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Universal internet plans hit a few funding snags

Robin Layton

Sep 27, 2023 — 5 min read

Monthly internet stipend to 20 million people may end; some fed funds may be too restrictive to help bridge the digital divide.

Rural barn amid trees.

Ensuring internet accessibility and affordability to all Americans has been a priority for the federal government for over a decade. 

However, there’s a fear that some funding will shortly run out and other funds are too restricted for internet service providers to qualify. We look at the issues and what they mean to you as an internet customer.

The Affordable Connectivity Program

The Affordable Connectivity Program (ACP) began dispersing funds in 2022 with $14 billion in federal money. It offers a $30/mo. stipend to households at or below 200% of the Federal Poverty Guidelines. Internet service providers (ISPs) participate by offering plans of at least 100 Mbps for $30/mo. or less, essentially making the internet plans free for participants. 

In some areas, that stipend is increased to $75/mo., including hard-to-access areas and Tribal lands.

As of September 2023, 20 million households are taking advantage of this program. However, the program may run out of funding by 2024. This could have devastating effects on homes and businesses that rely on the internet.

“Letting ACP funding lapse will erode that trust, making it even more difficult to reach many of the nation’s hardest-to-serve communities, wasting federal investments, and setting the universal broadband effort back years,” reported The Pew Charitable Trusts.

A group of congress members showed support in August for extending the ACP. They submitted a letter to the congressional leaders, “ACP has become a lifeline for Americans, and we cannot afford to let it expire. We strongly urge you to prioritize the extension of funding for the Affordable Connectivity Program in the upcoming government appropriations bill. Failure to extend funding would not only leave millions of families without access to the internet but also hinder our long-term competitiveness as a nation.”

The fate of the program now sits in the hands of Congress.

BEAD internet funds

The Bipartisan Infrastructure Law and Broadband Equity, Access and Deployment Progam (BEAD) awarded $42 billion to states and territories over the summer of 2023. 

The BEAD funding is to provide internet to end the digital divide, which is the space occupied by unserved locations without internet access and underserved locations that only have access under 100/20 Mbps. It is also the divide between those who can afford internet and those who cannot.

The BEAD program has some detractors, who have pointed out that some of the restrictions for use of the funds may exclude ISPs that could provide service in unserved areas. 

The rule is that grant recipients must provide a letter of credit for 25% of the award, in addition to a 25% match requirement.

As reported by Light Reading, “The issue, according to Connect Humanity, is the collateral required to receive a letter of credit. Providing an example, the group said that an ISP aiming to build a $10 million broadband network would need to raise over $2 million in collateral (with interest and fees), in addition to supplying matching funds, to be eligible for a $7.5 million BEAD grant. ‘Many simply won’t apply,’ wrote Connect Humanity.”

Stakeholders like smaller ISPs are banding together to ask the governing entity, the National Telecommunications and Information Administration (NTIA), to reconsider the rule, which is unlikely. Light Reading cited a recent NTIA webinar, “NTIA’s deputy associate administrator for BEAD, Evan Feinman, indicated the agency is firm on the letter of credit requirement: ‘There will be opportunities for folks to seek waivers to that requirement, but those waivers are going to be pretty tightly controlled,'” he said.”

Scroll over your state to see how much BEAD funding they may receive:

What you can do

For nearly 20 million households, losing the ACP benefit will end access to the internet. For others waiting for internet access or better speed to use the internet more effectively, BEAD funding that is too hard to use will stop ISPs from even trying to extend or provide services. Fortunately, there are some other options available for both groups. 

No internet? You have options

If you are in an area with limited internet choices, satellite is a good choice for rural internet access. HughesNet, Viasat and Starlink are the main satellite ISPs that cover nearly all of the country. Set up can be expensive, however, from $400 to $600, with monthly fees ranging from $49 to $120.

If satellite isn’t available or out of your price range, you can use your cellphone as an internet connection. If you don’t use a lot of bandwidth to stream or game, or rely on your internet for work or school, this could be a good option to save money and still check up on your social media and email.

Many rural areas are still using DSL or dial-up internet connections. While these types of internet don’t usually allow you to stream or work from home, you will be able to use email, browse online and use social media. 

Can’t afford internet? There are programs to help

An internet plan can be a large monthly expense. If you have ACP currently and it ends, you’ll need to find a cheap internet replacement. Many internet service providers like Xfinity and Windstream offer up to 100 Mbps for $30/mo. or under. Some regional providers like Mediacom have plans starting at $19.99/mo.

You can also get discounted plans from AT&T, Cox, Optimum and Spectrum if you meet income requirements or participate in another government assistance program.

For qualifying households, the federal government’s Lifeline program can give you $9.25/mo. towards a home phone or internet service. 

Nonprofits are trying to close the digital divide as well, like the National Digital Inclusion Alliance, which is a hub for organizations offering help connecting to the internet. You can check out their Free & Low-Cost Internet page to see if any programs are available in your area.

Some providers who offer dial-up internet start under $10/mo. Although you won’t be able to do much other than check your email and browse, you’ll still be online until a stronger broadband connection is built

See Allconnect’s low-income guide for other available programs.

Need faster internet? Here’s how to update your current plan

If you have a slow internet connection that isn’t meeting your needs, Allconnect can help you decide what speed you need and find faster internet plans in your area. 100 Mbps is about the standard speed you’ll want to consider with plans ranging from $19.99 to $50.00/mo. 

For growing households with gamers, students and work-from-home internet users, consider a fiber connection, which will give you the fastest internet available in your area, with symmetrical download and upload speeds. 

Xfinity, Cox, AT&T and Verizon offer fiber plans from 60 to 6,000 Mbps at $24.99 to $240/mo.

Find more broadband news and studies on trends in the industry on Allconnect’s news hub and research hub.

Robin Layton

Written by:

Robin Layton

Editor, Broadband Content

Robin Layton is an editor for the broadband marketplace Allconnect. She built her internet industry expertise writing and editing for four years on the site, as well as on Allconnect’s sister site MYMOVE.com. … Read more

Camryn Smith

Edited by:

Camryn Smith

Associate Writer

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