You can be excused for losing track of the many new federal spending programs (and their accompanying acronyms) that were summoned into existence by the Biden administration and a compliant Congress in 2021’s $1.2 trillion Infrastructure Investment and Jobs Act. You can have a lot of Big Government fun with a trillion or so dollars.
Most conservatives had little enthusiasm for the infrastructure bill, and even less in the ensuing years. Inflation quickly rose to above 9 percent 10 months after the infrastructure bill became law. Besides, most conservatives never really bought into the argument that the U.S. suffered from “crumbling infrastructure” that required huge taxpayer subsidies to remedy.
Communications networks are obviously infrastructure, so it was no surprise that $65 billion of the $1.2 trillion created several new programs designed to increase availability and access to broadband networks.
It’s hard for fiscal conservatives to justify $65 billion in taxpayer dollars to subsidize more broadband, especially since somewhere around 94 percent of Americans already have access to broadband through private sector providers. And, for the most part, we don’t.
But access to a physical broadband connection is different than adoption—actually subscribing to a broadband service. So as broadband networks became nearly ubiquitous, the “digital divide” discussion morphed from access to adoption. And there are a lot of American households who could connect to broadband but do not for various reasons.
Depending on whose numbers you use, something around 40 percent of low-income households do not subscribe to broadband services or have a computer in the home. And while this may seem like a matter of individual choice, the pandemic made it clear that access to broadband is a social good—not only because of the need for access to remote education, but also to telemedicine and other critical services.
So with $14.2 billion of the infrastructure bill, Congress created the Affordable Connectivity Program (ACP) to help subsidize broadband adoption by low-income households. To date, around 23 million households have gained household broadband because of the ACP.
One virtue of the ACP program is that it didn’t require the creation of a new bureaucracy or the hiring of a large number of new federal workers. The benefit goes directly to needy households. It’s also stingier than the pandemic-era program that it was designed to replace. All-in-all, as federal programs go, targeted and efficient.
But ACP funding is projected to run out in April, and this week the FCC began phasing down the program. The likelihood is that most of the 23 million households assisted by the ACP will once again lose broadband service.
With $6-7 billion, Congress could extend the ACP for another year, and there are various proposals to do so, but so far, none of them have made much progress.
IPI will be on-guard against wasteful state and federal spending on duplicative new taxpayer subsidized broadband projects that compete against existing private sector providers. Much of the infrastructure spending was unnecessary, much will be poorly allocated, and some will actually be counterproductive.
But the ACP program, by comparison, is an efficient and targeted program that accomplishes its intended purpose.
If Congress were of a mind to scrap all non-essential spending to set our fiscal house in order, we’d be ecstatic about that. But short of such conviction, it seems unwise to allow the ACP program to expire through congressional neglect.