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Comcast Plugs TWC Deal With Internet Program

Mari Silbey
3/4/2014
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With one eye on Washington regulators overseeing its pending buyout of Time Warner Cable, Comcast announced Tuesday that it will both expand the size and extend the duration of Internet Essentials, its low-cost broadband adoption program for low-income families in the US.

Launched in June 2011, Internet Essentials was initially scheduled to last for three years as a voluntary condition of Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s acquisition of NBC Universal . Now that the company is seeking to take over Time Warner Cable Inc. (NYSE: TWC) in a proposed $45.2 billion deal, the company plans to extend the program indefinitely. In addition, with the planned addition of TWC's customer footprint, Comcast aims to offer the program in even more of the nation's largest markets.

"With the recent announcement of our merger with Time Warner Cable, we see a tremendous and an exciting opportunity to bring the benefits of Internet Essentials to millions of additional families," said Comcast Executive Vice President David L. Cohen in announcing the news on a press conference call. "And I'm thrilled that after the Time Warner Cable transaction closes, Internet Essentials will be available in 19 of our nation's 20 largest cities."

Spreading the wealth further, Cohen also announced that Comcast will award more than $1 million in grants through its Gold Medal Recognition program to help select communities build Internet Essentials Learning Zones. (Details were light on what those learning zones would feature.) Fifteen communities won these grants for demonstrating superior efforts to bridge the digital divide, including Atlanta, Chicago, Miami, and San Francisco. Five additional communities were recognized for being "most improved" in their efforts to spread broadband adoption.

All 20 communities have been given an offer for the next two weeks that allows families in their regions who are eligible for Internet Essentials to sign up for the program and receive six months of free Internet service. That offer ends on March 18.

Besides the news on Internet Essentials, Cohen took the opportunity to highlight the milestones that the program has so far achieved. According to Comcast, Internet Essentials has now connected more than 1.2 million individuals, or about 300,000 families. That's a significant step up from the 150,000 families that were covered a year ago. (See Comcast Internet Essentials Connects 600K Americans.)

Since 2011, Comcast has also used the program to sell 23,000 subsidized computers for less than $150 each; partner with more than 8,000 community organizations, government agencies, and elected officials; and offer Internet Essentials to more than 30,000 schools in 39 states and Washington DC. Cohen said Comcast has spent more than $165 million "in cash and in-kind" donations on digital literacy outreach and education.

As a special guest at the press conference, Philadelphia Mayor Michael Nutter was on hand to accept recognition for his city being one of Comcast's "most improved" communities and to congratulate Comcast on the success of its program. He not only praised Internet Essentials, but also voiced his backing for Comcast's plan to acquire Time Warner Cable, calling himself "a strong supporter of the Comcast/Time Warner merger."

Coinciding with the extension of the Internet Essentials program, Comcast also announced the release of a new report called The Essentials of Connectivity. Dr. John B. Horrigan, who led the study and was formerly head of research for the Federal Communications Commission (FCC) 's National Broadband Plan, said the study found that community expectations and social networks play a big role in broadband adoption.

Specifically, 83% of the Internet Essentials participants surveyed said their children's schools expect them to have broadband access at home. Half or more of those surveyed also said that banks, health insurance companies, and government agencies have the same expectation.

Currently, only families with children in the federal school lunch program can sign up for Internet Essentials, but Comcast isn't against the idea of expanding eligibility in the future. Cohen said that Comcast has already done a pilot program with AARP, and that it continues to study the results.

For now, though, participants in Internet Essentials must have at least one child eligible for free or reduced school lunch, not have subscribed to Comcast Internet service within the last 90 days, and not owe Comcast any money or equipment. Households that meet those requirements and sign up for the program are offered elementary broadband service for $9.95 per month plus tax.

— Mari Silbey, special to Light Reading

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GeoTel
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GeoTel,
User Rank: Light Beer
3/14/2014 | 10:25:55 AM
Positive TWC
Good for TWC and offering Internet Essentials, a low-cost broadband adoption program for low-income families. Income causes a huge disparity when it comes to Internet service. There is a point where speed isn't the priority; it is simply being able to connect. 
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
3/6/2014 | 12:07:02 AM
Re: Comcast Essentials Slow Speed Network
What's needed is low-cost high-speed Internet access for everyone, not just a fraction who meet a financial criterion. The US needs to catch up with the rest of the world on that.
albreznick
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albreznick,
User Rank: Blogger
3/5/2014 | 9:37:53 PM
Re: Enough?
What kinds of conditions would you impose on the Comcast-TWC deal that would make a real difference? What would you like to see the feds do?
gconnery
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gconnery,
User Rank: Light Sabre
3/5/2014 | 7:15:05 PM
Re: Enough?
Yeah, I'd direct anybody who thinks this is great to a Google search of Comcast Internet Essentials.  You'll find most of your results are people in forums complaining that the people they talk to don't know the program exists, they faxed the required information a month ago and are still getting the runaround etc.  I suspect that while this program theoretically exists and you *can* get it, you have to be very very persistent to get anybody at Comcast to admit that it exists and get you signed up for it.
KBode
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KBode,
User Rank: Light Sabre
3/5/2014 | 2:32:57 PM
Re: Enough?
I do think it will probably be approved. NBC was a bigger deal with all the same if not greater leverage concerns, and that was allowed to go through.

Comcast is FANTASTIC (like AT&T was with BellSouth merger) at suggesting merger conditions that look great and significant, but usually ask them to do things they were already doing (reach a certain penetration mark they already passed or will do so), or won't really impact their bottom line because most people won't qualify or can't find the offer.

It's all kind of theater, and a deal has to be simply awful for direct competition to be blocked (AT&T T-Mobile). 
kq4ym
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kq4ym,
User Rank: Light Sabre
3/5/2014 | 11:06:54 AM
Comcast Essentials Slow Speed Network
Of course Comcast has to play any card it can to win approve for the merger deal. The Internet Essentials program is useful to those who qualify, but very limited in reality. With only 300,000 homes paying the 10 bucks (plus another 15% or so in added taxes and fees) for a reallly slow internet service (about 1.5 mbps down and .6 up) it is really just a give away to appease regulators.

I've been testing a similar bare bones Internet Basics service through my southwest Florida Century Link provider and surprising find the "slow" speeds available actually do work very well even for watching YouTube video. The slow upload is the weak feature, disallowing an HD broadcast on Google Plus or other streaming broadcast sites. But what's needed is an expansion of these low cost basics program to millions not just hundreds of thousands.
msilbey
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msilbey,
User Rank: Blogger
3/5/2014 | 9:32:39 AM
Re: Enough?
To hear David Cohen talk, the merger is already a done deal. Seriously, I don't know when I've heard anyone talk more brazenly about something that theoretically isn't a sure thing yet. Comcast clearly doesn't believe it needs to make a show of deference to the FCC.
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
3/4/2014 | 11:30:29 PM
Cynical of me?
Is it cynical of me to suggest that Comcast is making this move to make itself more attractive to the FCC? I wonder how long the program will survive merger approval?
MikeP688
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MikeP688,
User Rank: Light Sabre
3/4/2014 | 9:03:41 PM
Re: Enough?
The regulators may ask some reasonable questions--but if I was a betting man, I would bet that the merger will go through.   The statistics reported on are quite impressive--but is it enough?

 

 
KBode
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KBode,
User Rank: Light Sabre
3/4/2014 | 6:23:34 PM
Enough?
I wonder if this, combined with the rumored plan to spin off 3 million of the acquired users, will be enough for the FCC? I have the aching suspicion that it will be, and any concerns about vertical integration or leverage over the Internet video market will be dismissed as "theoretical" by Comcast and the FCC alike.
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