Connection interrupted: Federal internet discount begins to expire

Dan Drljaca lives in a Wisconsin town with no stoplights and one high-speed internet provider that charges $65 a month for broadband service.

That’s too steep for Drljaca, 65, who lives on limited disability income. He had only been able to afford it thanks to a federal government program that discounted his internet service. That subsidy is coming to an end this month.

“It made the difference between affordable and ‘dream on,’” he told NBC News in a phone interview.

Drljaca represents one of the 23 million households across the country that the Biden administration says will have to pay more out of pocket for internet access as federal funding for the Affordable Connectivity Program runs out. Backed by $14.2 billion in the 2021 Bipartisan Infrastructure Law, the program discounted high-speed internet service for qualifying households by up to $30 per month ($75 for tribal households), with a one-time $100 discount on a device like a laptop or tablet. The goal was to close the digital divide made clear during the Covid-19 shutdowns.

On Wednesday, that federal government program begins to wind down despite strong bipartisan support and little in the way of serious opposition. Drljaca will go back to his roughly 10-minute walk to use the free WIFI at the Wabeno public library to join his telehealth appointments, access any news and renew his state disability benefits. He has a smartphone, but gets by on just 1 gigabyte of data a month.

There will be “a huge difference from going on the internet every day, to not at all again,” he said.

A 2023 survey done by USTelcom, a telecommunications trade organization, found the average cost of internet access has dropped by around 55% since 2015, even as download speeds have jumped by more than 140%. Despite that, quality broadband access and affordability remain an issue for an estimated 42 million Americans, according to researchers at BroadbandNow, a company that tracks internet access.

For years, the federal government and states have sought to address the issue through tax incentives and special funds, as well as targeted programs like ReConnect that doled out grants and loan guarantees. But no effort has been as far-reaching as the Affordable Connectivity Program (ACP), which started as an emergency benefit to help Americans afford internet service during the pandemic.

In January, enrollees in the program were first warned that it could end, with the federal government closing applications in February. While April was the final month of the full subsidy, the Federal Communications Commission announced a partial extension, more than halving the discount in May, as funds are completely exhausted.

The White House has repeatedly blasted congressional Republicans for not acting on the president’s supplemental request to continue funding for what it calls “the largest internet affordability program in our nation’s history.”

“Folks, high-speed internet isn’t a luxury any longer, it’s consequential. And the need for it will only continue to grow,” Biden said in a post on X, formally called Twitter. “But Republicans in Congress still haven’t acted, putting millions of their own constituents in a position where their internet costs could go up — or they could lose connection altogether.”

Despite some conservative opposition to new government spending, the program has earned bipartisan support, with a coalition of lawmakers from both parties and chambers of Congress and more than 400 companies and organizations pushing for its extension.

Sen. John Fetterman, D-Pa., introduced a bill on Wednesday to make the program permanent, using broadband and edge service providers to fund the discount.

Fetterman’s bill comes after a $7 billion Senate bill to extend the program was introduced in January but never received a vote. That bipartisan plan was authored by Sen. Peter Welch, D-Vt., and co-sponsored by three Republicans, including Sen. JD Vance of Ohio. An identical House bill is cosponsored by a majority of the chamber, including most Democrats as well as 22 Republicans.

“What I’ve learned in my time in Washington is that you’ve got to be relentless, even for the easy cases, and I think the affordable connectivity program is the easy case,” FCC Chairwoman Jessica Rosenworcel told NBC News in a phone interview Tuesday.

“We’ve made real gains when it comes to closing the digital divide for students and their families, and it chills me to think that we would lose those gains and lose that progress,” Rosenworcel said. An FCC survey found that 68% of the households enrolled in the program previously had zero or inconsistent connectivity before the assistance.

More than 1,300 internet service providers accepted ACP benefits, including 20 major companies who worked with the administration to offer recipients no cost internet. Comcast, the parent company of NBCUniversal, which owns NBC News, is a participating service provider and has advocated for the extension of this program.

Not every person enrolled will lose their access to the internet. Some will choose to pay at a higher cost, while others will be eligible for a smaller and more restrictive benefit program that offers a $9.25 monthly discount, called Lifeline. And still others will be able to take advantage of new programs or promotional discounts like one announced by Verizon to assist struggling families.

However, a patchwork of smaller programs and private actions can only do so much.

Dave Berka runs a Milwaukee-area United Way initiative called Techquity that was born from the pandemic. It has helped around 100 families enroll in ACP, while also using private donations to help fund devices and offer digital literacy training sessions.

He said enrollees range from working professionals to families, with many also receiving help through other federal and state support programs. According to the Biden administration, nearly half of those enrolled are military families.

“Most of those families will have to make some really hard budget choices,” Berka warned.

Acknowledging the billions in national spending soon to be gone, Berka conceded that “there really isn’t anything to fill the gap in the way that ACP does.”