The impact of losing the Affordable Connectivity Program subsidies gets a lot of attention, because it is leaving many of low income households without broadband and has changed the math for BEAD funding. Here’s Pew’s latest on the topic…

Support for affordability programs is technically allowed under BEAD and DEA rules, but states are heavily restricted in how they use funds. For example, under the BEAD program, consumer subsidies and other “nondeployment” activities can be funded only if the state demonstrates that it can reach all of its unserved and underserved locations with deployment projects. Currently, less than half of all states anticipate having any nondeployment funding available. And under DEA, affordability subsidies are capped at 10% of a state’s allocation. That’s a drop in the bucket and not a viable alternative to ACP.

In 2024, three strategies to solve this problem emerged, with state lawmakers exploring different approaches to resolve funding gaps and define eligibility. Some lawmakers—such as those in California and Oregon—are considering modifying their state-operated Lifeline subsidy programs in ways that increase the funding available to supplement the $9.25 monthly discount already offered by the federally operated Lifeline program. Others—such as those in New York, North Carolina, and Pennsylvania—considered legislation to establish their own broadband subsidies. In addition, some states debated replicating the BEAD low-cost option provision by requiring service providers under contract with the state to offer plans at a state-determined affordable price.

New York’s Affordable Broadband Act, adopted in 2021, takes a broader regulatory approach and could be another option for states. The law, passed months before the formal creation of ACP but not yet enforced because of a lengthy legal dispute, requires ISPs operating in New York to provide a low-cost option at $15 or $20 for low-income subscribers, depending on the plan’s speed. However, some legal experts have suggested that additional legal scrutiny may be required after the Federal Communications Commission’s recent net neutrality order redefining its regulatory jurisdiction over broadband service providers and other related federal court cases.