The end of the ACP federal program to provide low-cost internet is creating an interesting, but complicated, opportunity for internet service providers
This past June, the Affordable Connectivity Program (ACP) and its monthly discount on broadband services for qualifying households ended. The popular program provided anywhere from a $30 to $75 discount on internet access for qualifying households, depending on their income. Nationwide, some 18% of customers say they are still on a low-income family plan in 2025, according to J.D. Power data.
This means that a significant number of customers will soon see their rates increase and will be looking at their internet services with a new, price-sensitive eye. Accordingly, internet service providers will have an opportunity to capture a new segment of customers. The opportunity presents a complicated decision: Should providers pursue or retain these customers? And if so, what’s the best way to do it?
Bang for their buck – suggestions: “worthy investments” or “number crunching”
Providers likely suspect that customers on low-income plans are less likely to be brand loyal, and they’d be right. According to J.D. Power data, 14% of customers on a low-income plan say they “definitely will” switch plans this year, while just 6% of customers on traditional plans say they “definitely will” switch this year. That makes sense. These customers are more price-sensitive than traditional plan customers, and more apt to shop for a lower cost plan.
Interestingly, customers enrolled in low-income plans report significantly higher satisfaction levels than those on traditional plans, likely due to their perception of receiving exceptional value. Overall, customers on low-income plans had a customer satisfaction rating of 632 (on a 1,000-point scale) compared to just 530 for customers of traditional plans. With the ACP discontinued, these customers face potential price increases, which could erode their sense of value and diminish their satisfaction. Or, worse, it could force some customers to discontinue service because they cannot afford it anymore — transforming a value perception issue into an access crisis.
That’s the delicate balance providers will have to weigh. Customers on low-income plans are likely up for grabs in the current market environment, and they’re likely to see value in competitive offerings. However, their smaller spending capacity creates a challenging cost-benefit analysis regarding acquisition efforts. Is it worth it for service providers to bolster their budget-friendly offerings to attract this segment? I believe they should, as the long-term value and market share gains likely outweigh the initial investment.
The opportunity ahead
Simply dismissing lower-income plan customers because of their current spending and brand loyalty would be myopic and short-sighted. The reality is that service providers have a degree of control over those factors based on the level of customer service they provide.
Low-income plan customers are eager to see the value in their plans. Provided that brands can deliver a high level of quality for base-level services, they can unlock a whole new level of loyalty for a segment of customers that could eventually upgrade their plan. And that’s just with the existing offerings providers currently have. The entire industry has been working on more affordable home internet alternatives such as Fixed Wireless Access, and some brands have launched essential-only products (such as Xfinity’s NOW Internet).
Perhaps more importantly, internet service has evolved into an essential utility for navigating the modern world, enabling internet service providers to position themselves as a critical lifeline to their customers.
The end of the ACP and the corresponding rate hikes will certainly create challenges for providers and their customers. Providers that can find a way to invest in their most affordable plans could reap the benefits of an influx of new customers and a great deal of goodwill for their brands.
