Comcast launched another prong in its strategy to convince policymakers to OK its takeover of Time Warner Cable, announcing a pledge to continue offering basic broadband for $9.95 per month to low-income families indefinitely.
Effectively, the cable giant is spinning the expanded low-cost Internet Essentials program as one of the key benefits of the proposed $45.2 billion deal for TW Cable — despite the fact that post-deal Comcast would control nearly one-third of U.S. broadband market.
Comcast exec VP David L. Cohen, who leads the company’s public policy initiatives, said the goal of extending Internet Essentials was to close the digital divide, which refers to the lag in adoption of Internet access among lower-income consumers. “Why are we doing this? It’s just that important,” he said on a call with reporters.
If the Time Warner Cable transaction closes, Internet Essentials eventually will become available in 19 of the 20 biggest American cities, including in TW Cable’s biggest markets of New York, L.A. and Dallas, according to Cohen.
Comcast originally launched the low-cost broadband access program in May 2011, as one of the government-mandated terms of its takeover of NBCUniversal. That was set to run through June 2014, but now Comcast is promising to continue offering it voluntarily indefinitely.
Asked by a reporter whom he would be visiting in D.C. today to discuss the TW Cable merger, Cohen declined to answer. “I don’t think that has much to do with Internet Essentials,” he said.
Comcast, in announcing its TW Cable bid, said it was prepared to divest about 3 million Time Warner Cable subscribers to alleviate competitive concerns — giving the combined company roughly 30 million subscribers. Still, even after that divestiture, Comcast would have about 32% of all broadband subscribers in the U.S., according to MoffettNathanson Research.
Since launching, Internet Essentials has connected more than 1.2 million low-income Americans, or 300,000 families, to broadband, according to Comcast. The operator has expanded eligibility requirements over the past two and a half years, and increased downstream speeds from 1 megabit per second to 5 Mbps currently.
Also Tuesday, Comcast announced more than $1 million in grants to dozens of non-profit organizations to create “Internet Essentials Learning Zones” with public Internet access and digital-literacy training. They will be established in communities across the U.S., including in Atlanta, Chicago, Denver, Fresno, Miami and Seattle.
To be eligible for Internet Essentials, families must have at least one child who qualifies for the National School Lunch Program. Comcast offers the program in more than 30,000 schools and 4,000 school districts, in 39 states and Washington, D.C.