Charter Communications reported a loss of 154,000 customers in the second quarter of 2024. The company said the decline was mainly due to the end of the Affordable Connectivity Program. With this loss, Charter now has 28.3 million residential internet customers.
The company said the end of the Affordable Connectivity Program directly led to at least 100,000 customers stopping their service. The Affordable Connectivity Program started in late 2021 to lower internet bills for nearly 23 million Americans. It provided subsidies to low-income families for home internet service.
The program offered discounts of up to $30 per month for general households and up to $75 for households on qualifying tribal lands. Families making up to 200% of the federal poverty level or receiving SNAP or Medicaid benefits were eligible for these subsidies. The program stopped accepting new applicants on February 7, and it ran out of funding in May after Congress chose not to renew it.
In January, a bipartisan group of senators drafted legislation to provide an additional $7 billion for the program. The Biden administration has also advocated for its renewal. “This Congress, with bipartisan support, we’ve done an enormous amount, especially in response to COVID, as it highlighted the critical need for internet access,” said Peter Welch, D-Vermont.
“People couldn’t go to school or attend doctor appointments without the internet.”
Charter CEO Chris Winfrey noted that more Spectrum customers could lose internet access as bills become due. “Our service and retention teams are handling the volume of calls well, and we’ve retained the vast majority of ACP customers so far,” Winfrey said. “The real question is customers’ ability to pay, not just now, but over time.
I expect we’ll have a better view of the total ACP impact once we’re inside the fourth quarter.”
Low-income families are now burdened with an additional $30 to $75 per month for internet after the pandemic-era program ended in May. With the end of the Affordable Connectivity Program (ACP), 13% of subscribers face the tough decision to cancel their internet service. Phyllis Jackson, a retired administrative assistant in Monroeville, Pennsylvania, said she couldn’t imagine life without an internet connection.
“I consider the internet like my best friend a lot of times,” she said. “It makes me feel that I’m not alone.”
Jackson got her first home internet connection through the ACP. In May, the $14.2 billion program officially ran out of money, leaving Jackson and 23 million households with higher internet bills.
If these households decided to keep their internet service, 13% of ACP subscribers, or roughly 3 million households, planned to cancel their service after the program ended. The vast majority of federal broadband spending over the past two decades has gone toward expanding internet access to rural areas. In 2021, Congress dedicated substantial funds to broadband infrastructure, but only $14.2 billion went to making the internet more affordable through the ACP.
“We’re dedicating $42 billion towards making sure that the infrastructure exists, but we’re not devoting anything towards the affordability barrier,” Angela Siefer, Executive Director of the National Digital Inclusion Alliance, said. “That’s very lopsided and needs to be addressed.”
Many people who used the ACP won’t cut their internet subscriptions — they’ll just feel their already-strained budgets stretched a little thinner. Four ACP users reported that their internet connection is too vital to get rid of entirely, but it wasn’t easy to find that $30 elsewhere in their budgets.
“I’ve just had to do some juggling,” Serena Salisbury said. “I’ve had to go to cheaper household items, cheaper detergents. And my electric bill — I had to back off on that and find a different way of paying my electric bill just so I could keep my internet.”
Salisbury, one of the 5 million recipients who didn’t have an internet connection before the ACP, initially signed up during the pandemic to help the kids she was babysitting keep up with school.
Kathleen Wain found out about the ACP through a nonprofit that helps people save money on everyday expenses.
Charter faces challenges post-ACP termination
Wain lives in Bryson City, North Carolina, and raises two grandchildren in her subsidized-rent apartment.
“We’ll have to cut back,” Wain said. “We just won’t travel as much, because gas has gotten very high. We’ll cut down some of the groceries.”
“The main ways I try to save money are between my food and my electricity,” Jackson said.
“In the wintertime, it would be the heat; in the summertime, it would be the air. So I’ve tried to watch that — keep that low and cut back.”
One thing experts and ACP users consistently emphasized was how the ACP established a sense of consistency with their internet service. “I was thinking that it’s something I’m going to have for years,” Jackson said.
“When you’re on a fixed budget and you’re constantly trying to save dollars here and there, that $30 is necessary.”
In Benton’s survey, 56% of low-income households said a monthly bill up to $75 was too expensive; the average monthly internet bill they reported was $66.53. In other words, there’s very little wiggle room for these households before internet costs become unaffordable. “The ACP helped close the digital divide, but it also addressed this issue of subscription vulnerability,” John Horrigan, Senior Fellow at the Benton Institute, said.
“I think it’s sometimes underappreciated how the ACP has helped with maintaining connectivity among low-income households, lessening this falling off the network from time to time due to economic issues.”
By the time the Federal Communications Commission launched the ACP, over 23 million households had enrolled. The ACP accepted households at or below 200% of the poverty line, or $60,000 for a family of four. In the wake of the ACP, many local organizations have reverted to distributing Wi-Fi hotspots to keep people connected.
“It almost felt like pulling the rug out from underneath people,” said Gabe Middleton, CEO of Human-I-T, a nonprofit that supplies devices, internet access, and digital-skills training to people on the wrong side of the digital divide. Angela Siefer noted that many local organizations have reverted to strategies used during the pandemic to keep people online. “It’s commendable, but it’s also a Band-Aid.
I’m not saying we don’t appreciate Band-Aids, but it’s another example of why we need real solutions,” Siefer said. “If we start hearing again that folks are figuring out how to put Wi-Fi in parking lots, I might scream.”
Many internet service providers continued providing the $30 discount into July even though they weren’t being reimbursed through the ACP, betting that Congress wouldn’t let funding lapse for more than a month. So far, they’ve lost that bet.
Proponents of the Affordable Connectivity Program argue that the subsidy essentially pays for itself. For every dollar spent on the ACP, the nation’s gross domestic product increases significantly. The Broadband Equity Access and Deployment (BEAD) program, which funds broadband infrastructure, had about half that economic impact.
The abrupt end of the ACP has left millions scrambling to adjust their finances, underscoring the critical need for more balanced approaches to both internet access and affordability. The National Digital Inclusion Alliance (NDIA) has released a list of low-cost internet plans aimed at helping consumers find affordable and reliable broadband options following the termination of the Affordable Connectivity Program. Named the “Honor Roll of Low-Cost Internet Plans,” the list evaluates plans based on various factors including cost, eligibility, speed, data limits, and pricing transparency using the NDIA Grading Internet for Good system.
Providers like AT&T, Comcast Xfinity, Cox Communications, Digital C, and Verizon have plans evaluated as “Good,” “Better,” or “Best” based on an 18-point system that rates standouts in areas such as latency, throttling, and technology types. The NDIA rated plans from Comcast and Digital C the highest among all reviewed. Monthly service costs for these plans range from $9.95 to $30.
Optimum emphasized its goal “to empower and enrich every household through technology by connecting families to education opportunities, information, entertainment, and more” while aiming to “provide affordable internet service to those who need it most.”
Provider plans evaluated include:
– AT&T’s Access plan
– Comcast Xfinity’s Internet Essential Plus, Internet Essentials, Connect Assist Package, and Connect2Compete plans
– Digital C’s Canopy plan
– Human-I-T’s Gold Membership plan
– Optimum’s Advantage Internet plan
– PCs for People’s Bridging the Gap program
– Spectrum’s Internet Assist program
– Starry’s Starry Connect program
– Verizon’s Fios 300, 5G Home, and LTE Home with Forward discount plan
– Xtream’s Xtream Connect plan
Many of these programs require applicants to be active participants in government assistance programs such as Lifeline, Supplemental Nutrition Assistance Program (SNAP), Supplemental Security Income (SSI), National School Lunch Program, tribal-specific programs, or to have been part of the Affordable Connectivity Program. These provisions specifically target low-income families. The NDIA aims to set a standard for ISPs and plans to evaluate more providers in the future.
