S. 2238, PLAN for Broadband Act

Bill Summary

S. 2238 would appropriate $7.0 billion for the Affordable Connectivity Program and $3.1 billion for the Supply Chain Reimbursement Program, both administered by the Federal Communications Commission (FCC). In addition, the bill would direct the FCC to auction its inventory of spectrum licenses within the band of frequencies commonly referred to as the AWS-3 bands.

The bill also would require the FCC and the National Telecommunications and Information Administration (NTIA) to report to the Congress on a national strategy to synchronize federal broadband programs and their implementation plan. Finally, the bill would require the Government Accountability Office (GAO) to study the efficacy of that plan.

Estimated Federal Cost

CBO estimates that enacting S. 2238 would, on net, increase direct spending by $6.5 billion over the 2025-2034 period; that amount includes an increase in direct spending of $9.8 billion and an increase in offsetting receipts, which are recorded in the budget as decreases in direct spending, of $3.3 billion. The estimated budgetary effect of S. 2238 is shown in Table 1. The costs of the legislation fall within budget functions 370 (commerce and housing credit) and 950 (undistributed offsetting receipts).

Basis of Estimate

CBO assumes that the bill would be enacted late in calendar year 2024.

Direct Spending

In total, CBO estimates that enacting S. 2238 would increase direct spending by $6.5 billion over the 2025-2034 period.

The bill would appropriate $7.0 billion for the Affordable Connectivity Program. Based on historical spending patterns for the program, CBO estimates that the FCC would spend $6.9 billion over the 2025-2034 period to fund monthly broadband benefits for low-income households and subsidies for connected devices, such as laptops and tablets.

The bill also would appropriate $3.1 billion for the Supply Chain Reimbursement Program. Based on historical spending patterns for the program, CBO estimates that the FCC would spend $3.0 billion over the 2025-2034 period to reimburse communications providers for the cost of removing and replacing equipment and services that pose a risk to national security.

CBO expects that providers would apply for funding in 2025 and 2026, and that the FCC would reimburse most providers over the 2027-2030 period.

In addition, the bill would direct the FCC to auction its inventory of spectrum licenses within the band of frequencies commonly referred to as the “AWS-3 bands.” Using information from a prior AWS-3 auction and an analysis of industry demand, CBO estimates that the reauction of these licenses would generate $3.3 billion in offsetting receipts over the 2025-2034 period.

Spending Subject to Appropriation

In total, CBO estimates that implementing S. 2238 would cost $2 million over the 2025-2029 period; any related spending would be subject to the availability of appropriated funds.

Based on the cost of similar activities, CBO estimates that it would cost the NTIA, in consultation with other federal agencies, $2 million to implement the requirements in S. 2238.

CBO estimates that any costs to the FCC implement the bill would be insignificant. The FCC is authorized to collect fees each year sufficient to offset the appropriated costs of its regulatory activities; therefore, CBO estimates that the net cost to the commission would be negligible, assuming appropriation actions consistent with that authority.

Based on the costs of similar activities, CBO estimates that it would cost the GAO less than $500,000 to complete the required study.

Pay-As-You-Go Considerations

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. The net changes in outlays that are subject to those pay-as-you-go procedures are shown in Table 1.

Increase in Long-Term Net Direct Spending and Deficits

CBO estimates that enacting S. 2238 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2035.

Mandates

If the FCC increases annual fee collections to offset the costs of implementing provisions in the bill, S. 2238 would increase the cost of an existing private-sector mandate on entities required to pay those fees. CBO estimates that the incremental cost of the mandate would be small and would fall well below the annual threshold established in the Unfunded Mandates Reform Act (UMRA) for private-sector mandates ($200 million in 2024, adjusted annually for inflation).

S. 2238 contains no intergovernmental mandates as defined in UMRA.

Estimate Prepared By

Federal Costs:

David Hughes (for the Federal Communications Commission and National Telecommunications and Information Administration)

Alaina Rhee (for spectrum auctions)

Mandates: Rachel Austin

Estimate Reviewed By

Justin Humphrey
Chief, Finance, Housing, and Education Cost Estimates Unit

Robert Reese
Chief, Natural and Physical Resources Cost Estimates Unit

Kathleen FitzGerald
Chief, Public and Private Mandates Unit

Ann E. Futrell
Senior Adviser for Budget Analysis

Estimate Approved By

Phillip L. Swagel

Director, Congressional Budget Office