[Advisors] FW: [CTCNet-listserv:542] NY Times: F.C.C. Push to Expand Net Access Gains Help

[michael gurstein]

-----Original Message-----
From: ctcnet-listserv@googlegroups.com
[mailto:ctcnet-listserv@googlegroups.com] On Behalf Of Stephen Ronan
Sent: November-09-11 4:38 PM
To: ctcnet-listserv@googlegroups.com
Subject: [CTCNet-listserv:542] NY Times: F.C.C. Push to Expand Net
Access Gains Help

http://www.nytimes.com/2011/11/09/business/media/fcc-and-cable-companies
-push-to-close-digital-divide.html

F.C.C. Push to Expand Net Access Gains Help

To sign up some of the estimated 100 million Americans who are not
online,
the Federal Communications Commission and private providers are trying
to
make broadband Internet access both less expensive and more valuable.

On Wednesday, the F.C.C. will announce commitments from most of the big
cable companies in the United States to supply access for $9.99 a month
to
a subset of low-income households. The low introductory price is meant
to
appeal to new customers who have not had broadband in the past.

The F.C.C. is billing the initiative as the biggest effort ever to help
close the digital divide. Because no federal funds are being invested,
the
initiative relies in large part on the cooperation of private companies.
One such company, Comcast, started offering $9.99 monthly broadband
service
to some low-income households this year after promising the F.C.C. that
it
would do so when it acquired control of NBCUniversal.

By enlisting the cable companies as well as a wide range of nonprofit
groups that will educate eligible families about the low-cost access,
"we
can make a real dent in the broadband adoption gap," Julius Genachowski,
the F.C.C. chairman, said in a telephone interview Tuesday.

Mr. Genachowski has made broadband deployment and adoption the top
priority
of his tenure at the F.C.C. The government estimates that about
one-third
of American households, or 100 million people, do not have high-speed
Internet access at home. Some of those homes simply do not have access
to
service, but most do and choose not to receive it, for reasons involving
cost and perceived relevance to their lives.

To address the first point, along with the low monthly price, a
technology
company will supply refurbished computers for low-income households for
$150; Microsoft will provide software; and Morgan Stanley will help
develop
a microcredit program so that families can pay for those computers.

To address the second point, job Web sites and education companies will
offer content that will, in theory, make online access more valuable.

Eligibility will be limited to those households that have a child
enrolled
in the national school lunch program and that are not current or recent
broadband subscribers. About 17.5 million children are enrolled in the
school lunch program. That limitation is likely to disappoint advocates
who
would like more affordable access extended to all households.

For those households, the $9.99 monthly price will apply only for a
two-year period. The price is akin to an on-ramp for new customers, with
the hope being that they will decide to pay more for access once they
have
had it for a while.

The F.C.C. said the initiative would begin in the spring and reach all
parts of the country in September 2012. It is similar in some ways to
Adoption Plus, a partnership that was proposed two years ago, but never
carried out, by the National Cable & Telecommunications Association, a
cable trade group.

The participating cable companies - including almost all of the biggest
ones in the country, like Time Warner Cable, Cox and Charter - are not
expected to sustain a significant financial loss. Broadband service
normally has a high markup, and the $9.99 price will more than cover the
overhead costs of providing monthly Internet service.

The announcement on Wednesday will not include two companies that are
major
players in the broadband business, Verizon and AT&T. The F.C.C. is
reviewing AT&T's proposed acquisition of T-Mobile.

Asked why the cable companies were willing to participate, Mr.
Genachowski
said he thought they "looked at this and said, this is an important
national challenge, let's be part of the solution."

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