BROADBAND AFFORDABILITY BENEFIT
We are at a critical moment in the effort to close America’s digital divide. The broadband affordability gap remains one of the primary inhibitors of access to economic security and opportunity in our nation today. Closing it is a national priority, but 16.3 million households will remain offline because they cannot afford current internet options or the new networks BEAD will provide.
We urge Congress to create a new permanent broadband affordability benefit focused on unconnected households and funded by repurposing Universal Service Fund (USF) High Cost Program funds as they expire.
GUIDING PRINCIPLEs
The new permanent broadband affordability benefit should focus on households who truly need it, and only apply to $30 entry-level ($75 for households on Tribal lands or in high cost rural areas) home broadband plans that enable families to connect to the digital economy, education, healthcare, information, and critical government services.
16.3 million U.S. households make up the broadband affordability gap and are offline because they cannot afford an available internet connection. A further 3 million households risk being disconnected by their Internet Service Providers (ISPs) as they cannot afford their monthly bills. Prioritizing those households who would be offline without a federal affordability benefit provides a pathway to connectivity for under-resourced families and ensures households can afford the new networks built by BEAD.
High Cost is the largest of the four USF programs, with an annual budget of $4.6 billion. A new broadband affordability benefit can be revenue-neutral, with 100% of the program’s cost covered by repurposing USF High Cost Program funds as they expire. Funding a broadband affordability benefit with the USF leverages an existing funding source without additional appropriations and is only possible because BEAD funding will significantly reduce the number of unserved locations previously requiring funding from the High Cost Program.
The benefit should be reserved explicitly for $30 ($75 for households on Tribal lands or in High Cost rural areas) home broadband plans that meet the FCC’s 100/20 Mbps broadband definition. Major ISPs have already created plans at this price point that meet most household technology needs, and an expanded definition of high cost supports the participation of small and mid-size ISPs that serve more rural areas. Limiting how the benefit can be applied harnesses market forces by acknowledging that households already subscribed to advanced broadband plans with higher speeds and additional features can afford to maintain their current subscriptions and are unlikely to downgrade.
Awareness, trust, and enrollment barriers prevent unconnected households from enrolling in broadband adoption programs. An all-inclusive, end-to-end platform that enables applicants to fully enroll in both the benefit and an internet service plan without navigating to other sites will remove barriers to participation and help increase the program’s adoption.
Unconnected households are the last greenfield market for ISPs, representing a $5.5 billion annual market opportunity. By replicating existing lead-generation practices, ISPs will pay a $100 referral fee for every new customer acquired, creating a self-sustaining fund of up to $40 million annually to pay for campaigns that drive awareness of the program and provide enrollment support to unconnected households and hard-to-reach populations.
ELIGIBILITY RECOMMENDATIONS
Focusing on 16.3 million unconnected households and 3 million likely to be disconnected, ensures the new benefit program provides a household with its first high-speed connection or prevents disconnection when financial circumstances change. Changing eligibility criteria to focus on unconnected households provides annual savings of $4.6 billion compared with the Affordable Connectivity Program (ACP).
$30/$75 monthly subsidy only applicable to plans at or below the subsidy price point
No device credit
FCC minimum standard speed of 100/20 Mbps
Lifeline will cover Mobile service
Households at or below 200% of the Federal Poverty Line
Enrollment in SNAP, Medicaid, WIC, SSI, VA benefits, Free /Reduced Price School Meals, Pell Grants, Government Housing Assistance programs & Tribal Benefits
No eligibility through CEP
A REVENUE-NEUTRAL MODEL
Congress should immediately instruct the FCC to create a new permanent broadband affordability benefit within the USF, funded by repurposing funds from USF High Cost Programs as they expire. This approach is revenue-neutral, meaning it does not raise the USF ceiling, but provides sufficient funding to cover 100% of the cost of a new affordability benefit while enabling all High Cost Programs to deliver on their existing commitments.
A permanent broadband affordability benefit can be fully funded without additional taxpayer burden by repurposing funds from USF High Cost Programs when they are due to expire.
““The $42.5 billion BEAD program is on the verge of ensuring every U.S. household can access 100/20 Mbps broadband. For the first time in our nation’s history, we have the opportunity to close the digital divide. A new permanent broadband affordability benefit focused on unconnected households and funded by savings from the Universal Service Fund should be a priority for the new Congress.”
LESSONS IN ADOPTION
Awareness, trust, and enrollment barriers prevent unconnected households from enrolling in broadband adoption programs. An all-inclusive, end-to-end platform would enable applicants to fully enroll in the benefit and an internet service plan without navigating to other sites. We also recommend replicating existing lead-generation practices, using the referral fees Internet Service Providers pay for every new customer acquired to create a self-sustaining outreach and awareness fund.
TAKE ACTION
We are at a critical moment in closing our nation’s digital divide by addressing barriers that prevent Americans from connecting to home broadband. The recommendations outlined in our report can make funding for a new broadband affordability benefit available from January 2025. Join us by urging Congress to create a permanent broadband affordability program to ensure that no household is left offline.
