The ACP May End. How Will Brands Respond?
The Affordable Connectivity Program (ACP) is a federal program that delivers $30/mo. credits for qualified lower-income households to receive less-expensive internet. As of February 2024, more than 23M households across the US have signed up for the program.
Since the program’s establishment in 2022, the ACP has become a messaging fixture for internet and wireless providers. Comperemedia Direct data showed that one in 10 telecom direct mail pieces sent in 2023 mentioned the ACP.
However, growing numbers continue to chip away at a dwindling budget. The ACP is expected to run out of funding around April 2024 without Congressional intervention. In response, the FCC is preparing to “wind down” the program by halting new applications on February 7. The Affordable Connectivity Program Extension Act would provide $7B to extend ACP benefits, but it has not passed through either house as of the publication of this article.
Brands such as Charter and Verizon have already begun to reach out to ACP enrollees to let them know their bills may go up in the coming months, as well as directing them to reach out to Congress to advocate for an extension of the program.
Comperemedia predicts with 2024 being an election year and bridging the digital divide being such a key political issue, funding in some form will continue to be available for qualified households. However, with the future of the ACP up in the air, providers are forced to plan for two scenarios: what happens if the ACP’s funding is extended, and what happens if it doesn’t?
Here is how providers will respond in either scenario:
If the ACP remains through 2024…
- After late 2023 hesitation about the future of the program, additional federal funding will give way to renewed provider investment in ACP messaging. The program may not last forever, but providers will want to capitalize on the easy discount messaging while they still can.
- ACP activity will likely peak in Q3 as brands have a chance to respond to renewed funding with reinvigorated messages.
- Cross-sells will be particularly important to target current ACP enrollees and further solidify those relationships across service lines (ie wireless, security).
- The end of 2024 will spur up conversations about transitioning away from the program that started at the beginning of the year, and brands will work on shoring up relationships with lower-income households through perks during the holiday season.
If ACP funding runs out early in 2024…
- Many internet providers will need to overhaul their mid- and lower-funnel creative messages geared at lower-income households.
- Price lock messaging will be key to keeping current customers engaged even as their bills go up.
- Brands will keep lower-tier internet speed plans front and center to attract the attention of customers who are looking for any type of discount in the wake of their billing upheaval.
- Across channels, providers that were heavily invested in ACP connections will work to find other ways to showcase their commitment to bridging the digital divide, most likely through messages of keeping communities connected and informed about what internet option is going to be best for them.
Are you interested in learning more about brand activity surrounding the ACP and its future? Reach out to us to see how you can be prepared.
