The collapse of the U.S. government’s Affordable Connectivity Program (ACP) is starting to result in internet service disconnections for low-income Americans. Charter Communications on Friday reported a net loss of 154,000 internet subscribers, which it said was mostly due to customers canceling after losing their federal discount. About 100,000 of those subscribers reportedly received the discount, which in some cases free internet service provided to the consumer.
$30/month for ACP broadband internet access ended in May after Congress failed to appropriate more funds. Biden administration required $6 billion in ACP funding through December 2024, but Republicans called “wasteful” program.
Republican lawmakers’ main complaint was that most of the ACP money went to households that already had broadband Internet access before the subsidy was created. FCC Chairwoman Jessica Rosenworcel warned that eliminating the subsidies would limit Internet access, saying The FCC study found that 77 percent of participating households would change their plan or cancel internet access altogether once the discounts expired.
Charter Q2 2024 Earnings Report provides early evidence that users are abandoning internet services after losing the discount. “Iiternet customer numbers declined by 154,000 in the second quarter, primarily due to the end of the FCC Affordable Connectivity Program subsidy in the second quarter, compared with an increase of 70,000 in the second quarter of 2023,” Charter said.
In total, 23 million U.S. households were registered with ACP among all ISPs. Research published in January 2024. found that Charter served more than 4 million ACP customers and that up to 300,000 of those Charter customers would be “at risk” of losing their internet service if the discounts expired. Given that ACP customers must meet low-income requirements, losing the discounts could put a strain on their overall finances, even if they choose to continue paying for internet service.
“The real question is the ability of customers to pay”
Charter, which offers services under the Spectrum brand, has 28.3 million home internet customers in 41 states. The company’s earnings report says Charter made retention offers to customers who previously received the ACP subsidy. Customer attrition would apparently have been higher without those offers.
Light reading reported that Charter attributed about 100,000 of the 154,000 customer losses to the ACP closure. Charter said it has retained most of its ACP subscribers so far, but low-income households may not be able to pay for internet service without a novel subsidy for much longer:
ACP lasted only a few years. The FCC introduced a $30 monthly subsidy in early 2022, replacing the previous $50 monthly subsidy from Emergency Broadband Benefit Program which started registering users in May 2021.
Separately FCC Lifeline Programme offering monthly discounts of $9.25 is at risk after Court judgment last week. Lifeline is paid for by the Universal Service Fund, which was the subject of a constitutional challenge.
The U.S. Court of Appeals for the 5th Circuit ruled that the universal service charge on phone bills is a “misguided tax” that violates the Constitution. But in similar cases, the 6th and 11th Circuits have ruled that the fund is constitutional. The split in the districts increases the chances that the Supreme Court will take up the case.
Disclosure: Advance/Newhouse Partnership, which owns a 12.4 percent stake in Charter, is part of Advance Publications, which also owns Ars Technica and WIRED parent Condé Nast.
This story originally appeared on Ars Technica.