SD delegation has concerns about extension of internet subsidy program

Affordable Connectivity Program factors into South Dakota broadband goals

By: - December 29, 2023 11:00 am
Sen. John Thune, Sen. Mike Rounds and Rep. Dusty Johnson attend a forum at Dakotafest in Mitchell on Aug. 16, 2023. (Joshua Haiar/South Dakota Searchlight)

Sen. John Thune, Sen. Mike Rounds and Rep. Dusty Johnson attend a forum at Dakotafest in Mitchell on Aug. 16, 2023. (Joshua Haiar/South Dakota Searchlight)

If Congress renews funding for a program that helps low-income people pay their internet bills — a program South Dakota hopes to lean on to connect more homes to broadband in the coming years — it won’t be the result of vigorous advocacy from the state’s congressional delegation.

Sen. John Thune, the ranking member of the Subcommittee on Communications, Media, and Broadband, is among the GOP leaders concerned about haphazard management, waste and fraud potential in the Affordable Connectivity Program.

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This story is one of two exploring South Dakota’s plans to improve usage of the Affordable Connectivity Program. The companion article examines the state’s low usage rate and plans to improve it.

Most damningly, according to Thune and others who’ve demanded accountability on the issue from the Federal Communications Commission (FCC), the vast majority of the program’s subsidy dollars flow to families who’d paid for broadband without its help before signing up. 

The Affordable Connectivity Program, which replaced a similar but more generous pandemic-era program in 2021, offers $30 a month to eligible households to help cover broadband bills. Qualifying households on tribal lands can get up to $75 a month. 

The program will run out of funding in April unless Congress takes action. The outcome of that congressional decision — or lack thereof — will affect the way South Dakota rolls out its digital opportunity plan, which serves as a five-year roadmap for addressing internet access and digital literacy in the state more broadly. 

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The plan will help federal officials decide how many dollars from a separate pool of federal money will flow to South Dakota during that five-year period. Improving South Dakota residents’ use of the soon-to-be-exhausted Affordable Connectivity Program dollars is one pillar of the state plan. Depending on federal funding, the digital opportunity plan could also see the state adding more public Internet terminals, offering digital literacy courses or delivering new or used devices to some segments of South Dakota’s population.

Funding for those initiatives is separate from the Affordable Connectivity Program, but scrapping the latter would leave South Dakota and other states with one less tool for addressing connectivity for their citizens.

One possible pathway to improving South Dakota’s 49th-in-the-nation ranking for connectivity program use could involve “enrollment events” meant to allow signups en masse in the months and years ahead, according to the state’s digital opportunity plan.

“…  the State hopes ACP will be extended to continue supporting South Dakotans. However, without such a program, hosting enrollment events will no longer be relevant,” the plan reads.


GOP: Subsidies poorly targeted, monitored

Questions about the Affordable Connectivity Program in some quarters of the GOP came to a head for Thune’s camp on Dec. 15, just one day after the South Dakota Department of Labor and Regulation submitted its digital opportunity plan to the federal government. 

That’s the day Thune issued a joint press release with Sen. Ted Cruz, R-Texas, Rep. Cathy McMorris Rogers, R-Washington, and Rep. Bob Latta, R-Ohio, demanding that FCC Chair Jessica Rosenworcel retract and correct statements delivered to Congress late last month.

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“We have come so far, we can’t go back,” Rosenworcel testified on Nov. 30. “We need Congress to continue to fund this program. If Congress does not, in April of next year, we’ll have to unplug households and, based on current projections, it’ll be about 25 million households we will unplug from the internet in April.”

But the joint GOP press release, which accompanied a letter to Rosenworcel, said that only about 1-in-5 program participants lacked broadband internet access before getting the subsidy, according to the FCC’s own surveys

“While you have repeatedly claimed that the ACP is necessary for connecting participating households to the internet, it appears the vast majority of tax dollars have gone to households that already had broadband prior to the subsidy,” the letter says.

The same group of lawmakers successfully pushed for program reviews by the U.S. Government Accountability Office and the FCC’s Office of Inspector General. The reviews found that, among other issues, the COVID-era precursor to the Affordable Connectivity Program “did not prioritize unconnected households,” and that the FCC did not adequately address that issue when the new program took effect in 2021.

Thune’s concerns about the subsidies are not shared by all Republicans, however. 

In November, a bipartisan group of governors inked a letter to House and Senate leadership urging them to renew the funding. It called the program “a critical complement to our collective efforts to expand access to broadband infrastructure in rural, unserved communities across the country,” and asserted, as Rosenworcel did, that people “could lose connectivity as well as all the essential services that come with it” if Congress fails to act. South Dakota Gov. Kristi Noem was not among the signatories of that letter.

The governors’ letter, pointing to a report from a nonprofit organization called Common Sense Media, says that the program’s value extends beyond simply connecting previously unconnected households.

The program “reduces the subsidy needed to incentivize providers to build in rural regions by 25% per household, ensuring that taxpayer dollars are used to their maximum potential,” it says.

“Closing our nation’s digital divide transcends politics,” it continues. “Whether you live in a rural area, a suburb, or a city, every American needs access to high-speed internet. Preserving the ACP will allow us to build upon the progress we’ve made in expanding connectivity rather than falling behind in a mission we cannot afford to lose.”

Gov. Noem did not sign that letter, even though her state’s digital opportunity plan expressed support for a funding extension one month after it was sent.

When asked directly if the governor wants the connectivity plan to continue, spokesperson Ian Fury said via email that he agrees with statements sent by the Department of Labor last week. Those statements outlined the state’s efforts to connect families to the program, but did not take a position on its extension.

Rounds, Johnson share concerns, open to ideas

The ultimate fate of future funding for the program remains unclear in the face of the concerns of senators like Thune and Cruz. Thune has long backed connectivity and broadband expansion in rural areas, but sees better options than the connectivity program.

He’s part of a bipartisan working group, for example, studying the possibility of expanding access through the Universal Service Fund, which is paid for through contributions from telecom providers, which pass fees along to consumers.

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“Universal service is a bipartisan principle that has been the bedrock of our nation’s communications policies for nearly 90 years, and programs that efficiently and effectively strengthen its underlying goal have contributed to advancements in health care, education, and economic development,” Thune said in a May press release.

Thune has been the most vocal South Dakotan in Washington in his concerns about the soon-to-expire connectivity program, but the other two members of South Dakota’s all-GOP congressional delegation share them.

An emailed statement from Rep. Dusty Johnson says that he sees broadband access as important and worthy of support, but that perhaps existing programs represent more time-tested and reliable ways for the federal government to preserve it for low-income households.

Johnson pointed specifically to the Lifeline program, which has offered telecom subsidies since 1985. In recent years, Lifeline’s income-based financial support for telephone services has expanded to cover assistance with monthly broadband bills, at $9.95 per month. 

Thune has also expressed concerns about Lifeline, which has been subject to scrutiny on multiple occasions over the years. An income verification requirement for Lifeline users was implemented in 2012; Former FCC Chair Ajit Pai moved to rein in its budget in 2017.

Even so, Johnson said that program may offer better accountability and fealty to goals like maintaining broadband access for the vulnerable.

“I have some concerns with how the Affordable Connectivity Program has been funded and administered,” Johnson said. “I’m not opposed to helping lower income Americans stay connected, though. Congress’ time would be better spent reforming Lifeline, a very similar program, which has provided support to millions of Americans for decades.”

Rounds largely echoed Johnson in his emailed response to South Dakota Searchlight. He said that “sound, reliable internet service is a vital component of nearly everything we do in today’s world,” but that Congress must provide oversight for subsidy program.

“The questions raised by Sen. Thune and others are important, and we intend on carefully reviewing the response from Chairwoman Rosenworcel,” Rounds said.

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John Hult
John Hult

John is the senior reporter for South Dakota Searchlight. He has more than 15 years experience covering criminal justice, the environment and public affairs in South Dakota, including more than a decade at the Sioux Falls Argus Leader.