Sunday, August 31, 2014

Comcast deal could end $10 broadband for low-income K-12 families in Detroit, Twin Cities

When asked to describe the public benefits of their controversial plan to buy out Time Warner Cable, Comcast executives eagerly point to the expansion of Internet Essentials, Comcast's three-year-old program that provides $10 broadband accounts to families with children who qualify for Federal school lunch subsidies. If the Time Warner deal is allowed, Comcast promises the program will continue to expand its user base of low-income households in its current market areas -- now pegged at about 300,000 -- and expand aggressively  in the former Time Warner markets as well.

Comcast's rosy version of Internet Essentials' impact has drawn some skeptical press from tech-consumerist sites like Ars Technica and the Center for Public Integrity, as well as proposals for improvement and accountability from the Mayor of New York City and the California Emerging Technology Fund among others.

But even this handful of skeptics -- not to mention the hundreds of reporters breathlessly covering the Comcast deal for the tech, business, political and general media -- have failed to to notice that one of the first effects of the deal, if greenlighted by the FCC, will be to terminate $10 Internet Essentials service for tens of thousands of poor families who are already using it.

These families are among the 2.5 million customers whom Comcast is proposing to "spin off" to a newly formed cable Internet corporation temporarily called "SpinCo" to be called "GreatLand Connections".

SpinCo GreatLand is part of a maneuver to reduce Federal antitrust barriers to the Comcast-Time Warner merger.  (The maneuver also includes the sale of Time Warner systems in Ohio, Kentucky and Wisconsin to Charter Communications.) Comcast shareholders would get a majority of SpinCo GreatLand's initial stock, but the board, management and operations would all be independent of Comcast.

So households in the affected communities -- including Detroit and other cities in Michigan, Minneapolis-St. Paul, much of Indiana, and parts of Kentucky, Tennessee, Southern Illinois and Alabama -- would no longer be Comcast customers...

...and therefore, no longer eligible for Internet Essentials.

Comcast's only public acknowledgment of this issue is an obscure footnote in  Congressional testimony presented in May by Comcast's David Cohen and Time Warner's Robert Marcus.  The footnote (number 38, at the bottom of page 19) says in its entirety:
Because Comcast will no longer control the cable systems in the markets being divested, it will no longer be able to support Internet Essentials in those communities, although SpinCo could choose to continue the program.
If the as-yet-nonexistent but independent SpinCo GreatLand should choose not to continue Internet Essentials, how many low-income families would lose the benefits of the program -- particularly the 5-mbps-down Internet service they're now getting for $10 a month?

The two biggest urban centers on the SpinCo GreatLand divestment list are Detroit and Minneapolis-St. Paul.
  • According to a Comcast press release reported by Fierce Cable, 5,800 of the 150,000 familes enrolled in IE at the end of 2012 lived in Detroit. "Detroit has seen the highest penetration of the 3 Mbps service, with 11.5 percent of eligible households signing up, Cohen said." Since Detroit reached this number in IE's first sixteen months, covering one school year and the beginning of the next, it seems pretty likely that the city's current enrollment total after three full years is at least 10,000 families.
  • Another Comcast press release, from September 2013, announced that "More than 5,200 Twin Cities Families Have Enrolled in Internet Essentials". That was at the beginning of the program's Year 3, with 220,0000 total signups across the country. So conservatively, there are probably at least 7,500 families now participating in Internet Essentials in Minneapolis and St. Paul.
Of course there are many smaller cities in the proposed SpinCo GreatLand territories, and many parents of low-income schoolchildren who don't live in cities of any size but may have signed up for IE.  If 17,500 or more families in just Detroit and the Twin Cities stand to lose IE when Comcast leaves town, what might be the total for all affected communities?  25,000?  30,000?  More than a tenth of Internet Essentials' total 300,000 participants? Even as collateral damage, that's a lot of poor families to unceremoniously dump from your signature digital divide program.

The issue has now been raised to the FCC by a group of public and community organizations called the Coalition for Broadband Equity, whose members include two community agencies in Detroit with heavy involvement in broadband training and adoption efforts. (Yes, CBE is a project of Connect Your Community 2.0, which I staff.)  Our comments filed last last Monday in the Comcast-TimeWarner-Charter-Spinco docket outline the problem, and ask the Commission to:
...clarify the Applicants' intentions with respect to continued availability of discounted Internet Essentials broadband service, or its equivalent, to families of children eligible for free or discounted school lunches in Detroit and other communities which Comcast proposes to transfer to SpinCo... If the Commission determines that the Applicants do not plan to provide Internet Essentials or an equivalent program (e.g. provided by SpinCo) for these families, then we ask that the Applicants be required to do so as a condition of approving the Applications.
Stay tuned.

(Note: Jon Brodkin of Ars Technica is a marginal exception to my "failed to notice" generalization; after I contacted him about it, he mentioned the issue briefly in this story.)

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