Waste of the Day: Congress Wants to Extend Covid-Era Internet Subsidies
Topline: The U.S. government spent $17.2 billion to give “emergency” internet service to 23 million people during the pandemic. The lockdowns are long over, but Congress still wants to invest another $7 billion into the plan.
Key facts: The Affordable Connectivity Program started paying $30 monthly subsidies to 23 million families at the start of 2022 at a cost of $14 billion, following a similar one-year program that cost taxpayers $3.2 billion.
One-fifth of Americans currently qualify for the subsidies.
The Wall Street Journal dubbed it the “Free Netflix Plan” and suggested that it actually increased internet prices because customers have less incentive to try and find the cheapest rate.
Full subsidies ended this April, but a bipartisan group of 230 House members has sponsored a bill that would pour even more money into the program.
That may be a needless expense. The Journal reports that many internet providers don’t expect to lose subscribers even if the subsidies run out because their customers will still be able to afford service.
A recent Federal Communications Commission survey is lacking in transparency about how many Americans actually require internet subsidies.
The FCC’s fact sheet boasts that 77% of subscribers say their internet service would be “disrupted” if the Affordable Connectivity Program ends. But reviewing the survey in more detail reveals that only 16% of subscribers say they’d be completely unable to afford internet service.
The Wall Street Journal also reported that over $3 billion of the federal funds went to just one company, Charter Communications. T-Mobile received the next most with $1.05 billion.
Background: In addition to the subsidies, the 2021 infrastructure law gave broadband providers $42.5 billion in federal money to improve their service and lower their prices to $30 a month — a price point that allowed the Affordable Connectivity Program to provide free internet.
It’s all part of the $90 billion that Congress allocated for President Joe Biden’s “Internet for All” plan, which spans 11 programs across four federal agencies.
These programs have gotten more expensive over time. Previous reporting from OpenTheBooks.com revealed that one initiative to provide internet to rural areas spent $4,700 per household in 2019 but jumped to $18,000 per household in 2023. The price increase meant only half as many families actually benefited from the program.
Summary: The federal government should focus on providing internet to those who absolutely can’t afford it, not those trying to binge their favorite TV show.
The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com
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