ACP ⁠i⁠s Cr⁠i⁠⁠t⁠⁠i⁠cal ⁠t⁠o Flor⁠i⁠da Broadband Success; Congress Mus⁠t⁠ Renew I⁠t⁠

For an organization with a mission to defend the principles of limited government and free markets, there will always be at the forefront of our fiscal analysis the question, “when is federal government spending both appropriate and valuable?” Article I, Section 8 of the U.S. Constitution,  articulates where the limiting authority of Congress lands in this respect. As our 235-plus year experiment in self-governance continues, the question has become fraught with complexities that both of our major political parties have chosen fiscal paths that have drifted our federal balance sheet more than $30 trillion into the red.

Nevertheless, there are cases where federal investment, done strategically, wisely, and with appropriate guardrails, can promote markets, encourage innovation, and address issues needing large-scale solutions. 

The Affordable Connectivity Program, commonly known as ACP, is illustrative of how when lawmakers in Washington orient programs around markets and consumers, not subsidies or crony capitalism, they can deliver real results for Americans in a cost-effective and efficient manner. The evidence shows that ACP has achieved these goals, which is why even fiscally conservative-minded individuals and groups see it as a bit of an anomaly – an example of the federal government performing its role in both an effective and efficient manner that promotes free market competition and growth, rather than encroaching on it.

As a direct result of ACP, 18 million mainly low-income households across the United States, the Affordable Connectivity Program (ACP) has become a lifeline, connecting some of the poorest Americans to high-speed broadband internet and opportunities to work remotely, receive virtual healthcare, and receive an education online. Without ACP, America’s digital divide- the difference between those who can access the internet and those who cannot- would be far greater, hampering economic development, depressing job creation, undermining prosperity, and limiting social mobility.

Yet, despite the success of ACP in connecting America’s poorest to broadband internet and making a significant contribution to closing the digital divide, these gains will vanish if Congress fails to fund the program beyond 2024. For a federal program that has been remarkably successful and enjoys broad bipartisan support, the demise of ACP could send America’s poorest back to the digital dark age.

The end of ACP would be incredibly damaging to Florida. As of March 2023, the sunshine state had over 1.3 million enrollees and had the fourth most recipients behind California, Texas, and New York. If Congress fails to renew ACP, many of the gains the state has made over the past few years to close the digital divide would be undone, disconnecting the state’s poorest residents and those who have the most to gain connectivity.

Congress must act, and given ACP’s importance to Florida, the state’s congressional delegation must lead the charge to appropriate the program beyond 2024. Doing so will supercharge economic development in the Sunshine State and keep Florida on its path to prosperity.

Created as part of the Infrastructure Investment and Jobs Act (IIJA), ACP “provides $30 per month to eligible households, as well a single $100 discount for the purchase of equipment such as laptops, desktop computers, and tablets.” Congress appropriated $14.2 billion toward ACP, and these funds were designed to connect the 18 percent of households that do not subscribe to broadband services because of cost. 

Unlike other federal connectivity programs, ACP acts as a voucher system instead of a direct subsidy, allowing participants “to shop around” for the best service and incentivizing private companies to compete for consumers and deploy broadband to underserved and unserved communities. Unlike a direct subsidy or establishment of a government-owned network, broadband voucher programs create market conditions by allowing consumers to choose their provider, select another if service and quality are poor, and, most importantly, force companies to compete for the vouchers. 

ACP, in many ways, benefits low-income families in the same way that school choice benefits public school-children. Instead of creating a one-size fits all approach through, say, a government-owned network or subsidy that crowds out competition and investment, vouchers give consumers “choices over what service they want” while also driving competition among providers who have a larger base of potential subscribers. Such incentives ultimately push providers to deploy to more areas and lower prices. Just like school choice programs, which result in overall better educational outcomes, ACP has resulted in more Americans connected and tax dollars spent efficiently. 

In Florida, the successes of ACP in creating market conditions is evident in the fact that around 50 companies participate in the program, providing discounted- or even free- broadband to those who meet certain eligibility criteria.

To qualify for ACP, prospective enrollees must meet specific criteria. To qualify, applicants must earn below 200% of the federal poverty guidelines based on household size or participate in federal assistance programs such as Medicaid, SNAP, or WIP. Such stringent requirements minimize the risk of fraud and ensure Congress sends taxpayer dollars where they are most needed.

Data from the Universal Service Administrative Company (USAC), a non-profit entity within the Federal Communications Commission (FCC), allows for a granular study of which regions of Florida would be most affected by the loss of ACP and which areas would likely see the greatest increase in lost connectivity. Miami-Dade County, for example, could see over 165,000 households lose access to broadband if Congress fails to renew ACP. Similarly, Hillsborough County could see over 117,000 households cut off from broadband and the benefits it provides.

Top Five Florida Counties by ACP Recipients, May 1, 2023.

For a state that prides itself on its efforts to close the digital divide and ensure every resident can reap the economic prosperity of broadband connectivity, the prospect that Congress could kill a program that serves over 1.3 million Florida households is a serious concern for the state’s elected representatives.

ACP has also been remarkably successful in targeting low-income communities and households that would struggle to meet the cost of service. As the table below outlines, the five counties with the highest percentage of ACP recipients in Florida all have a median household income well below the state’s median income of $59,734 and well below the national median household income of $70,784. Citrus County, a rural county 70 miles north of Tampa has a median household income of just $48, 664 and an ACP participation rate of 10.8. percent. Similarly, Putnam County, which lies between Gainesville and Daytona Beach has a median household income of just $48,664 and an ACP participation rate of 10.10 percent. 

Conversely, counties in Florida that have the lowest percentage of ACP recipients have incomes well above the state’s median household income and close to or above the national average. Monroe County, home to the wealthy Florida Keys, has a median household income of $69,490 but an ACP participation rate of just 1.70 percent. 

Taken together, this data demonstrates that while more work needs to be done to connect the poorest in Florida, ACP is remarkably efficient in targeting funds toward low-income communities and connecting those that would most likely find cost a barrier to connectivity.

Top Counties By Percentage of ACP Recipients, May 1, 2023:

Florida Counties with Fewest Percent of ACP recipients, May 1, 2023:

It should be crystal clear to lawmakers in Washington, and for Florida’s congressional delegation in particular, that the Affordable Connectivity Program is working to connect those who would otherwise be unable to afford broadband services. Despite the successes of ACP, its future remains uncertain, and a failure to fund the program beyond 2024 could send millions across the country and over 1.3 million Floridians back to the digital dark age. 

In an era when broadband is a necessity, not a luxury, Congress and Florida’s congressional delegation simply cannot let this happen.