End of ACP could bring modfication of FCC Title II rulemaking to allow regulation of residential Internet services

The end of the Affordable Connectivity Act (ACP) sets the stage for the potential modification of the Federal Communication Commission’s recently adopted rulemaking classifying Internet protocol-based services as a common carrier utility under Title II of the Communications Act of 1934. The Biden administration encouraged the FCC to adopt the rulemaking in July 9, 2021 executive order to reverse a 2017 FCC rulemaking that classified IP services as lightly regulated information services under Title I of the statute.

While terming rate regulation “a hallmark of utility regulation,” the FCC’s rulemaking adopted April 25 forbears from giving state public utility commissions authority to regulate rates as they currently do for legacy voice telephone service. But it left the door open to do so in the future. “Although we adopt firm forbearance from all direct rate regulation, with respect to other provisions we forbear from here, we note that it also is within the Commission’s discretion to proceed incrementally,” the rulemaking notes.

The FCC could come under pressure from the White House to regulate rates after Congress rejected the Biden administration’s request to provide additional funding to extend the ACP to provide a $30 monthly subsidy to low-income households and $75 for those on tribal lands. The modification might particularly apply to rates for residential landline delivered services over copper, coaxial cable and fiber in order to reduce low income households' reliance on costly mobile wireless services, referred to as "smartphone dependency."

Such a move might be aimed at scoring points with voters in this election year as President Biden faces a tough re-election bid. It could also occur early in a second Biden term if the president is re-elected in November. Politically, it would align with voter sentiment that their interests have been subordinated to shareholders and lobbyists of large corporations, a "system is rigged against you" theme that was prominent in the 2016 presidential campaigns of Donald Trump and Bernie Sanders.