Bipartisan Senators' Amendment Revives Affordable Connectivity Program Providing Boost to Cable and Telecom Stocks
The Affordable Connectivity Program (ACP) is alive
Yesterday, a bipartisan group of Senators introduced an amendment to the 2024 Federal Aviation Administration (FAA) Reauthorization Act, which would provide roughly $6 billion in funding toward the Affordable Connectivity Program (ACP), along with another $3 billion to 'rip and replace' equipment from Chinese telecom equipment providers ZTE and Huawei.
Reviving the ACP Program
- The bipartisan group of Senators' amendment aims to attach the ACP to the FAA Reauthorization Act, revitalizing the program that provides broadband subsidies to low-income households.
- The modified bill reduces the subsidy amount to $6 billion while implementing measures to prevent misuse.
Revival of the ACP offers financial relief to cable and telecom companies, including Charter, Comcast, and Shenandoah, which have expressed concerns over the subsidy's potential expiration.
Investors should evaluate the industry risks before making investment decisions given the capital-intensive nature of broadband businesses.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.