The US government’s decision to eliminate online discounts is depriving millions of people of access to the internet.

What is the story

The end of the Affordable Connectivity Program (ACP) in the U.S. has forced a significant number of low-income households to cancel their internet services.

Charter Communications, a leading telecommunications company, reported a net loss of 154,000 internet subscribers after the federal cut ended.

The company attributes this significant decline primarily to customers who previously used ACP.

The program offered a $30 monthly discount on broadband internet, but it ended in May because Congress did not approve additional funding.

ACP contract termination impacts Charter Communications customer base

About 100,000 of the lost subscribers were beneficiaries of the ACP program, which in some cases provided free Internet services.

The Joe Biden administration wanted to allocate $6 billion in funding for the ACP through December 2024, but Republicans have called the program “wasteful.”

This decision had a significant impact on Charter Communications’ customer base, as disclosed in its Q2 2024 earnings report.

FCC warns of reduced internet access

FCC Chairwoman Jessica Rosenworcel warned that eliminating the discounts would lead to reduced internet access.

She cited an FCC study that found that 77% of households participating in the program would either change their plan or cancel their internet service altogether once the discounts expired.

This prediction appears to be coming true, as evidenced by Charter’s recent subscriber loss.

Charter Communications Customer Retention Activities

Charter Communications, which operates under the Spectrum brand and serves 28.3 million residential internet customers in 41 states, has made offers to retain customers who previously received the ACP subsidy.

The company’s revenue report indicates that without these offers, customer loss could have been even greater.

Despite these efforts, Charter CEO Chris Winfrey expressed concerns about the ability of low-income households to sustain internet service charges without a new subsidy.

End of ACP operations and the future of online grants

The ACP program, which replaced the previous $50-per-month Emergency Broadband Benefit Program subsidy, has been in effect for just a few years after its implementation in early 2022.

Additionally, the FCC Lifeline program, which offers discounted rates of $9.25 per month, is also in jeopardy following a recent court ruling.

A series of events shows that the future of internet subsidies in the U.S. is uncertain, especially for low-income households that rely on these programs to access basic online services.