A Preliminary Evaluation of the ACP Program

Abstract

The Affordable Connectivity Program (ACP) is a means-tested federal program launched in January 2022 to support broadband connectivity among low-income households in the wake of the COVID-19 pandemic. The expiration of the ACP benefit, the largest ever consumer support program for telecommunication services in U.S. history, invites a discussion about the impact of the program and what alternative policy mechanisms exist to promote equitable access to broadband.
Conceptually, this study distinguishes two types of program impact. First, it examines the more immediate goal of the ACP program, namely, to promote and help sustain broadband access among vulnerable households. Second, the study probes for broader socioeconomic impacts related to labor market outcomes.

Our primary hypothesis is that the more favorable labor market outcomes observed for eligible individuals are related to increased remote work opportunities, and that these effects will be stronger among female than male workers. We hypothesize that the massive expansion of hybrid work arrangements that followed the pandemic is a key explanatory factor for this trend, and that ACP expanded labor opportunities for women who otherwise would have more limited labor market prospects due affordability constraints in broadband access.

The empirical challenge involved in evaluating the impact of the ACP program is well understood, and involves identifying a suitable counterfactual. We address this challenge in different ways. In the first set of model specifications, we compare outcomes for eligible individuals to those for ineligible individuals before and after the introduction of ACP within a narrow household income bandwidth. In a second set of estimates, we implement a semiparametric estimation of causal effects by modeling the propensity of individuals to enroll in the program, and adjusting our regression results accordingly.

The results largely confirm our working hypothesis. Overall, eligible individuals are more likely to have home broadband than comparable ineligible individuals, with stronger effects for having any type of Internet connection than for having high-speed (wireline) broadband. Positive impacts on labor force participation and employment are observed for women (but not men), and the effect appears to be driven by an increase in remote work arrangements. Broadly speaking, the results suggest that the positive impact of ACP goes beyond first-order effects on adoption, as the program helped lower-income workers adapt to the expansion of non-traditional labor arrangements in the aftermath of the pandemic.

Keywords: Broadband subsidies, Impact evaluation, Affordable Internet, Female labor force participation