ISPs must accept gov’t subsidy on all plans—no more upselling, FCC chair says
2022 01 10
Less than a year after Verizon and other ISPs forced users to switch plans in order to get government-funded discounts, a new federal program will prevent such upselling by requiring ISPs to let customers obtain subsidies on any Internet plan.
With last year’s $50-per-month Emergency Broadband Benefit that was created by Congress, the Federal Communications Commission let ISPs participate in the program as long as they offered the discount on at least one service plan. The FCC said it did so to encourage participation by providers, but some major ISPs drastically limited the subsidy-eligible plans—forcing users to switch to plans that could be more expensive in order to get a temporary discount.
Congress subsequently created a replacement program that will offer $30 monthly subsidies to people with low incomes. The program also specified that ISPs “shall allow an eligible household to apply the affordable connectivity benefit to any Internet service offering of the participating provider at the same terms available to households that are not eligible households.” The FCC still has to make rules for implementing the new Affordable Connectivity Program (ACP), but that requirement prevented the FCC from using the same one-plan rule that helped ISPs use the program as an upselling opportunity.
ISPs urged FCC to exclude “legacy” plans
Despite that, there was still a question of whether the FCC would define “any Internet service offering” to include legacy and grandfathered plans that are no longer offered to new customers. ISPs urged the FCC to let them exclude legacy or grandfathered plans from the subsidy-eligible offerings—such as requests from AT&T, Verizon, Frontier, Dish, the cable lobby group NCTA, and telco lobby group USTelecom.
The FCC is now on track to reject those requests under draft rules released by Chairwoman Jessica Rosenworcel on Friday. Although many ISPs “expressed concern at the extensive technical challenges necessary to include legacy and grandfathered plans,” the FCC draft rules “conclude that any Internet service offering means, for a particular customer, any broadband Internet plan in which the customer is currently enrolled (regardless of whether it is a legacy grandfathered plan), as well as any broadband Internet plan that a provider currently offers to new customers.”
The draft also says:
[W]e find that the purpose of this provision is to ensure that the eligible households are permitted to apply the affordable connectivity benefit to currently offered plans that are available to non-eligible households, such that eligible households are not limited to choosing from a subset of plans or restricted in some way for such plans. We also do not think that Congress intended to exclude consumers on existing legacy or grandfathered plans from participating in the Affordable Connectivity Program. We further clarify that the requirement that legacy or grandfathered plans be eligible for reimbursement does not require that providers offer such legacy or grandfathered plans to other customers, including ACP-eligible customers, that are not already on such plans.
Rosenworcel’s plan gives ISPs 60 days after publication of the order in the Federal Register to “ensure that the affordable connectivity benefit can be applied to all generally available and currently sold plans” and to “accommodate requests by existing subscribers to apply the affordable connectivity benefit to legacy or grandfathered plans on a case-by-case basis.”