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Additional Nelson Mullins Alerts

Jan. 12, 2024

FCC Announces ACP Wind-Down Requirements for Providers and a February 8 Enrollment Freeze

By John J. Heitmann, JD, CIPP/US, Joshua Guyan, Debra McGuire Mercer, Steven A. Augustino

On Jan. 11, 2024, the Federal Communications Commission (FCC) issued an order detailing the wind-down process for the Affordable Connectivity Program (ACP) due to the expectation that funding for the program will run out by May 2024, if Congress does not appropriate additional funding. On Jan. 10, 2024, the Affordable Connectivity Program Extension Act to allocate $7 billion to the ACP was introduced on a bi-cameral and bi-partisan basis; that legislation is pending. 

The wind-down process establishes an enrollment freeze commencing Feb. 8, 2024, and includes timelines and guidance regarding customer notices, ACP claims submission, and advertising and outreach requirements. 

Key Takeaways and Dates

  • FCC projects ACP funding exhaust in May 2024 with April 2024 to be the fast fully funded month (prorated claims may be available to service providers continuing to provide ACP discounted service during the month of May)
  • Last day for new ACP enrollments or re-enrollments is Feb. 7, 2024
  • ACP enrollment freeze begins on Feb 8, 2024
  • ACP subscribers can claim one-time connected device benefits during the enrollment freeze period
  • ACP subscribers can transfer an ACP benefit to any ACP provider electing to accept benefit transfers during the Enrollment Freeze period
  • Providers must send no fewer than three notices to ACP subscribers – the first of which must be delivered by Jan. 25, 2024
  • Expedited service provider claims process starts in February

Summary

Absent Additional Appropriations, When Will the ACP End?

The FCC will announce the end of the ACP approximately 60 days prior to the end of the last fully funded month. The FCC currently projects that April 2024 will be the last fully funded month (with ACP support being paid to ACP providers based on the May 1, 2024 snapshot). If this holds, the FCC’s announcement is expected in late February 2024.  

What is the Last Date that Customers Can Be Enrolled in ACP?

ACP providers may not enroll new subscribers in ACP after Feb. 7, 2024 at 11:59 p.m. EST.  Commencing on Feb. 8, 2024, an enrollment freeze goes into effect.  Subscribers who de-enroll or are de-enrolled (e.g., for non-usage or for failure to pass reverification) during the enrollment freeze period will not be able to re-enroll in ACP during the enrollment freeze period.

Note that the FCC and the Universal Service Administrative Company will stop reviewing new ACP provider applications and election notices Feb. 7, 2024 at 6:00 p.m. EST.

Can Consumers Transfer Their ACP Benefits to Another Provider During the Enrollment Freeze Period?

Yes. During the enrollment freeze period, consumers may transfer their benefit to another provider, subject to existing limits and exceptions. ACP providers may, but are not required to, accept ACP customers who seek to transfer their ACP benefit to the provider. 

Can Consumers Purchase an ACP-Supported Connected Device During the Enrollment Freeze Period?

Yes. During the enrollment freeze period, consumers eligible for a one-time connected device benefit may purchase one and the provider may seek reimbursement.

How Will ACP Customers Be Notified About the Potential for the ACP Ending?

ACP providers must notify their customers about the impact of the end of the ACP by sending at least three notices:

  • First Notice. By Jan. 25, 2024, providers must advise ACP households about the possibility of program termination and the potential impact on their broadband service and bills.
  • Second Notice. Within 15 days of the FCC’s announcement of ACP end (approximately late February 2024), providers must advise:
    • that the ACP is ending;
    • the date of the last bill on which the full ACP benefit will be applied;
    • the amount that the household will be billed for the service once the full ACP benefit is no longer available and/or that the household will be subject to the provider’s undiscounted rates and general terms and conditions after the end of the ACP; and
    • that ACP households may change service and/or opt out of continuing their service at the end of the ACP. 
  • Third Notice. Concurrent with the last bill or billing cycle for which the full ACP benefit will be available, providers must send a notice meeting the same criteria set forth for the second notice.

The FCC recommends but does not require, notices to include information on lower cost offerings and low-income programs or a phone number or link to a website where ACP households may obtain such information.

Notices must be in writing and accessible to persons with disabilities.  ACP providers may send notices in a format (email, text, mail) consistent with methods normally used to communicate with customers or consistent with consumer expressed preferences.

What Are the Requirements for Customers to Continue to Receive Service After the End of ACP?

ACP providers must establish a customer’s willingness and ability to pay for broadband service. This requirement is met when an ACP consumer (1) has informed the provider, either orally or in writing, that the provider may continue providing broadband service after the end of the ACP and to charge a rate higher than the ACP rate; (2) was an existing paying internet service customers with the provider at the time of enrollment; or (3) currently pays a fee for their ACP-supported broadband service. If none of the foregoing requirements are met, an ACP provider must obtain an opt-in form before charging a customer a rate higher than the ACP rate.

Are ACP Providers Required to Continue to Advertise and Promote the ACP?

During the enrollment freeze period, ACP providers are not required to publicize the availability of the ACP, notify new internet service consumers (or those who renew a subscription) about the ACP or conduct public awareness campaigns.

How Does the Provider Claims Process Change During the Wind-Down Period?

Starting with the Feb. 1, 2024 snapshot, ACP providers must submit their claims (including claims and upward revisions for preceding months) by no later than the 1st of the second month after the snapshot date. For example, all claims and upward revisions for the February 1 snapshot date, as well as claims and upward revisions for preceding months, must be submitted no later than April 1, 2024.  Downward revisions will continue to be accepted. The FCC encourages providers to submit any remaining outstanding claims for reimbursement or revisions prior to Feb. 1, 2024. 

How Will ACP Providers Be Paid If Claims During the Final Month of the ACP Exceed Available Funds?

If claims exceed available ACP funds during the last month of the program, ACP providers will be paid on a reduced pro-rata basis. The FCC intends that ACP providers will receive prior notice regarding the availability of only a partial payment for the final month of the ACP and the anticipated pro-rata percentage. ACP providers may opt to forego providing ACP service and receiving partial payment after the last fully funded month. The FCC will provide future guidance to ACP providers regarding notifying USAC of their intention to participate in the ACP in the event that the final month of the ACP is only partially funded.

If you have questions about the Order or this Advisory please contact any of the authors or your regular Nelson Mullins contact.

John Heitmann is a leading advocate for mobile wireless service providers participating in the Federal Communications Commission (FCC) administered ACP and Lifeline programs. He also counsels international and domestic entities ranging from start-ups to industry giants on regulatory strategy involving new business models and product offerings, policy, and compliance at the federal and state levels.

Josh Guyan advises providers of wireline, wireless, Voice over Internet Protocol, and satellite services on domestic and international compliance and licensing, as well as Universal Service Fund (USF) requirements. He also advocates on behalf of clients at the FCC, before state commissions, and on Capitol Hill.

Debra McGuire Mercer focuses her practice on communications and technology regulation. She represents clients in adjudicatory, enforcement and rulemaking proceedings before the Federal Communications Commission and state public utility commissions and advises clients on compliance, licensing, market entry, and transactions.

Steve Augustino’s practice ranges from regulatory, legislative, and administrative law counsel to transactional advice, advocacy, and litigation. His practice focuses on USF contributions, E-rate, and Universal Service audits and investigations. He also is a leading practitioner in anti-robocall technologies and Telephone Consumer Protection Act (TCPA) matters. For over 25 years, he has guided clients through shifting policies, exponential growth, and extraordinary innovation in the telecommunications industry.