For the past two years, the Affordable Connectivity Program (ACP) has been a vital lifeline keeping millions of Americans connected to the internet, offering $30 off the monthly bills of qualifying households — or $75 in Tribal areas. But now, with funds nearly depleted, and no sure sign Congress will refund the program, the future of ACP is thrown into question.

This uncertainty creates challenges not only for the 20+ million families who depend on the ACP, but for the internet service providers (ISPs) that have offered the benefit to their customers.

I spoke to Dave and Laura Gibbons, co-founders of Black Bear Fiber and members of Connect Humanity’s Appalachia Digital Accelerator to find out what the end of the ACP would mean for their customers and their business.

Founding a network to serve their community

David and Laura created their business to fill a need. Living in rural Central Pennsylvania, they had few options when it came to selecting a broadband provider. High cost, low-population areas rarely see traditional ISPs clamoring to invest. So, knowing what good connectivity could bring to their community,  Dave and Laura rolled up their sleeves and did it themselves. Building on the success of a Wireless ISP that David set up in 2015, they set up Centre WISP to provide fixed wireless service in 2019, and then Black Bear Fiber in 2021, strongly believing that fiber is, “a better and more reliable long term asset to keep customers connected.”

Providing affordable, high quality service throughout their community is Dave and Laura’s priority, and the ACP has been an important part of that. They priced their base fiber package at the exact value of the ACP and Lifeline Program combined so that qualifying households could enjoy speeds of 100Mbps symmetrical at essentially no-cost. At this price, as Dave explains, the cost of equipment and installation is not covered until around the 10th monthly payment.

Black Bear Fiber will be affected by another financial loss in absence of the ACP. Dave and Laura used COVID infrastructure funds to build connectivity to houses they knew would only be able to afford service with the monthly subsidy. It was a risk, but they were confident Congress would continue to fund the ACP, and they were happy to connect unserved customers. Now, a portion of their government-funded infrastructure may become unused. 

Dave reflects on the confidence he had that the ACP would be sustained, “Personally, I’ve just never seen a subsidy program like this come out and then not get renewed.” Based on how many Broadband Equity Access and Deployment (BEAD) plans are similarly premised on the continuation of ACP, he’s clearly not the only one. It’s evident that bridging the digital divide long term requires layering state and federal programs. 

Uncertainty comes at a cost for small ISPs

Dave and Laura mentioned how much work it is for a small business to get a program like the ACP running. While the Comcasts and Charters of the world have entire departments dedicated to enrolling customers and processing ACP benefits, for a company like Black Bear, this becomes yet another part of someone’s job. Laura explains:

“We’ve already been through the transition [from] the Emergency Broadband Benefit to the ACP benefit and the change in amount. These programs require a lot of effort on the back end too that isn’t always super straightforward…verifying the enrollment, enrolling them, submitting the claims, the portals, they’re very time intensive.” 

The stop-start, unpredictable nature of federal subsidies are a drain on the small ISPs that are already stretched trying to provide the best service they can in challenging commercial environments.

These business owners crave some consistency so they can focus on their core business of serving customers. Dave and Laura want to be able to continue to subsidize the bills of customers who may otherwise be unable to afford service. But right now they don’t know if the ACP will be extended or, if not, when the cutoff will be.

There’s also uncertainty in how the program wind down would work. The pair said that only one thing is clear, they will not immediately cut service for customers unable to pay their bill when the ACP funds run out. While the details remain fuzzy, customers must receive notices of missed payments before they lose service.

Laura and Dave are almost certain to take a hit with some unpaid bills. They don’t want to cut customers off at all — and plan to do all they can to keep people connected. At the same time, they run a business with employees to pay, costs to cover, and debt to serve.

Added pressure amid high inflation

Dave talked about the financial pressures of running a business in a time of unprecedented inflation. His costs have gone up, his employees need raises— and at the same time, his customers have less money in their pockets to pay for service. The end of the ACP is yet another stress factor in an already tough environment.

And yet, with less than 2% of their customer base receiving the benefit, the wind down of the ACP would not be an existential event for Black Bear. With a loyal customer base and strong recurring revenue, their business case remains strong. Dave and Laura are more worried about what it means for low-income customers who could face losing access to everything the internet enables.

“It’s very frustrating as an ISP to see the lack of effort to legislate from our lawmakers. I think this is a program that is pretty objectively good. It’s not really all that much money [to the government]. It’s helping people who really need this assistance to get access to the internet. And they just can’t seem to get out of their own way.”

The penny has yet to drop with customers

While Dave and Laura have sent notifications warning customers that their $30 discount could disappear in the coming months, so far they haven’t received much feedback. Laura thinks the message hasn’t landed yet but that, “customers will notice more when the benefit is not applied to their invoice than they are to read the emails.” 

When they do, Dave and Laura can expect a stream of customers through their door. Unlike the big national and regional providers, Centre WISP and Black Bear Fiber have local offices that customers can walk into when they have a problem (in fact, Dave steps away during our interview to help a customer with a billing question).

When a benefit like ACP is cut, it’s the ISPs who have to face the heat from customers — not Congress or the FCC — as they find out they no longer get a discount on their bill. Even if funding returns down the line, Dave and Laura wonder what the temporary loss of support would mean for the long-term trust in the program, both from ISPs and consumers. They, at least, will be less eager to adopt the program a second time.

“It puts us in a situation where we need to be skeptical about these kinds of programs moving forward. And we’re going to have to make a decision in the future”.

With the deadline for sign ups behind us, Dave, Laura, and we here at Connect Humanity are hoping that Congress figures something out before it gets to that point.

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Kaitlynn Hintz is an American Connection Corps Member, part of the Lead for America Program. At Connect Humanity, she is part of the Appalachia Digital Accelerator team.