Big Cable Joins the Broadband Stimulus Fray

Major domestic cable operators have sat on the broadband stimulus sidelines so far, but that all appears to be changing in the second round of American Recovery and Reinvestment Act (ARRA) funding, as Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), Cox Communications Inc. , the National Cable & Telecommunications Association (NCTA) , along with several smaller MSOs, put their collective weight behind a public/private coalition that's seeking more than $52 million to help drive high-speed Internet and computer adoption in poor pockets of the United States. (See Recovery Act: Cable Bids for Broadband Funds and Recovery Act: Cable Shortchanged.)

The proposed "Broadband Adoption Initiative" hopes to stimulate broadband adoption and generate 250,000 new high-speed Internet subscribers and computer users in government-supported, low-income housing. The total cost of the plan is projected to be $78.32 million, with $52.11 million of that total being requested through the proposal, according to an executive summary supplied to Light Reading Cable. (See MSOs, AT&T Make Low-Income Broadband Pitch.)

The Digital Adoption Coalition, which claims to have the support of the Department of Housing and Urban Development (HUD) and the Federal Communications Commission (FCC) , is made up of a mix of cable friends, competitors, and outside agencies:

Table 1: Who's In?
AT&T BendBroadband Bresnan Communications Bright House Networks Cablevision Systems Corp.
Charter Communications Comcast Corp. Cox Communications Connected Nation Eagle Communications
Dell Inc. Intel Corp. Mediacom Communications Microsoft Corp. Midcontinent Communications
National Cable & Telecommunications Association (NCTA) One Economy Corp. Sjoberg's Cable TV Suddenlink Communications Time Warner Cable
US Cable Group USTelecom
Source: The Digital Adoption Coalition.

One Economy Corp. filed the application on behalf of the consortium for Round 2 of a broadband stimulus project that, as part of the broader ARRA, will grant a total of $7.2 billion. The coalition is also coming into play the week after the FCC published its proposed National Broadband Plan and a broad set of policies that aim to help bring high-speed Internet access to all Americans. (See The Broadband Plan: Vendor Viewpoint, The National Broadband Plan, FCC Floats 'Simple' Gateway, CableCARD Rules , and FCC Proposes 300MHz More Spectrum by 2015.)

The consortium's proposal, filed for the National Telecommunications and Information Administration (NTIA) 's Broadband Technology Opportunities Program (BTOP), looks to target a broadband adoption program at more than 2 million HUD multi-family public housing units.

Under the plan, the ISP partners have committed to offer discounted (up to 50 percent) monthly broadband service to eligible households for over two years, plus free standard installations to HUD developments that don't, or haven't, subscribed to a residential broadband service over the prior three months. The ISPs also intend to rent or sell broadband modems for a 50 percent discount.

These elements of the proposal closely resemble the Adoption Plus (A+) program the US cable industry announced in late 2009, and it's targeted to about 1.8 million low-income households with children in a school lunch program. (See Cable Offers 50% Broadband Discount to School Lunch Bunch.)

The consortium proposal also calls for a minimum $175 instant rebate toward PC purchases (a mix of laptops and desktops) for participating residents in HUD developments.

On top of the equipment and service-related components, the group is also pledging to provide digital literacy training to public housing residents, and to donate $1.5 million toward public service announcements to help build awareness of the overarching campaign. The consortium claims that the program will "save or create 5,000 jobs."

The government is expected to start announcing Round 2 award-winners by July, and to wrap it up by the end of Sept. 30, 2010.

— Jeff Baumgartner, Site Editor, Light Reading Cable

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