On January 21, 2021, the Federal Communications Commission (“FCC”) released a Report and Order and Further Notice of Proposed Rulemaking (“R&O” and “FNPRM” respectively) on the Affordable Connectivity Program (“ACP”). The ACP, which was adopted as a part of the Infrastructure Act, allows eligible households on non-Tribal lands to receive a $30.00 per month discount on internet services, eligible households on Tribal lands to receive a $75.00 per month discount on internet services, and all eligible households to receive a onetime $100.00 reimbursement for a connected device. The R&O adopts final rules for the ACP, building on those rules that were already established for the Emergency Broadband Benefit Program (“EBB Program”). Specifically, the R&O establishes the following requirements and processes:
- Participating Providers: As under the EBB Program, participating providers must either be either Eligible Telecommunications Carriers (“ETC”) or approved under the expedited approval process. These providers must establish that they provide broadband services to end users, either through the timely filing of an FCC Form 477 or by certifying, under penalty of perjury, that they provide retail broadband Internet access service to end-users prior to submitting their application. Providers that are currently participating in the EBB Program have been automatically transitioned to the ACP. Providers interested in participating in the ACP are required to file an election notice with USAC that contains the list of states and territories in which they wish to participate, a statement that in each state or territory they are a broadband provider, a statement that the provider is an existing ETC or a statement identifying where the provider received approval to participate in the ACP, and a statement confirming whether the provider intends to distribute connected devices. Providers that elect to participate in the ACP will be required to comply with all FCC and USAC directives, including utilizing USAC systems to administer the program, registering sales agents and enrollment representative with the Representative Accountability Database, and submitting annual certifications. Non-ETCs seeking to qualify for expedited approval must file an application describing: (1) the states or territories in which they plan to participate; (2) the service areas in which the provider has the authority, if needed, to operate in each state, but has not been designated as an ETC, and (3) a description, supported by documentation, of the established program with which the provider seeks to qualify for automatic admission to the ACP. Providers that apply seeking to use an alternative verification process, other than the National Verifier, to verify household eligibility, must demonstrate that their methods are at least as stringent as the methods used by the National Verifier.
- Household Eligibility: Each eligible household is entitled to receive reimbursement for no more than one connected device and to receive no more than one $30 (on non-Tribal lands) or $75 (on Tribal lands) monthly discount. Households are eligible to participate if at least one member of the household: (1) meets the qualifications for participation in the Lifeline program (with the modification that the qualifying household income threshold is at or below 200 percent of the Federal Poverty Guidelines for a household of that size); (2) has been approved to receive school lunch benefits under the free and reduced price lunch program under the Richard B. Russell National School Lunch Act, or the school breakfast program under section 4 of the Child Nutrition Act of 1966; (3) has received a Federal Pell Grant under section 401 of the Higher Education Act of 1965 in the current award year; (4) meets the eligibility criteria for a participating provider’s existing low-income program, subject to approval by the Commission and any other requirements deemed by the Commission to be necessary in the public interest; or (5) receives assistance through the WIC Program, established by section 17 of the Child Nutrition Act of 1996 (42 U.S.C. § 1786). Providers must enroll all participating consumers in the National Lifeline Accountability Database. Providers may verify that a household is eligible to participate using: the National Verifier, an approved service provider alternative verification process, and school-based eligibility verifications. Customers are required to utilize their service at least once every 30 days, after which the provider will notify the consumer that they will be de-enrolled if they do not cure their non-usage in 15 days.
- Covered Services and Devices: Consumers can receive a discount on broadband internet access service that is not based primarily on the data allowance of the product or sold separately from a monthly recurring service plan. For plans that are bundled with ineligible services, the benefit can only be applied toward the broadband service portion of the bundle, not the entire bundle. The discount is applied to the actual amount charged to the end user, so plans already offered with no fee to the end user are not eligible. There are no minimum service standards. Equipment necessary for the transmission of Internet service offerings that was supported through the EBB program, such as modems, routers, and hot spot devices and antennas are, are eligible for reimbursement through the ACP. The same sorts of connected devices that were covered by the EBB Program are covered by the ACP, which similarly excludes smart phones and other devices that can independently make cellular calls, including large phones or phablets. As with the EBB Program, households are entitled to receive reimbursement one connected device under the ACP.
- Reimbursement: The ACP offers a standard monthly discount of $30 for internet service offerings for non-Tribal households, as opposed to $50 under the EBB Program, and $75 for Tribal households. Providers will be reimbursed for this discount utilizing the Lifeline Claims System, administered by USAC. Providers are eligible to seek reimbursement for the number of subscribers reported in their uniform snapshot on the first of the month for that month. In order to seek reimbursement, providers are required to certify that participating consumers will not be charged an early termination fee, were not subject to a mandatory waiting period, and that they are subject to the generally applicable terms and conditions. As households are only entitled to one connected device, providers may only seek reimbursement for one connected device per household under the ACP. The maximum reimbursement amount will be calculated using the market-based approach. Under the market-based approach, providers may be reimbursed up to the statutory $100 limit provided the amount of reimbursement together with the co-pay does not exceed the market value of the connected device. Providers will be required to submit device characteristics and retail price information about analogous devices, or if they cannot do this, then provide evidence substantiating their claim to receive reimbursement.
- Consumer Protection: Providers are prohibited from considering the results of a credit check before deciding to enroll a household in the ACP, however they are not barred from running credit checks that are routinely used as part of the provider’s sign-up process for all consumers. Similarly, providers cannot use the credit check to determine which ACP-supported internet service plan the household can use their benefit for. Providers are permitted to terminate service after 90 consecutive days of non-payment, calculated using the due date, not the issue date, of the bill. Providers are not permitted to deny re-enrollment based upon a history of non-payment. The FCC will establish a dedicated ACP Complaint Process, which will be accessible through the FCC’s existing Consumer Complaint Center, to handle complaints related to the ACP. Providers are not permitted to upsell services, impose inappropriate restriction on their ability to switch internet service offerings or providers, or take any action that is considered unjust or unreasonable under the circumstances, among other general rules for protecting consumers.
- Outreach: All participating providers must notify their consumers who subscribe to or renew a subscription to an internet service offering about the ACP and how to enroll. This outreach must be conducted: (1) during enrollment for new subscribers; (2) at least 30 days before the date of renewal for subscribers not enrolled in the ACP who have fixed term plans longer than one month; and (3) annually for subscribers not already enrolled in the ACP who have month-to-month or similar non-fixed plans. Providers are also required to publicize the availability of the ACP in a manner reasonably designed to reach consumers likely to qualify and must include: (1) eligibility requirements; (2) that the ACP is non-transferrable and limited to one monthly internet discount and a one-time connected device discount (if the provider offers devices) per household; (3) how to enroll; and (4) that the ACP is a federal government benefit program operated by the FCC and if it ends, or when a household is no longer eligible, customers will be subject to the provider’s regular rates, terms, and conditions. Finally, providers are required to organize public awareness campaigns in collaboration with state agencies, public interest groups, or non-profit organizations. The FCC and other federal agencies will be collaborating for their own outreach campaigns.
- Transition of Legacy EBB Program Households: First, legacy EBB Program households that would not experience a bill change as a result of the non-Tribal benefit lowering to $30 per month, which includes subscribers whose current supported internet service cost is equal to or less than $30 a month, as well as subscribers who reside on qualifying Tribal lands, are not required to opt-in to continue to participate in the ACP at the end of the transition period. Second, subscribers who would experience a bill increase due to the reduction but have already expressed a willingness and ability to pay for broadband, which includes households that (1) were existing paying internet service customers with the broadband provider when the household enrolled in the EBB with that provider; (2) previously consented to the provider’s general terms and conditions if they continued to receive service at the end of the EBB Program; or (3) currently pay a fee for their supported internet service, must be allowed to opt out or change their service at the end of the transition period. Lastly, legacy EBB Program households that would experience a bill increase and have not indicated to the subscriber a willingness or ability to pay, including households that did not have a pre-existing paying customer relationship with their current provider and have not consented to the providers’ general terms and conditions if they continued service after the end of the transition period, or do not currently pay a fee for their EBB Program service, are required to opt-in to continue to participate in the ACP. For this last category, providers can switch households to an internet service that costs $30 or less per month after providing advance notice of the change, continue to provide the service without increasing the household’s bill if the provider has internet service options priced at $30 per month or less, or obtain consumer’s opt-in to continue to receive its current service with the $30 benefit level for the first increased bill after the end of the transition period. Reverification for legacy EBB Program households is currently underway and the FCC anticipates it will be completed by the end of the transition period.
- Audits, Enforcement, and Removal: USAC will be developing a system to conduct audits of the ACP, as they did with the EBB Program. Any violation of the ACP rules can be construed as a violation of the Communications Act of 1934 and enforced as such. The FCC can remove providers who have been found to be violating the program rules or other rules and requirements of the FCC, for fraud or committing any act that indicates a lack of business integrity or honesty that seriously and directly affects the provider’s responsibility in the ACP, and for conviction or civil judgment for fraud, theft, forgery, and other similar crimes that arise out of activities related to the ACP, EBB Program, and other FCC programs. Providers can also voluntarily withdraw from participation provided they notify USAC at least 90 days before the effective date of the withdrawal and notify households in the program of the provider’s withdrawal.
- USAC Administration: As with the EBB Program, USAC will administer the ACP.
In the FNPRM, the FCC seeks comment on structuring an outreach grant program and implementing a mechanism for determining the application of the enhanced benefit for those serving high-cost areas, as to be determined by the National Telecommunications Information Administration (NTIA). Specifically, the FNPRM seeks comment on:
- Structuring an outreach grant program to be managed by the Commission in support of consumer outreach concerning the Affordable Connectivity Program as permitted in the Infrastructure Act, including the duration and budget for such a program, the best methods of outreach that should be funded by the program, who should be considered an eligible entity for the grant program, and the application process.
- Implementing the high-cost provision of the Infrastructure Act which provides for a separate enhanced benefit of up to $75 per month for households that are served by providers in high-cost areas (as determined by the NTIA), including the definition of high-cost area, the mechanism for providers to show particularized economic hardship, and what specific information must be provided to demonstrate this hardship.
- Implementing a pilot program focused on expanding ACP participation by Federal Public Housing Assistance (“FPHA) beneficiaries. The FCC plans to partner with the FPHA programs to increase awareness and find other ways to increase participation in the ACP. The FCC seeks comment on how this should work, what outreach by these agencies should be encouraged to look like, and what other steps the FCC should put in place to assist eligible households with enrollment.
Comments will be due 30 days after the date of publication in the Federal Register; reply comments will be due 60 days after the date of publication in the Federal Register.
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