Funding shortfall forces FCC to slash monthly broadband benefits in May

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A federal program that has helped roughly 23 million American households receive free or heavily discounted high-speed internet is set to see sharp cuts in May, leaving many low-income families facing possible price hikes — or the imminent loss of service altogether.

Congress has not yet approved new money for the digital initiative, so the Federal Communications Commission announced Tuesday that it would have to reduce the maximum payment: Many will see their subsidies fall to $14 per month, less than half of what some now receive toward their broadband bills.

The looming change could mean a price hike for low-income families in the Affordable Connectivity Program, if the reduced federal aid isn’t enough to cover the full cost of their service. But the exact effects ultimately depend on internet providers, which can offer their own discounts — or simply elect to stop accepting federal subsidies in May.

AT&T, Charter, Comcast, Verizon and other companies have not fully detailed how they will handle the matter if the cuts kick in — or whether they plan to provide other financial relief to low-income families that could see rising bills. None of the four companies contacted immediately responded to requests for comment on Tuesday.

In a blog post last week, AT&T pointed subscribers toward its existing low-cost option, which costs $30 per month. The company did not say whether would accept partial federal subsidies in May.

“We encourage providers to take efforts to keep consumers connected at this crucial time,” the FCC said in a public notice.

The FCC notice arrived a day after the White House renewed its calls for Congress to approve new emergency funding for the Affordable Connectivity Program, which lawmakers enacted as part of a sprawling 2021 bipartisan law to improve the nation’s infrastructure. The idea originated in the coronavirus pandemic, as Democrats and Republicans looked to ensure that cash-strapped families — many thrust out of jobs — could continue to work, learn and communicate online.

Lawmakers this year have had multiple opportunities to address the funding shortfall, but they have repeatedly failed to act, even as part of a deal to fund the government that they adopted last month. Their next opportunity may arrive in the coming weeks, when Congress weighs emergency legislation that would provision new aid to Ukraine and reconstruction money for the collapsed Francis Scott Key Bridge in Baltimore.

“Without congressional action to extend funding for the program, those 23 million households and families will lose that benefit and will see internet costs go up or lose internet access,” Stephen Benjamin, a senior adviser to the president, said on a recent call with reporters.

Anticipating a shortfall, the FCC began taking steps earlier this year to wind down the Affordable Connectivity Program. It halted new sign-ups in February and ordered internet providers in March to begin communicating with customers about the potential end of the program.

Previewing the cuts, the FCC said Tuesday that most qualified households would receive $14 per month, down from the $30 they had received. For those living on tribal lands, the maximum monthly benefit would fall to $35 beginning in May, down from $75. The initiative also allows families to receive a credit for eligible devices, which would be reduced to $47 from the current $100.

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