US government's decision to kill internet discount leaves millions offline
What's the story
The discontinuation of the Affordable Connectivity Program (ACP) in the US, has forced a significant number of low-income households terminating their internet services.
Charter Communications, a leading telecommunications company, reported a net loss of 154,000 internet subscribers following the end of this federal discount.
The company attributes this substantial decrease primarily to customers who were previously benefiting from ACP.
The program offered a $30 monthly broadband discount that ended in May, after Congress did not approve additional funding.
Subscriber loss
ACP's termination impacts Charter Communications's customer base
Approximately 100,000 of the lost subscribers were beneficiaries of the ACP, which in some cases provided free internet services.
The Joe Biden administration wanted $6 billion to fund the ACP till December 2024, but Republicans termed the program "wasteful."
This decision has had a significant impact on Charter Communications's customer base, as revealed in their Q2 2024 earnings report.
Warning
FCC warns of decreased internet access
FCC Chairperson Jessica Rosenworcel had warned that ending the discounts would lead to reduced internet access.
She referenced an FCC survey which found that 77% of households participating in the program, would either change their plan or completely discontinue their internet service once the discounts expired.
This prediction seems to be materializing as evidenced by Charter's recent subscriber loss.
Retention attempts
Charter Communications's efforts to retain customers
Charter Communications, which operates under the brand name Spectrum and serves 28.3 million residential internet customers across 41 states, has made retention offers to those who previously received an ACP subsidy.
The company's earnings report suggests that without these offers, the customer loss could have been even higher.
Despite these efforts, Charter CEO Chris Winfrey expressed concern about low-income households' ability to continue paying for internet service without a new subsidy.
Uncertain future
ACP's discontinuation and the future of internet subsidies
The ACP, which replaced a previous $50 monthly subsidy from the Emergency Broadband Benefit Program, only lasted a few years after its implementation in early 2022.
Additionally, the FCC Lifeline program that provides $9.25 monthly discounts is also at risk following a recent court ruling.
This series of events underscores an uncertain future for internet subsidies in the US, particularly for low-income households who rely on these programs to access essential online services.