So much news swirling around the Affordable Connectivity Program (ACP), broadband subsidies for low income households, as there’s a risk at the program ending, which could impact 238,000 low income Minnesotans. The Daily Yonder takes a look at whether rural or metro communities benefit most…

While the future of the ACP remains uncertain, it is worth reviewing how the program fared in rural America. Home broadband adoption rates in rural areas have historically been 5-10 percentage points lower than those in urban locations. This is due partly to lower internet availability but also higher monthly costs in rural geographies.  So, were rural households, with lower broadband adoption rates and higher monthly bills more likely to embrace the program?

As the chart below suggests, the short answer is no. Using county-level data on ACP subscribers for each month of the program and estimates of the number of eligible households in each county, it shows that rural households were far less likely to participate than urban households.  Even more tellingly, the gap grew dramatically over the life of the program.

As the ACP began in January 2022, only about 13% of eligible households in the most rural counties (defined as codes 7-9 in the USDA’s Rural-Urban Continuum Code) signed up. This was well below the 21% rate for eligible urban households (RUC Codes 1-3).  These highly-rural counties saw their participation rate grow to 28% by late 2023, while urban households increased to 46%.  So, the rural-urban ACP participation gap increased from 8 percentage points (21% – 13%) to nearly 20 percentage points (46% – 28%) over the roughly two-year life of the program.  A smaller gap (and increase) was seen for less rural counties (RUC Codes 4-6), from 3 percentage points in January 2022 to 9 percentage points by late 2023.

There are several reasons for the rural-urban ACP participation gap visualized above.  The ACP (and EBB) was initially heavily marketed to the FCC’s Lifeline program participants, which had a strong urban presence (any Lifeline participant automatically qualified for ACP). This largely explains higher urban participation early on. As time went on, rural areas were disadvantaged by

1) lower numbers of internet providers advertising the program and

2) fewer civic organizations like libraries or non-profits spreading word about the program and helping people sign up.

ACP Outreach grants were funded in mid-2023 to help spread the word and enroll eligible households, but most have not had much time to make an impact. A recent academic study also explores the “hassle costs” and “benefits stigma” associated with program participation – both of which are likely higher in rural areas.