Millions may lose federal subsidies

WASHINGTON — Phyllis Jackson, a retired administrative assistant in Monroeville, Pa., signed up for home internet service for the first time in about two decades early last year. She now regularly uses the internet to pay her bills online, buy clothes, find new recipes and learn about her medication.

Jackson said she signed up for internet service after enrolling in a federal program that provided a monthly discount for low-income households. That program is set to run out of funding this spring, however, which will make it harder for Jackson and millions of other households to afford to stay connected to the internet.

“I really can’t do without it,” said Jackson, 79. “The way things are today, everyone needs to be able to use the computer.”

The $14.2 billion Affordable Connectivity Program provides low-income households up to $30 off their internet bill each month, and households living on eligible tribal lands can receive a discount of up to $75 a month. More than 23 million households receive either reduced bills or effectively free internet service through the program.

But federal officials began winding down the program early last month, when they stopped accepting new applications and enrollments. The program was tucked into the 2021 infrastructure law as a replacement for a pandemic-era program that provided certain households discounts on their internet bills. Although there is bipartisan support to continue the subsidies, lawmakers have not passed an extension.

Participants will continue receiving full benefits through April, according to the Federal Communications Commission. In May, internet companies will have the option to provide them with partial discounts using the remaining federal funding. Based on provider claims data as of Feb. 15, the program had about $2.5 billion left, which is meant to cover the subsidies and other program expenses.

The program is part of the Biden administration’s broader initiative to connect every American to affordable, high-speed internet, which officials hope will stimulate economic growth and widen access to health care and education. The administration is spending an additional $42.5 billion to expand access to broadband across the country.

The administration is funneling billions of dollars into the expansion of internet access largely because officials see it as a critical way to strengthen the economy.

Across U.S. metros, prime-age workers who have access to high-speed internet on home computers participate in the labor force at a much higher rate than those without access, according to research from the Federal Reserve Bank of Philadelphia.

Other research has found internet connectivity can bolster economic growth in rural areas, helping create jobs and attract workers.