clock menu more-arrow no yes

Filed under:

Comcast is promoting its low-cost internet program by forgiving old debts

New, 10 comments

Comcast wants to merge with Time Warner Cable. To do that, it needs to convince the Federal Trade Commission and the Federal Communications Commission that the merger won't create a monopoly or hurt consumers. And since Comcast can't offer much in the way of good customer service, its promise to extend Comcast-level quality to America's second-largest ISP rings a little hollow. But the company has at least one legitimate, potentially meaningful arrow in its rhetorical quiver: the Internet Essentials plan, which subsidizes the cost of basic broadband for low-income subscribers.

For families that qualify for the National School Lunch Program (which generally applies to households who make 185 percent or less of the poverty line), Internet Essentials provides internet service for $9.95 and a desktop or laptop for around $150. Comcast says that since launching the plan in 2011, it's signed up 350,000 families and sold 30,000 subsidized computers. Having originally created the program to appease regulators during its merger with NBCUniversal, Comcast is now using it to argue that a Time Warner Cable acquisition would allow millions more to get online, an argument that plays directly into the Obama administration's attempt to make broadband access widely available and affordable.

This merger is arguably the reason that Internet Essentials is still around at all — it was originally set to expire this year, but Comcast renewed it a few weeks after announcing the acquisition. Now, it's making a bid at bolstering Internet Essentials' image: an amnesty program that will allow some families with outstanding bills a chance to resubscribe. Previously, Comcast barred people with an outstanding bill from applying. In a blog post today, however, it announced that it would forgive debts for anyone whose bill was over a year old. If a bill is more recent, they'll have to settle it, but Comcast promises to "work with families whose debt is reasonable enough that that they could pay us back in installments." If a family is signing up for the first time, they'll also get up to six months of service (worth about $60 in total) for free.

Comcast has previously denied that bigger problems with Internet Essentials exist. Last month, the California Emerging Technology Fund alleged that families were forced to wait months before getting internet access, and that it violated its own rules by performing credit checks on applicants; Comcast said the first assertion was incorrect and the second was the result of an error. Here, the company isn't losing too much by eating the cost of old bills and offering a deal that amounts to less than a single month on most unsubsidized plans. In the short term, it incentivizes coming back instead of going to a competitor to escape old fees. And if it works, it gives Comcast bigger numbers to cite in an FTC or FCC defense.