Commonwealth Digital Affordability and Cost Effectiveness Plan (Senate Document No. 9)
Summary
Report of the Virginia Department of Housing and Community Development, Office of Broadband, to the Governor and the General Assembly of Virginia, Senate Document No. 9, dated December 1, 2022. The Commonwealth Digital Affordability and Cost Effectiveness Plan will be used by the department to access funds for broadband access, affordability and adoption under the Infrastructure Investment and Jobs Act. Its findings state that enrollment in the Affordable Connectivity Program in Virginia is at 27%, lower than the national average, and that qualifying households are missing out on over $24.5 million monthly. The recommendations include an outreach strategy through a Federal Communications Commission Outreach Grant application.
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“Commonwealth Digital Affordability and Cost Effectiveness Plan (Senate Document No. 9).”
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REPORT OF THE VIRGINIA DEPARMENT OF
HOUSING AND COMMUNITY DEVELOPMENT
Commonwealth Digital
Affordability and Cost
Effectiveness Plan
(Chapter 519, 2022)
TO THE GOVERNOR AND
THE GENERAL ASSEMBLY OF VIRGINIA
SENATE DOCUMENT NO. 9
COMMONWEALTH OF VIRGINIA
RICHMOND
2022
Commonwealth Digital Affordability and Cost Effectiveness Plan
Department of Housing and Community Development
Office of Broadband
December 1, 2022
1
Table of Contents
Executive Summary 2
Currently Available Affordable Broadband Options 3
Affordable Connectivity Program Analysis 5
Leveraging Federal Funds to Address Broadband Affordability 8
Recommendations for Establishing a Broadband Affordability Program 10
Appendices 11
2
Executive Summary
This document is the Commonwealth’s Digital Affordability and Cost Effectiveness Plan1. This
Plan was developed by the Department of Housing and Community Development (DHCD) and
will be used by DHCD to access funds for broadband access, affordability, and adoption under
the Infrastructure Investment and Jobs Act (IIJA). Specifically, this Plan includes:
A summary of existing options for affordable broadband in the Commonwealth;
An overview of the Affordable Connectivity Program (ACP) – the $30/month subsidy for
broadband services - at the federal level and it’s progress in Virginia;
Examples of successful affordability programs and initiatives; and,
Recommendations to address the affordability of broadband services.
Findings
DHCD identified several key takeaways in the course of developing this Plan:
1. Enrollment in the ACP in Virginia is at 27%, which is lower than the national average and
several neighboring states. In total, qualifying Virginia households are missing out on
over $24.5 million monthly through this program.
2. ACP enrollment varies widely by locality across the Commonwealth, with urban localities
significantly outperforming rural areas. Regional disparities in Virginia demonstrate the
need for a targeted approach to boost enrollment.
3. Virginia’s largest broadband providers offer a low-cost service option, many small-to-mid
size providers do not offer these affordable service options fully coverable by ACP.
Recommendations
The following recommendations address how the Commonwealth can proceed to tackle the
issue of broadband affordability.
1. This Plan will lead into DHCD’s development of the Commonwealth Digital Opportunity
Plan that will study and develop solutions for gaps in broadband affordability and
adoption.
2. Direct DHCD to implement an ACP outreach strategy via a Federal Communications
Commission Outreach Grant application and partnerships with outside entities.
1 This Plan was formed pursuant to Chapters 518 and 519, passed in the 2022 General Assembly Session I
3
Legislative History
The General Assembly directed the Department to develop a plan to address the affordability of
broadband in the Commonwealth. Through legislation, the Department was directed to apply for
a planning grant from the National Telecommunications and Information Administration (NTIA)
to access funding under the federal Infrastructure Investment and Jobs Act. The General
Assembly directed the Department to include the following elements in the Commonwealth
Digital Affordability and Cost Effectiveness Plan:
I. An overview of options for affordable broadband connectivity in the Commonwealth;
II. Recommendations on how best to leverage federal grants addressing broadband
affordability;
III. Best practices for establishing a broadband affordability program, taking into account
existing federal funds and programs;
IV. Recommendations for public outreach, with consideration of the report submitted by the
Department of Social Services
Acknowledgements
In order to study this issue, the Department solicited feedback from various stakeholders,
including representatives from industry and their associations, and representatives from local
governments across the Commonwealth. The Department acknowledges and appreciates the
contributions of stakeholders to this Plan.
Currently Available Affordable Broadband Options
Internet Service Provider Programs
There are a number of existing affordable internet service plans offered by internet service
providers (ISPs) in the Commonwealth. The service areas in which these programs are
available cover a significant segment of the low-to-moderate income population in Virginia. The
following are examples of the qualified-offer plans made available by ISPs in Virginia:
Charter Communications Spectrum Internet Assist: A low cost internet plan for recipients of
some assistance programs, including the National School Lunch Program (NSLP), the
Community Eligibility Provision of the NSLP, or Supplemental Security Income (SSI) for
applicants age 65+. The program offers a 30mbps plan with no data caps or contracts available.
With the ACP subsidy this plan is free to the consumer.
Comcast Xfinity Internet Essentials & Internet Essentials Plus: Low-cost internet plans for
individuals or families participating in government assistance programs such as the NSLP,
housing assistance, Medicaid, SNAP, SSI, Federal Pell Grant, and others. The Internet
Essentials baseline plan provides 50 Mbps/10 Mbps broadband for $9.95/month, with free
equipment and without an annual commitment requirement. Internet Essentials Plus provides
100 Mbps/10 Mbps broadband for $29.95/month, still without activation fees or equipment rental
fees. With the ACP benefit, this plan is free to the consumer.
4
Cox Connect2Compete and ConnectAssist: A low-cost internet plan for families with K-12
students. The qualified offer plan is $9.95/month, and includes a Wi-Fi modem capable of
connecting up to 5 devices at once. This offer is restricted to families participating in a
government assistance program with at least one K-12 student. Cox ConnectAssist is a
$30/month plan with up to 100mbps download, free Wi-Fi modem rental, and no data cap for 12
months. Households that participate in an income-based government assistance program are
eligible for ConnectAssist.
T-Mobile Project 10Million: Provides mobile hotspots with 100GB of free data to National
School Lunch Program eligible students. The program is administered through schools, who
distribute hotspot devices to eligible students. Schools or households can also purchase
devices at-cost from T-Mobile.
Verizon FiOS Forward: FiOS Forward offers a free FiOS plan for Affordable Connectivity
Program beneficiaries. Verizon offers a combination of a discount on Verizon FiOS with the
ACP discount to offer free 300mbps/300mbps FiOS fiber internet service.
Government-Led Efforts
There are currently two broadband subsidy programs at the federal level, the Affordable
Connectivity Program (ACP) and Lifeline.
Affordable Connectivity Program
About the ACP
The primary broadband affordability initiative at the federal level is the Affordable Connectivity
Program (ACP), a $14 billion program that provides a discount on internet service to eligible
households. The ACP replaced the COVID-19 Emergency Broadband Benefit Program in
December, 2021. ACP-eligible households can receive a discount up to $30/month, or
$70/month on Tribal lands, towards the internet service package of their choice.
Eligibility
ACP eligibility is determined by a variety of factors, including household income, and
participation in certain government assistance programs. For applicants who reside on
qualifying Tribal lands, household income and participation in Tribal assistance programs qualify
households for the $70 benefit. Additionally, qualification for the ACP can be achieved by any
member of a household, including a child or dependent who meets the eligibility criteria. A
complete description of eligibility criteria and the application process can be found on the
Affordable Connectivity Program website.2
2
https://www.affordableconnectivity.gov
5
Lifeline Program
Lifeline is a federal program dedicated to making phone and internet service more affordable for
low-income households. This benefit provides eligible consumers with a monthly discount of up
to $9.25. Consumers living on Tribal lands are eligible for an enhanced discount of up to $34.25
per month.3 Eligibility for Lifeline is determined by income and/or participation in government
assistance programs. Households with income less than 135% of the Federal Poverty Guideline
are eligible under the income provision. Recipients of the FCC’s Lifeline benefit program are
also automatically eligible for the ACP, and both benefits can be received simultaneously.
Additional Federal Initiatives
Participating Providers with Free-to-Consumer Plans
In May of 2022, at the request of the Biden-Harris administration, many ACP participating
providers elected to offer $30/month high-speed internet plans without fees, data caps, or
hidden additional costs.4 This effectively provides a no-cost internet service option to ACP-
eligible households in the service areas of participating providers, should recipients elect to
subscribe to it. The ACP benefit can also be used to subsidize the cost of a more expensive
plan should recipients identify a service plan that better fits their needs. The following are some
ACP-participating ISPs in Virginia that provide a no-cost to customer option equal to or less than
$30/month.
● Comcast
● Cox Communications
● Spectrum (Charter Communications)
● Verizon
● ZiTel
● Brightspeed
There are currently 90 internet service providers in the Commonwealth that participate in the
Affordable Connectivity Plan. A full list of participating providers can be found in the appendices
under Appendix B.
Affordable Connectivity Program Analysis
National Context
Program Details
The ACP was officially launched by the FCC in December, 2021 to replace the Emergency
Broadband Benefit established under COVID relief legislation. Enacted under the Infrastructure
3
https://www.lifelinesupport.org/get-started/
4
https://www.whitehouse.gov/briefing-room/statements-releases/2022/05/09/fact-sheet-president-biden-
and-vice-president-harris-reduce-high-speed-internet-costs-for-millions-of-
americans/#:~:text=To%20make%20the%20most%20of,no%20more%20than%20%2430%2Fmonth.
6
Investment and Jobs Act (IIJA), the ACP has a $14.2 billion fund. Funds are distributed directly
from the Universal Service Administrative Company, (USAC) the administering body of the
Program under the direction of the FCC), to participating service providers to reimburse them for
credits received by eligible users.
ACP Utilization Analysis
As of November, there are nearly 15 million households enrolled in the ACP.5 Unfortunately,
there are no official figures on the number of eligible households in the US. Given both the
range of eligibility criteria and the various ways households can qualify for the Program,
estimates of ACP eligible households vary. Expert6 estimates put the number of eligible
households in the U.S. at around 48 million, or roughly 40% of all households in the nation. This
means that approximately 30% of estimated eligible households have enrolled in the Program.
Concerns Regarding the ACP
There are three primary concerns with respect to the Program’s effectiveness nationally and in
Virginia: outreach, use of benefits for broadband, and the longevity of the program.
1. ACP Outreach: Enrollment rates remain relatively low nationally, with less than a third of
estimated eligible households enrolled in the program. To this end, the FCC has made
available grants for outreach efforts at the state and local level.
2. Service Type: USAC data on enrolled ACP subscribers by service type shows that
60.4% of enrolled households use their benefit for mobile cellphone service as opposed
to fixed broadband.7 While still a net positive, internet via cellular service is not as stable
or effective a solution for addressing the digital divide as broadband. The share of lower
income Americans for whom a smartphone is the only method of getting online has more
than doubled since 2013.8
3. Long-term Viability: The ACP’s $14.2 billion fund is depleting by more than $350 million
each month, an amount that increases as households sign up for the program. At its
current growth rate and absent Congressional action, the fund will be depleted sometime
in 2025.9
Program Sustainability
Congressional action will be required to supplement, replenish, or make permanent the ACP’s
$14.2 billion fund. If or when the fund is exhausted, beneficiaries will see their monthly internet
bills increase by $30 (or $70 for Tribal enrollees), which may result in some participating
5
https://www.usac.org/about/affordable-connectivity-program/acp-enrollment-and-claims-tracker/
6
https://www.whitehouse.gov/briefing-room/statements-releases/2022/07/21/fact-sheet-vice-president-
harris-highlights-milestone-of-1-million-new-participants-on-reducing-high-speed-internet-cost-for-
americans/
7
https://www.usac.org/about/affordable-connectivity-program/acp-enrollment-and-claims-
tracker/additional-acp-data/
8
https://www.pewresearch.org/fact-tank/2021/06/22/digital-divide-persists-even-as-americans-with-lower-
incomes-make-gains-in-tech-adoption/
9
https://muninetworks.org/content/fate-affordable-connectivity-program
7
households canceling their internet or mobile phone service. Projections of possible ACP
depletion scenarios estimate that the program’s fund will be fully depleted sometime between
March 2024 and February 2025, depending on enrollment growth rate.10
ACP Utilization in Virginia
Overview
While there are not official figures on the number of ACP eligible households by state or
nationally, the Department estimates that Virginia’s total number of eligible households is in the
range of 1.047 to 1.1 million households. Virginia’s estimated ACP enrollment rate among
eligible households (using the larger of the two estimates) is 27%, below the national average.
Potential Benefits of Maximum Utilization
As of November 2022, 282,193 households in Virginia have enrolled in the ACP, meaning
Virginians are receiving at least $8.45 million in subsidies monthly towards the cost of their
broadband services, not factoring for possible $70 monthly benefits for Tribal beneficiaries.
However, with up to 817,807 Virginia households not enrolled, Virginia is missing out on over
$24.5 million per month in federal subsidy funds.
Regional Disparities in Enrollment
10
https://acpdashboard.com/
8
A locality-level analysis conducted by the Department revealed unequal rates of enrollment
across the Commonwealth; ACP enrollment among eligible households appears to be
significantly higher in urban areas, while rural areas generally lag in participation. The results of
this analysis, including estimated enrollment rates by locality, can be found in the appendices
under Appendix C. The above map visualizes the results of the Department’s ACP locality
eligibility estimates.
Regional Context
Compared to other Mid-Atlantic States, the Commonwealth of Virginia is in the middle of the
pack with respect to ACP enrollment figures. The table below shows estimated enrollment rates
as of November for neighboring states and the District of Columbia. North Carolina, Kentucky,
and the District of Columbia are all outpacing Virginia with estimated enrollment rates that
exceed the national average.
State/District Estimated Enrollment
Washington, District of Columbia 43.08%
Kentucky 37.21%
North Carolina 36.20%
National Average 30%
Virginia 27%
Tennessee 26.34%
Maryland 24.13%
West Virginia 23.15%
Leveraging Federal Funds to Address Broadband Affordability
State/Local Broadband Affordability Best Practices
CARES Act
In 2020, the Commonwealth of Virginia allocated $30 million in CARES Act funding for
broadband projects. Two projects located in the Cities of Hopewell and Portsmouth focused on
addressing affordability.
1. City of Portsmouth: The City of Portsmouth in partnership with the Portsmouth
Broadband Authority was awarded $750,000 in grant funding to construct a wireless
mesh network for 1,065 public housing units. The project included several additional
public Wi-Fi hotspots and a total of 173 access points.
2. City of Hopewell: The City of Hopewell in partnership with TPx Communications was
awarded $3.95 million to construct a free public Wi-Fi network for 747 subsidized and
9
affordable housing units. The project included 8 miles of fiber with 250 access points
throughout the city.
Broadband Affordability Offices
The County of Albemarle’s Broadband Accessibility and Affordability Office (BAAO) is unique in
the Commonwealth, and exemplifies a potential route of incorporating affordability into the
prerogatives of a broadband office. Albemarle's BAAO “seeks to ensure that Albemarle County
residents of all means have access to adequate and affordable broadband service.”11 The Office
has pioneered two affordability programs within the County using local funds:
1. Comcast Internet Essentials Partnership Program: A partnership with Comcast
allows Albemarle County to provide a no-cost broadband service to eligible residents in
the ISP’s service area. Comcast provides their existing Internet Essentials plan while
Albemarle County covers the difference for the household. Program-eligible populations
include households with a social service beneficiary, students eligible for the National
School Lunch Program, and college students receiving a Pell grant.
2. Affordable Connectivity Program Bridge: The County’s ACP Bridge program provides
an additional $20/month supplement to the ACP benefit, covering some or all of the cost
of monthly charges beyond the ACP’s $30/month. With this additional benefit, eligible
households in Albemarle may receive no-cost service, while others may be able to
upgrade to more expensive plans that better suit their needs.
Commonwealth’s VATI Investments Impact on Affordability
The Department of Housing and Community Development’s Virginia Telecommunication
Initiative (VATI) has been a force in impacting broadband affordability in the Commonwealth. An
analysis from highspeedinternet.com found the Commonwealth has the 5th highest cost per
Megabits per second at introductory internet service package levels. VATI projects awarded in
the FY2022 round alone would rank 3rd lowest cost per Megabit per second among all states.
The lowest cost plans among VATI projects on average provide service for $1.10 per megabit
per second (Mbps), $5.64 cheaper than what the estimated average cost of internet in the
Commonwealth was in 2020.12
11
https://www.albemarle.org/government/county-executive/broadband-accessibility-and-affordability-
office
12
https://www.highspeedinternet.com/resources/state-cost-of-internet
10
Recommendations for Establishing a Broadband Affordability Program
Recommendation 1: Develop comprehensive strategic plan for utilizing funds for broadband
access, affordability and adoption programs from the Infrastructure Investment and Jobs Act
The Commonwealth is committed to ensuring that every Virginian has access to affordable,
reliable, high speed internet. As the designated administering entity for the Digital Equity Act
and the Broadband Equity, Access and Deployment (BEAD) programs established by the
Infrastructure Investment and Jobs Act, DHCD shall leverage the State Digital Equity planning
grants funds awarded to the Commonwealth on October 1, 2022 by NTIA to develop the
Commonwealth’s Digital Opportunity Plan. The plan will include a detailed assessment of
access, affordability, and adoption of broadband and provide findings and recommendations to
the Broadband Advisory Council on utilizing the forthcoming BEAD funding to address
affordability, as well as adoption.13
Recommendation 2: Implement Statewide ACP Outreach Strategy
Direct the Department to apply for the Federal Communications Commission’s Affordable
Connectivity Program (ACP) Outreach Grant and implement a statewide ACP outreach program
in partnership with outside entities. These grant funds will be used to conduct ACP outreach in
communities across the Commonwealth, with the ultimate goal of increasing enrollment in the
program while funds are available.
13 Per the Digital Equity Act Planning Grant Notice of Funding Opportunity (NOFO), it is required that
eligible entities examine affordability and adoption as an element of the development of a statewide plan,
which is available at https://broadbandusa.ntia.doc.gov/sites/default/files/2022-
05/DE%20PLANNING%20GRANT%20NOFO.pdf
11
Appendices
Appendix A: Bill Text
VIRGINIA ACTS OF ASSEMBLY -- 2022 SESSION CHAPTER
An Act to direct the Department of Housing and Community Development to develop a plan to
address broadband affordability.
[H 1265] Approved April 11, 2022
Be it enacted by the General Assembly of Virginia: 1. § 1. The Department of Housing and
Community Development (the Department) shall develop a plan, to be known as the
Commonwealth Digital Affordability and Cost Effectiveness Plan (the Plan), to access federal
funding under the federal Infrastructure Investment and Jobs Act (P.L. 117-58). In order to
achieve this goal, the Department shall apply for funding through a planning grant from the
National Telecommunications and Information Administration. The Plan shall include (i) an
overview of options for affordable broadband connectivity in the Commonwealth; (ii)
recommendations on how best to leverage federal grants addressing broadband affordability;
(iii) best practices for establishing a broadband affordability program, taking into account
existing federal funds and programs; and (iv) recommendations for public outreach, with
12
consideration of the report submitted by the Department of Social Services as required in Item
359 L of Chapter 552 of the Acts of Assembly of 2021, Special Session I. The Department shall
report the Plan to the Governor and the General Assembly by December 1, 2022.
Appendix B: List of Affordable Connectivity Program (ACP) Participating Providers in
Virginia
13
14
15
16
Appendix C: Virginia ACP Estimated Eligibility and Enrollment by Locality (As of
September, 2022)
17
18
*Estimates may overstate or understate eligibility in a given locality
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