Two Approaches to Low-Income Broadband

slow-downLarge ISPs are taking different approaches to bringing broadband to low-income households. Consider recent news about Comcast and AT&T:

Comcast has a program called Internet Essentials that provides broadband to low-income households. Comcast delivers 10 Mbps download speeds to qualifying households for $10 per month. The program was created as a condition by the FCC for the purchase of NBC Universal in 2011. For a long time the program was very low key and the company barely advertised it to customers. But over the years the company added 600,000 to the program.

Now that the FCC has created a federal Lifeline subsidy for broadband the company has become more vigorous in seeking customers and reported recently that it now has over 3 million customers in the program. The qualifying requirement for Internet Essentials has been to have at least one child in a household eligible for free or reduced price lunches. But recently Comcast has allowed households without children to apply for the program.

AT&T was also required to provide low-cost broadband as the result of its purchase of DirecTV. AT&T uses a different requirement for eligibility and will provide assistance to customers who take part in the SNAP (food stamp) program. Since there are about 21 million households in the country in the SNAP program there are a lot of eligible households in the AT&T footprint.

The FCC conditions from the DirecTV merger required that AT&T would provide broadband at different prices according to the technology they have available in different neighborhoods. The program has several tiers: 10 Mbps download for $10 per month, 5 Mbps download for $10 per month and 3 Mbps download for $5 per month. The company is supposed to provide the fastest of these speeds available in a given area.

But AT&T is now in hot water at the FCC because they are denying the program to a lot of households by using the argument that they have many neighborhoods where they can’t deliver the 3 Mbps speed required for the lowest tier. In such neighborhoods they are not offering the program.

Ironically, in neighborhoods where the fastest speed is 1.5 Mbps they will still sell that broadband for more than $50 per month, but they won’t offer the same product for the reduced price. AT&T is basing the refusal to offer low-income prices on language in the merger agreement that said they would only have to offer subsidized broadband ‘where technically feasible’ – and they are arguing that they are technically unable to deliver the lowest 3 Mbps speeds required by the program.

This is not an isolated problem. For example, the FCC’s broadband mapping system shows that 21% of the census blocks in Detroit can’t get broadband speeds greater than 1.5 Mbps. These large swaths of old and slow DSL are a result of the company’s decision over the years to not invest in faster DSL in poor neighborhoods.

It’s easy to think of very slow broadband as a rural issue. But the FCC’s records make it clear that there are a lot of neighborhoods in urban areas that have been bypassed by ISPs. These are families that connect with old first generation DSL equipment and who live in homes or apartments that are not connected to the cable TV networks.

For many years Comcast fought against the agreement they had made with the FCC to offer low-income broadband. It’s good to see them finally embrace the plan, and I’m sure that has a lot to do with the federal Lifeline program that will provide $9.25 per month to Comcast for every qualifying customer. Added to what they are getting from customers the product should be profitable. This would be even better if the company would offer real broadband at 25 Mbps for the same low price.

It’s hard to understand why AT&T is weaseling out of their obligation. One would think that this program would generate a lot of revenue from copper that has been paid for generations ago. It can’t cost the company very much to provide a broadband connection at any of the speeds they offer in these neighborhoods, particularly those with the 1.5 Mbps speeds. AT&T freely agreed to offer low-income broadband when they bought DirecTV and it’s hard to think of a valid reason for them to renege. The only reason I can think of for their position is that perhaps they have plans to start tearing down copper in these neighborhoods and don’t want a lot of customers using the networks.

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