ACP providers can choose to end benefit to customers or continue in May with partial reimbursement

The Federal Communications Commission's (FCC) Wireline Competition Bureau announced Monday that the last fully funded month for the Affordable Connectivity Program (ACP) will be April 2024 absent additional funding from Congress. Providers may choose to receive a partial ACP reimbursement for May 2024 as determined by the FCC until the program's funds are exhausted.

Partial Reimbursement

The FCC predicts that ACP funds are insufficient to cover May reimbursement claims in full. As a result, May reimbursement claims will be paid on a reduced pro-rata basis. ACP providers have a choice between ending their ACP benefit to customers as of the end of April or continuing in May knowing that they likely would only receive a partial benefit The FCC stated that it will release additional information sometime in March estimating the percentage for partial reimbursements. Companies that continue to provide ACP benefits to customers in May can choose to offer only a partial discount to customers to reduce exposure to a shortfall, but then they will only be able to seek reimbursement for up to the amount of such discount and may only receive reimbursement for a portion of that discount.

May is the last month for which providers are expected to be able to seek any reimbursement.

Required Notices

Providers are required to send out at least two more notices to ACP customers in addition to the first notice that was required to be sent in January. The second notice must be sent by March 19, 2024, and the third notice must coincide with the subscriber's bill for April service because that is the last bill or billing cycle in which the full ACP benefit will be applied.

The second and third notices communicate that the ACP is ending and must contain the following information:

• The date of the last bill in which the full ACP benefit will be applied, i.e., the bill for April;
• The amount that the household will be charged for service once the full ACP benefit is no longer available 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
• A reminder that the subscriber may still change or terminate their service at the end of ACP.

Providers who elect to receive partial reimbursement for May are also required to provide written notice about the partial ACP benefit to subscribers who opted in to continue to receive service after the full ACP benefit is no longer applied. This notice may be sent separately or with one of the other required notices and must state the following:

• The benefit amount applied to the May bill may be less than the full ACP benefit; and
• The household will be subject to the provider's fully undiscounted rates and general terms and conditions after the last bill that any partial benefit is applied.

Providers are not required to send the notice regarding the partial ACP benefit with their second notice. For providers who are still determining whether to seek the partial reimbursement for the May data month, we recommend sending the notice regarding the partial discount sometime after the second notice, with the third notice, or after the second and third notices are sent.

Continued Compliance Obligations

The FCC reminded providers of their continued obligation to comply with the consumer protection requirements regarding transfers, non-payment, and extended service contracts. The FCC specifically notes that the prohibition on charging early termination fees to households who apply their ACP benefit to service plans subject to an extended service contract continues to apply after the ACP ends. This means that providers cannot charge these households early termination fees for terminating a service contract early even after that household stops receiving the ACP benefit.

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