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Cable industry proposes 50 percent discounts on broadband service serving middle school students

Getting high-speed Internet to American homes is just half the battle. Getting people to pay for the service and use it is the other part of the challenge facing federal regulators.

As such, the cable industry Tuesday proposed a two-year project to bring discounted broadband service to middle school students who don't get broadband today. The National Cable and Telecommunications Association announced a plan called Adoption Plus that would target 3.5 million middle school children from low-income families. In it, cable providers represented by the NCTA said they would give free installation and a 50 percent discount for high-speed Internet service.

The offer would give cable companies more customers. It also hinges on government aid for computers and training. The industry group is pushing the government to use stimulus funds to help households with training on computers and Internet use as well as discounts for computers. The cable companies won't get any of that funding.

The Obama administration has made universal broadband Internet access a cornerstone of its technology agenda. As part of the stimulus plan, more than $7 billion was allocated to the construction of broadband networks and programs to spur adoption.

Blair Levin, executive director of the Federal Communications Commission's broadband planning group, said the challenge of getting people to adopt broadband is complex and needs several targeted solutions. Congress has directed the FCC to come up with a plan by next February to bring affordable broadband to every home in the United States.

"We think you’ve targeted what we think of as most important segment: school age kids," Levin said in a conference call about the announcement with the NCTA. "Our country can't afford for our kids to fall further behind."

Kyle McSlarrow, CEO of the NCTA, said in the call that the program would include teleco Internet service providers if they choose to participate. He said the proposed program would include school districts, the federal and state governments, non-profit corporations promoting digital literacy, and computer manufacturers (including retailers and/or non-profits supplying computers that access the Internet).

The participating cable providers are: Comcast, Time Warner Cable, Cox, Charter, Cablevision, Bright House, Mediacom, Suddenlink, Insight Communications, Bresnan Communications, Midcontinent Communications, GCI, US Cable, Bend Broadband, Eagle Communications, and Sjoberg’s Cable.

By Cecilia Kang  |  December 1, 2009; 1:40 PM ET
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While I am glad the Cable industry is doing something like this, the devil is in the details, and he aint so pretty.

First, these companies won't do this unless the state's pony up some dough.

Second, the "deal" is anything but. Half off the cable modem rental fee? Really? So instead of paying $5 per month for a modem that costs $30 on, the subsidy price will be $2.50, or 50 cents more than the retail rental price used to be? Remember, they used to give away these things for free.

And remember, cable modem service is a huge profit engine for these companies. All this "deal" does is offer the narrow target population the chance to pad Comcast's profits.

This is nothing but a PR scam, pure and simple. If Comcast really cared about the poor children, they'd charge nothing for the modem rental, and only charge $10 per month for the Internet connection, not the $30-plus this deal will cost (remember, it is half off the standalone, non-bundled, non-promotional cost, these folks could probably get a better deal from a promotional rate).

Posted by: brettglass | December 1, 2009 3:02 PM | Report abuse

Brett Glass in incorrect in some of his assumptions. He states the discounted fee for broadband service would likely be $30 or more, and he assumes that cost will be half of the non-bundled standard rate for Internet access. But what the participating cable operators have committed to offer is 50% off the lowest-priced tier already offered, with a minimum downstream speed of at least 1 Mbps. Based on national averages, such a tier would cost less than $30 a month, which means the discounted rate should be more in the neighborhood of $15. This is an average, so in some cases it will be even lower.

As for cable modem fees, if a customer wishes to buy a $30 modem and use it, they should – all cable customers are free to use their own modems, thanks to the DOCSIS standard that the cable industry developed. If someone prefers to lease, they can do so for 50% of the usual price. And of course, there’s an opportunity for modem manufacturers, retailers and others to make the modems available to program participants for free or at a reduced rate.

I hope we made it clear that we’ve made this proposal as a way to begin a conversation – as Kyle McSlarrow said, a “first step.” We certainly welcome any and all ideas about how it can be improved and implemented.

PJ Rodriguez, NCTA

Posted by: prodzz | December 2, 2009 5:24 PM | Report abuse

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