers must determine whether a household has affirmatively opted-in to continue receive broadband service post-ACP termination to continue serving them. This is established by referencing two data points; first, the household’s acknowledgment at the time of enrolling that it received and reviewed the required disclosures, which included a statement that the household will be subject to the provider’s undiscounted rates and general terms and conditions if ACP ends, and second, establishing the household’s “willingness and ability to pay” for broadband service.
Households are considered to have demonstrated “willingness and ability to pay” if they: (1) have informed their provider, either orally or in writing, that the provider may continue providing broadband service to the household and to charge a higher rate post-ACP; (2) were existing paying customers with their current broadband provider at the time the household enrolled in ACP; or (3) currently pay a fee for their ACP-supported broadband service. This FCC determined that these characteristics are consistent with “willingness and ability to pay” and that applying them would reduce the risk of subjecting many ACP households to service disruption. It also may avoid some of the administrative burdens on service providers and households associated with ACP termination.
Providers that cannot show they previously collected an affirmative opt-in consent prior to charging a higher post-ACP rate must take extra steps to ensure these households are notified and can express their preferences as to continuing or terminating service post-ACP. Also, in the case where ACP providers have zero-rated their ACP plans so that there is no monthly service payment due from ACP households, the Wind Down Order provides that notice and informed consent must be obtained for services to continue at the point where any fee for service is to be charged. In these cases, the FCC expressed concern of a stronger risk of potential bill shock than where a household is deemed to have shown a willingness and ability to pay for undiscounted broadband service. Thus, for this category of ACP households, an opt-in must be collected either orally or in writing. Providers may seek this opt-in at any time before increasing the household’s bill due to the end of the ACP.
Enrollment Freeze. As of February 8, 2024, ACP enrollments will be frozen, and no new ones accepted. This action will allow a more accurate projection of funding exhaustion and reduce the risk of the last fully funded month shifting earlier than current FCC projections. This freeze will require ACP providers to adjust their processes, particularly those relating to customer support and onboarding. Providers will retain the option of accepting ACP households seeking to transfer their service to a new provider, but will have no requirement to accept them during this transition phase.
Advertising, Other Notifications and Public Awareness Requirements. While the FCC has stressed that providers were to play an important role in ensuring that consumers receive notice about the ACP, the FCC recognizes that continuing to require providers to disseminate information about the ACP after the program ceases to accept new enrollments would cause consumer confusion. Effective February 8, 2024, the FCC waives these rules, and the waiver will remain in effect for the duration of the enrollment freeze.
FCC/USAC Notices. The Wind Down Order also notes that the FCC is working on changes to its websites to communicate end-of-ACP information. Its program administrator, USAC, also has been preparing updates to its materials and that will serve as an additional avenue to notify ACP households of coming changes.
Changes to the Claims Submission Timeline. The FCC directed several modifications to the existing reimbursement process to require providers to submit new claims more quickly, specifically by the 1st of the second month after the “snapshot” date. Starting with the February 1, 2024, snapshot data, ACP providers are to submit their reimbursement claims captured on the snapshot report to USAC by no later than the 1st of the second month after the snapshot date. This claims date submission will roll forward and reimbursement claims submitted after the accelerated deadline will not be processed. ACP providers were “strongly encouraged” to submit remaining outstanding claims for reimbursement or revisions prior to February 1, 2024.
Partial Reimbursement. If reimbursement claims in the final month of the ACP exceed the amount of remaining funds, reimbursements for benefits passed through to households will be paid out to providers on a reduced, pro-rata basis. For example, if based on the forecast of the depletion of funding established above, the remaining balance in the ACP Fund is sufficient to pay out 80% of each reimbursement claim submitted in the final month, the Fund will pay out 80% of each claim on a pro-rata basis. The FCC intends to direct USAC to provide notice to ACP providers of whether providers will receive partial payment and information about the projected pro-rata share of any partial payments for that month as soon as it can.
Recognizing that ACP providers want certainty as to whether there will be funding to allow for a partial month payment of benefits and understanding that otherwise there is a risk that providers may end up passing through a benefit to households for which they may not receive full reimbursement, the FCC will allow ACP providers to choose whether to forego providing ACP service and thus not receive partial payment for discounts passed through to ACP households after the last fully funded month of the program. At the time of the 60-day notice of the end of the last fully funded month of the ACP, the Bureau will provide guidance to providers that wish to receive reimbursement for discounts provided to ACP households beyond that last fully funded month concerning how to notify USAC of their intention to do so. Providers that choose to forgo receiving partial reimbursement for the final month will not be required to pass through any benefits to ACP households after the announced last fully funded month. These providers will not need to comply with voluntary withdrawal requirements in the FCC’s rules.
New Provider Applications/Approvals. It would be administratively inefficient to approve new provider applications for the ACP when new ACP household enrollments have been frozen. Thus, unless ACP is funded again, the FCC and USAC will stop reviewing new provider applications and election notices at the end of the business day on February 7, 2024, concurrent with the final day that new enrollments will be permitted. Even during the freeze, ACP providers must continue to update their contact or other participation information to USAC.
Program Integrity. The FCC’s commitment to program integrity and ongoing responsibility to address potential non-compliance will continue during the ACP wind-down phase and beyond. The Wind Down Order reminds ACP providers of their obligation to comply with USAC and FCC information or investigation requests. Providers also have document retention requirements which will extend after the end of the ACP with which they must comply.
Wind Down Will Not Be Painless. If it weren’t already obvious, the ACP program has made possible millions of new broadband connections in households where full payment of commercial provider monthly rates for broadband services would be infeasible. No rational person can predict with any certainty whether or when Congress will act on legislation introduced in both the Senate and US House of Representatives to fund ACP benefits through 2024. However, it is easy to predict that the withdrawal of ACP benefits to enrolled households will cause confusion and stymie the progress made to address digital divide issues in the US. The irony of this is that the BEAD program is now nearing the runway, ready to take off, providing states with billions to be used in broadband deployments so that new or better broadband connections are possible. Without ACP or some other subsidy program available, the fact that new physical facilities will soon reach more people won’t make a huge difference for households that cannot afford the monthly broadband service fees.
As for ACP providers, the FCC encourages providers to offer low-income internet programs as a means to keep more households connected. This is easier said than done. And both engagement and disengagement with the program are not without pain and risk. There are already a range of costs incurred by providers to apply for, plan for, implement and engage with the program. No matter how public spirited a broadband provider may be, having to take a number of steps and make quick decisions about how to disengage with the program is not simple and some of the decisions, being rushed, may not lead to optimal long-term results.
The pain of ACP termination, if it happens, will be widespread, but avoidable. Here’s one attorney who has worked in communications public policy a long time who hopes that Congress steps up and soon.
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