The affordable connectivity program is over and thousands of homes have already lost internet connection

Internet service for low-income Americans is starting to drop off as a result of the end of the US government’s Affordable Connectivity Program (ACP). On Friday, Charter Communications reported a net loss of 154,000 internet subscribers, which it said was mainly due to customers canceling after losing federal rebates. Reportedly about 100,000 of those customers were getting rebates, which in some cases were no longer available. Internet service made free To the consumer.

The $30 monthly broadband rebate offered by A.C.P. ended in may The Biden administration has stepped in after Congress failed to allocate more money requested $6 billion to fund the ACP through December 2024, but The Republicans said Described the programme as “useless”.

The main complaint from Republican lawmakers was that most of the ACP money went to households that already had broadband before the subsidy was created. FCC Chairwoman Jessica Rosenworcel warned that eliminating the rebate would reduce internet access, Saying The FCC survey found that 77 percent of participating households will change their plan or drop Internet service altogether after the discount expires.

Charter’s Q2 2024 Earnings Report The report provides some of the first evidence of users dropping internet service after losing rebates. “Residential internet subscribers decreased by 154,000 in the second quarter, primarily driven by the end of the FCC’s Affordable Connectivity Program subsidy in the second quarter, while increasing by 70,000 during the second quarter of 2023,” Charter said.

Across all ISPs, 23 million US households were enrolled in ACP. Research released in January 2024 found that Charter was serving more than 4 million ACP recipients and that 300,000 of Charter’s customers would be “at risk” of dropping internet service if the rebate ended. Given that ACP recipients must meet low-income eligibility requirements, losing the rebate could put a strain on their overall finances, even if they want to continue paying for internet service.

“The real question is the ability of customers to pay”

Charter, which offers service under the Spectrum brand, has 28.3 million residential internet customers in 41 states. The company’s earnings report said Charter made retention offers to customers who previously received ACP subsidies. Customer losses would obviously have been greater if those offers had not been in place.

Light readings reported Charter reported that about 100,000 of the 154,000 customers it lost were due to the ACP shutdown. Charter said it has so far retained most of its ACP customers, but low-income households will not be able to continue paying for internet service without new subsidies:

“We have retained the majority of ACP’s customers to date,” said Charter CEO Chris Winfrey. [Friday’s] earnings call, pointing to low-cost Internet programs and an offer of a free mobile line designed to retain those customers. “The real question is customers’ ability to pay — not just now, but over time.”

The ACP only lasted a few years. The FCC implemented a $30 monthly benefit beginning in 2022, which will replace the previous $50 monthly subsidy. Emergency Broadband Benefit Program Which began enrolling users in May 2021.

Separately, the FCC. Lifeline Program The one that offers a $9.25 monthly discount is in danger court ruling The costs of Lifeline are met by the Universal Service Fund, which was the subject of a constitutional challenge.

The U.S. Court of Appeals for the 5th Circuit found that the universal service fee on phone bills is a “wrongful tax” that violates the Constitution. But in similar cases, the 6th and 11th Circuit Appeals Courts ruled that the fund is constitutional. The circuit split increases the likelihood that the Supreme Court will take up the case.

Disclosure: The Advance/Newhouse Partnership, which owns 12.4 percent of Charter, is part of Advance Publications, which also owns Condé Nast, the parent company of Ars Technica and Wired.

This story was originally published here Ars Technica,