Charter Communications agreed to charge $15 monthly for a low-income broadband plan in New York state under a settlement the Public Service Commission approved Thursday, Gov. Kathy Hochul (D) said Thursday. The New York PSC in its 2016 order approving the company’s acquisition of Time Warner Cable required Charter to sell a $14.99 monthly plan with at least 30 Mbps download speeds (see 1601270028). The New York Department of Public Service alleged that Charter violated the order when it increased the price to $24.99 for 50 Mbps without PSC approval. Under the settlement, Charter will provide 50 Mbps speeds for $15 monthly for four years to New Yorkers who participate in the National Free School Lunch Program or receive supplemental security income benefits. For years two through four, Charter may raise the price only to account for inflation. The settlement is important because the federal affordable connectivity program has expired and litigation has delayed New York state’s Affordable Broadband Act (see 2408130021), PSC Chair Rory Christian said in Hochul’s news release. “The only low-income broadband requirements that currently exist in New York are the low-income program conditions in the PSC’s orders approving certain mergers. By approving this settlement, the PSC will make affordable broadband available to eligible New Yorkers in Charter's service territory while the litigation is resolved and/or federal funding for ACP is reinstated or federal broadband policy is clarified.” Hochul applauded the news. “This settlement directly benefits thousands of low-income New York families.” A Charter spokesperson said the company's "prices and speeds are competitive and affordable" in urban, suburban and rural areas, with no modem fees, annual contracts or data caps.
Affordable Connectivity Program (ACP)
What is the Affordable Connectivity Program (ACP)?
The Affordable Connectivity Program was a recently expired subsidy for low-income households to lower the cost of purchasing broadband internet and connected devices. The program was signed into law as part of the 2021 Infrastructure Investment and Jobs Act and administered by the FCC up until June 1, 2024, due to expiration of the ACP’s funding.
Will the ACP Return?
Congress continues to debate restoring ACP funding, with immediate next steps likely to come from the Senate Commerce Committee or Congressional discussions on revising the Universal Service Fund.
The FCC’s Communications, Equity and Diversity Council may lobby for affordable connectivity program funding, according to comments at Tuesday’s CEDC meeting, the second under a new charter that lasts until 2025. The CEDC has 10 months to prepare recommendations for the FCC on implementing digital discrimination rules and getting the most for underserved communities out of federal broadband infrastructure funding, Chair Heather Gate said. “We must make recommendations to the FCC directly, but we should not be afraid to make recommendations that the FCC can communicate with other agencies,” Gate said. “We may also ask the FCC to communicate our recommendations with the White House or Congress."
Facing $2 billion in debt coming due in November and likely short of the cash on hand it will need to operate in Q4, EchoStar plans to use spectrum assets to raise the funding it needs, CEO Hamid Akhavan said Friday as the company announced Q2 earnings. EchoStar has more spectrum than it needs for its wireless plans, Akhavan said. But the company doesn't intend to dispose or relinquish ownership of spectrum holdings, he said. Instead, it's considering financing options that don't require selling.
Backers of resurrecting the FCC’s affordable connectivity program are tempering their expectations about how much a pair of July developments may increase Congress’ appetite for injecting stopgap funding into the lapsed initiative this year. The Senate Commerce Committee approved a surprise amendment July 31 to the Proper Leadership to Align Networks for Broadband Act (S-2238) that would allocate $7 billion to ACP for FY 2024 (see 2407310048). Former President Donald Trump earlier that month selected Sen. JD Vance of Ohio, a Republican who backed ACP funding in the face of opposition from party leaders, as his running mate (see 2407150062).
Internet subscriber losses due to the end of the affordable connectivity program more than offset what otherwise would have been small subscriber gains in Q2 for WideOpenWest, CEO Teresa Elder said on an earnings call Thursday as the company announced Q2 results. Elder said WOW's focus on growing its fiber footprinting in expansion markets has been paying off. The company would have added more than 300 broadband customers in the quarter if not for 5,000 ACP subscribers it lost. She said WOW expects additional ACP subscriber losses in Q3. The company ended Q2 with 485,000 high-speed data revenue generating units, down from 507,800 the same quarter a year earlier, and 71,600 video revenue generating units, down from 110,000 a year prior. Elder said WOW is seeing increased numbers of customers buying broadband buddle with YouTube TV as the cabler transitions from traditional linear service to the streaming package (see 2305150027). Elder didn't address questions about the pending takeover offer from DigitalBridge and Crestview Partners (see 2405030047). She said a special board committee is evaluating the offer.
While a 5th U.S. Circuit Court of Appeals' ruling rejecting the FCC’s USF contribution methodology calls the entire USF into question, it also offers an “opportunity” for change, Joe Kane, Information Technology and Innovation Foundation director-broadband and spectrum policy, blogged Tuesday. Some experts say the case is likely headed for U.S. Supreme Court review (see 2407260044). “For years, policymakers have acknowledged the need to overhaul the USF because of its ballooning fees, potential for waste, and outdated priorities,” Kane said in a Broadband Breakfast blog: “Now, with its legal foundation in question, Congress has a clear mandate to reallocate funding to vital broadband programs like the Affordable Connectivity Program (ACP), while eliminating outdated and redundant initiatives.”
Minnesota Gov. Tim Walz, Vice President Kamala Harris’ running mate on the Democrats’ 2024 presidential ticket, enters the national stage with a record of pro-rural broadband action but is largely a blank slate on other tech and telecom matters, observers said in interviews. Harris announced Walz as her pick Tuesday after a two-week vetting process in which other governors with stronger broadband policy backgrounds were in contention (see 2407260001). Sen. JD Vance of Ohio, the Republicans’ vice presidential nominee, has been a leading congressional advocate for injecting funding into the FCC’s lapsed affordable connectivity program (see 2407150062).
Cable One and Altice say the end of the affordable connectivity program isn't having a big effect so far on subscriber numbers. The companies announced their Q2 results Thursday. Charter Communications last week said it took a notable subscriber hit from ACP, which ended in June. Also, last week, Comcast said it expects an ACP-related impact in Q3 (see 2407260006). WideOpenWest reports Q2 results Aug. 8. With Cable One ending Q2 with 963,000 residential internet primary service units, up from 960,100 in Q2 a year ago, it's the only publicly traded cable operator with positive year over year subscriber growth, MoffettNathanson's Craig Moffett wrote investors. In a call with Wall Street last week as Altice announced Q2 results, CEO Dennis Mathew said ACP's demise spurred "nominal" increased churn. The company said it lost 51,000 broadband subs in Q2, in part due to competition as well as ACP. Altice ended Q2 with 4.1 million residential broadband PSUs, down more than 130,000 from the same quarter a year earlier. Cable One said that of its 48,000 ACP subscribers, 4,000 left in Q2. While 91% were retained at least through Q2, CEO Julie Laulis said future churn is possible. Moreover, she said the company faces "steadily increased" wireline competition. Asked about the possibility of a wireless offering, Laulis was noncommittal and said Cable One models a mobile virtual network operator partnership multiple times a year. Cable One CFO Todd Koetje said the company's network is 42% by fiber operators, but that the pace of overbuilding could start slowing due to the increased cost of capital. Altice ended the quarter with 385,000 mobile lines, up from 264,000 year over year. CFO Marc Sirota said mobile line additions in the quarter were more than double the pace of what they were Q2 a year ago, and he expects accelerated mobile growth in the second half of the year. Moffett wrote Altice "might actually be better positioned" than other cable operators in wireline/wireless convergence because it has a big opportunity to offload wireless traffic in its legacy Cablevision footprint in the East onto its own network.
The Senate Commerce Committee’s surprise adoption Wednesday of an amendment to the Proper Leadership to Align Networks for Broadband Act (S-2238) that would allocate $7 billion in stopgap funding for the FCC’s lapsed affordable connectivity program likely imperils chamber passage of that measure, lawmakers and lobbyists told us. Debate over the pro-ACP amendment and a proposal that attached $3.08 billion to fully fund the FCC’s Secure and Trusted Communications Networks Reimbursement Program also signaled continued friction among panel members over the Spectrum and National Security Act (S-4207).
T-Mobile on Wednesday became the last of the three major wireless carriers to report Q2 results, announcing it added 777,000 net postpaid phone subscribers and 406,000 fixed wireless subscribers. However, it warned of a financial hit of up to $450 million this year from the shuttering of the affordable connectivity program. Meanwhile, CEO Mike Sievert told analysts T-Mobile is “open-minded” but not set on buying additional fiber assets.