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Comcast Extends Adoption Program For Broadband Amid Merger Scrutiny

Wednesday, March 5, 2014

By Bryce Baschuk  

March 4 — Comcast Corp. will indefinitely extend its broadband Internet adoption program for low-income consumers, in a move aimed at satisfying critics of the company's proposed $45.2 billion acquisition of Time Warner Cable Inc.

“We remain firmly committed to the important cause of helping low-income families getting online at home and to take advantage of all that the Internet has to offer,” said David Cohen, Comcast executive vice president, in a March 4 press briefing.

Comcast's “Internet Essentials” program provides eligible consumers with broadband Internet service for $9.95 per month, digital literacy training and an option to purchase subsidized computers for less than $150. The program was launched in 2011 amid Comcast's acquisition of NBC Universal Inc. and was scheduled to expire in June 2014.

Merger Approval Pending

The announcement comes as federal regulators prepare to evaluate Comcast's proposed acquisition of Time Warner Cable, the nation's second-largest cable company. The success of the deal hinges, in part, on whether Comcast can convince the Federal Communications Commission and the Department of Justice that the merger will serve the public interest and comply with federal antitrust laws.


“We see a tremendous and exciting opportunity to bring the benefits of Internet Essentials to millions of additional families.”
David Cohen, Comcast


Cohen said regulatory approval of the merger will further expand the reach of Comcast's “Internet Essentials” program and make it available in 19 of 20 of the nation's largest cities. “We see a tremendous and exciting opportunity to bring the benefits of Internet Essentials to millions of additional families in cities like New York, Los Angeles, Dallas, Kansas City [Mo.] and Charlotte [N.C.] to name a few,” Cohen said. “That is going to be a tremendous enhancement of the eligible population of this program and we look forward to expanding the benefits of closing the digital divide to a larger footprint upon the close of the Time Warner Cable transaction.”

Cohen also framed the announcement as an important component of President Barack Obama's call to expand high-speed digital learning tools for U.S. students and teachers. Several high profile technology companies—like Apple Inc., AT&T Inc., Microsoft Corp., Sprint Inc. and Verizon Communications Inc.—have already committed more than $750 million to the president's ConnectED program. ConnectED seeks to provide schools and libraries with broadband Internet connections of at least 100 megabits per second with a target of a gigabit per second within five years.

Blunts Congressional Criticism?

Comcast has sought to assuage critics of the deal, such as Sen. Al Franken (D-Minn.), who believes the merger could result in higher prices, fewer choices and poor service for consumers. Franken recently said in a letter to FCC Chairman Tom Wheeler that Comcast's “history of breaching its legal obligations to consumers” should be taken into account as regulators evaluate the proposed acquisition.

Earlier this week, Comcast said it had met and exceeded the FCC's merger commitments stemming from the company's 2011 acquisition of NBC Universal, according to a recent public filing. Comcast said it would extend the open Internet commitments from its NBC Universal deal to Time Warner customers until 2018. Its net neutrality proposal is likely to please FCC officials who are currently seeking new protections following a recent appeals court decision that threw out much of the agency's 2010 Open Internet Order.

Comcast has also agreed to divest enough subscribers to fall below a 30 percent threshold share of multichannel pay-TV market.

If regulators and stockholders approve the merger, Comcast would acquire a net of about 8 million subscribers, bringing its total customer base to roughly 30 million.

To contact the reporter on this story: Bryce Baschuk in Washington at bbaschuk@bna.com

To contact the editor responsible for this story: Heather Rothman at hrothman@bna.com

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