NBC Universal JV
Comcast offered Internet Essentials shortly before its last big acquisition, when it bought NBC Universal in 2011.
To ease federal approvals of the transaction, the company promised that it would offer low-priced Internet connections and computers to low-income families. But the Federal Communications Commission, which approved the merger, didn’t set any participation requirements, or metrics to define success.
Now the cable and broadband giant, wants to buy Time Warner Cable, and again in an attempt to show regulators the deal is in the public interest, is offering to extend the program indefinitely and offer it to all Time Warner's customers too. The deal, if approved, will give Comcast control of about 40 percent of US Internet users.
The program makes for good public relations, but its real impact on the persistent problem of low-broadband adoption rates among the poor is negligible and is a weak substitute for a national strategy, advocates say. Of the 7.2 million low-income people in Comcast’s service area, only 2.6 million are eligible for Internet Essentials, according to data compiled by the Center for Public Integrity.
The program requires the participant’s household to include a child who is eligible for the federal school lunch program. Of that 2.6 million, only 300,000, or 12 percent, have signed up since Internet Essentials was launched in 2011. The low participation rate suggests that relying on merger conditions to make private companies provide what has become an essential tool to participate in society may not be the best approach to bridge the digital divide.
Comcast exec VP David L. Cohen isn’t sure how the Federal Communications Commission’s proposed network neutrality rules will define broadband providers’ ability to charge for an Internet “fast lane” but said that in any case, the cable giant has the right to offer paid prioritization to partners.
“Whatever it is, we are allowed to do it,” said Cohen. Cohen, who leads the operator’s public policy and communications efforts, referred to the “almost hysterical reaction” to reports about the FCC’s revised net neutrality rules. “You have the whole world reacting to a document no one has seen,” he said.
Comcast has agreed to comply with the 2010 FCC Open Internet order, under the terms of its government consent decree for NBCUniversal, until 2018 -- even though the main parts of that order were struck down by the DC Circuit in January.
“We are not sure we know what paid prioritization, or what a fast lane, is,” Cohen said. “Fast lane sounds bad… (but) I believe that whatever it is, it has been completely legal for 15 or 20 years.”
Having exhausted its court appeal options, the Tennis Channel wants the Federal Communications Commission to take another crack at justifying its decision that Comcast discriminated against Tennis Channel in favor of its own, co-owned sports networks Golf Channel and NBC Sports Network.
The FCC upheld Tennis Channel's program carriage complaint, but the DC Federal Appeals court vacated that decision, saying the facts did not support discrimination, and the Supreme Court declined to review that lower court ruling.
“[E]ven under the Commission’s interpretation of § 616 (the correctness of which we assume for purposes of this decision), the Commission has failed to identify adequate evidence of unlawful discrimination," the court concluded, which would seem to be definitive. But Tennis has petitioned the FCC asking it to test Comcast's actions against three "tests" the court suggested "may" establish that Comcast discriminated.
[Commentary] Comcast is extending its $10-a-month broadband program for low-income Americans.
The discounted service, known as Internet Essentials, was set to expire three years after Comcast's merger with NBC-Universal in 2011. But now the cable company says it's making the program available to eligible people "indefinitely." The Comcast-Time Warner Cable merger must still be approved by the Justice Department and the Federal Communications Commission, and analysts say Comcast's latest moves are part of a charm offensive designed to win over skeptical regulators.
Comcast's motives aside, giving poorer Americans the same access to broadband that wealthier people enjoy has been a longtime goal of the Obama Administration. Internet Essentials makes a dent by connecting some 300,000 households to broadband -- the equivalent of 1.2 million individuals, according to Comcast.
Other cable providers have since followed suit, working with the FCC in a program called Connect to Compete that also aims to provide a similar discount. Making sure everyone, rich or poor, gets adequate access to the Web is something businesses should be doing of their own volition -- which brings us back to Comcast. Industry watchers say Comcast's compliance with the FCC's previous requirements, along with the changes that would result from a merger with Time Warner Cable, might encourage regulators to ask for more concessions this time around. Thing is, it probably shouldn't take a merger to produce them.