Business/Technology NotesMixed Response to Comcast in Expanding Net Access
By Amy Chozick, The New York Times
- Jan. 21, 2012
CHICAGO — At the cramped downtown office of the Community and Economic Development Association of Cook County, a line of older residents waited to apply for a federal program that helps pay for heat and other utilities. On the walls, next to posters advertising Head Start and other public services, hung posters for something called Internet Essentials.
“Is the Internet on your back to school list?” read one leaflet being handed out along with information about the Women, Infants and Children program, a Health Department initiative that offers nutritional and breast-feeding support to low-income families.
Internet Essentials is not a government program, although that would be difficult to tell from the poster. Instead, it is a two-year-old program run by Comcast, the country’s largest Internet and cable provider, meant to bring affordable broadband to low-income homes.
Any family that qualifies for the National School Lunch Program is eligible for Internet service at home for $9.95 a month. The families also receive a voucher from Comcast to buy a computer for as little as $150.
The program is not charity: Comcast started Internet Essentials in order to satisfy a regulatory requirement to provide Internet access to the poor, which also happens to be one of the few remaining areas for growth for cable companies across the country. More than 100,000 households in Atlanta, Philadelphia, Boston, Seattle, San Francisco and other major markets have signed up for Internet Essentials.
But as the program gains popularity, the company has come under criticism, accused of overreaching in its interactions with local communities — handing out brochures with the company logo during parent-teacher nights at public schools, for instance, or enlisting teachers and pastors to spread the word to students and congregations.
“A company like Comcast doesn’t do it out of the goodness of their heart,” said Joe Karaganis, vice president of the American Assembly, a nonprofit public affairs forum affiliated with Columbia University.
The Obama administration has been pushing private-public partnerships as a way to make high-speed home Internet access available to the 100 million Americans who lack it.
The digital divide has traditionally been regarded as one between urban and rural areas of the United States. But only about 7 percent of households without broadband are in rural areas without the necessary infrastructure; the bulk of the rest are low-income families who cannot afford the monthly bill, or do not feel it is a necessity, according to government statistics.
“The broadband divide is a real threat to the American dream,” Julius Genachowski, chairman of the Federal Communications Commission, said in an interview. “The costs of digital exclusion are getting higher and higher.”
Comcast set up shop in Chicago in May 2011, a few months after its $13.75 billion takeover of NBC Universal. As part of its approval for the deal, the F.C.C. required the company to devise a plan to make broadband available to the poor. Comcast reluctantly agreed, according to a person involved in the merger who could not speak publicly about private conversations. A Comcast spokesman said the company had volunteered the plan. Broadband subscriptions represent the main driver of Comcast’s $55.8 billion in annual revenue. The company and its competitors have largely reached saturation among households that can afford high-speed Internet. That leaves the poor as one of the industry’s main areas of growth.
“In the long, long run, yes, I hope we’re creating future Comcast customers,” said David L. Cohen, executive vice president of the Comcast Corporation. He added: “There’s no bait and switch here. This is a community investment.”
Before he became Comcast’s chief lobbyist and the overseer of Internet Essentials, Mr. Cohen was a prominent Democratic political consultant and aide to Edward G. Rendell, a former Pennsylvania governor.
He regularly consults with local political leaders, including his friend Rahm Emanuel, the mayor of Chicago, who has assisted Mr. Cohen in making the city an important market for Internet Essentials. Comcast has made donations to Mr. Emanuel’s campaigns in the past. The company spent $12.4 million on lobbying last year and contributed $4.8 million to mostly Democratic candidates.
On Saturday, the United States Conference of Mayors gave Comcast and Mr. Emanuel an award for the Internet Essentials collaboration.
Rather than sell Internet Essentials in its normal bundle, Comcast has established a separate sales team that works directly with community leaders. The company has enlisted hundreds of Internet Essentials volunteers who spread the word about the program.
One of those volunteers is Gale Woods, who, after a long shift at Walmart, used to walk her son, Austin, more than a mile to the public library so he could get access to a computer to do his homework.
The situation was not ideal, but Ms. Woods could not afford a computer, much less the monthly Internet fee. Then she heard Mayor Emanuel talking about Internet Essentials during a news conference for $10 a month, less than one-fourth what the service typically costs.
“I thought, wow, that’s a deal,” Ms. Woods, 47, said in the living room of her apartment on the city’s South Side. “It’s usually at least $40 just for the basics.”
After using the service for over a year, Ms. Woods serves as a volunteer. She tells neighbors in her Bronzeville apartment complex how to sign up and drops off brochures at the library.
As she talked about the benefits of having the Internet at home, including sending out résumés and taking classes at Northeastern Illinois University, 10-year-old Austin gently interrupted his mother. “It’s pretty slow, Mom, I have to load it three times,” he said. (Internet Essentials provides broadband with speeds of 3 megabits per second, compared with the 12 megabits per second that many higher-priced packages provide.)
At Morton High School in Cicero, a heavily Hispanic suburb of Chicago, teenagers wearing uniforms of khaki pants and white-collared shirts flooded the hallways. Near an honor roll poster and a mural of the ancient Aztecs, Michael Kuzniewski, superintendent of J. Sterling Morton High School District (known among students as “Dr. K”) said nearly 90 percent of the school’s 3,600 students qualified for the federal lunch program, making it a prime target for Internet Essentials.
Comcast sets up kiosks at open houses, handing out Internet Essentials brochures to parents. Teachers and counselors send students home with brochures. Dr. Kuzniewski said private companies approach them almost daily on ideas “to save public education,” helping him develop a healthy sense of skepticism. But when he realized how deeply a lack of broadband access put Cicero’s students at a disadvantage, any doubts he had about Internet Essentials were erased.
“We just saw them falling further and further behind,” he said.
But many advocacy groups argue that broadband has become so crucial to success in school and the work force that it should be treated like a public utility paid in part by government subsidies.
Broadband service is “a natural monopoly” controlled by a handful of private companies, said Mr. Karaganis, of the American Assembly, adding that Internet Essentials gave Comcast access to people in community settings where it could use the lure of low prices to tap into a new consumer base.
Comcast said an intimate grass-roots approach was necessary to explain to low-income customers why they need the Internet and that the monthly price cannot increase for at least three years. Skepticism about the Web often tops affordability as an obstacle to getting broadband into poor and immigrant households, the company said. “When a child comes home with information about the school lunch program, we want an Internet Essentials brochure in that packet,” said Cathy Avgiris, executive vice president and general manager of Comcast Cable’s communications and data services.
Marsha Belcher, director of marketing and resource development at the Community and Economic Development Association of Cook County, said that her office’s relationship with Comcast was “a matter of trust.” She added, “All of our staffers have worked with Comcast volunteers. If they want to sign up for triple play, they can, but we trust Comcast when they say they won’t be pitched” costly packages of phone, cable and Internet services.
In September the F.C.C. helped set up Connect2Compete, an independent nonprofit group that compiles pledges from Internet and software companies to get computers and Internet access to the underserved. Connect2Compete serves as a middleman between communities and companies. Comcast’s major competitors, including Cox Communications, Time Warner Cable, Bright House Networks and others, have signed on to offer discounted broadband to low-income customers through Connect2Compete.
That setup is intended to create a buffer between corporations and communities to avoid the kind of murky territory that private-public partnerships like Internet Essentials must navigate, said Zach Leverenz, chief executive at Connect2Compete.
“It’s important to have a trusted intermediary,” he said.http://www.nytimes.com/2013/01/21/business/media/comcast-internet-essentials-brings-access-to-low-income-homes.html?ref=technology