Providing Internet Access to the Poor

Last June, Julius Genachowski, chairman of the Federal Communications Commission, issued a challenge to the audience at a cable industry conference in Chicago. “You’ve connected two-thirds of Americans to broadband, and I applaud you for that,” he said, “Now, let’s work together to connect the last third.” Later that night Chairman Genachowski had dinner with cable executives and, according to the FCC, asked them for help. They obliged.

On Nov. 9, the FCC announced “Connect to Compete,” a program designed to bring lower-income Americans online. In 2010, 31 percent of Americans lived in areas where broadband was available but chose not to pay for it. Of these, slightly more than a third cited cost of service and devices as the main reason. Now households with at least one child in the federal free school lunch program can buy broadband Internet access for $10 a month and relatively new, fast, refurbished computers for $150. (To qualify for free lunches, a family of four must have income below $29,055.) The commission estimates the program could reach between 15 million and 25 million Americans—and won’t cost taxpayers anything.

“We talked to every service provider under the sun,” says Josh Gottheimer, Genachowski’s senior counselor. “The cable industry decided to step up.” Given the reflexive intransigence the FCC often encounters with the companies it regulates, this was no mean feat. Fourteen cable providers, including Comcast, Cox Communications, and Time Warner Cable, will provide Internet access at well below market rates. There is a catch: That access is also well below market speeds. Typical introductory packages begin at 15 megabytes per second. The FCC has been reluctant to pin itself down to a definition of “broadband,” but in documents generally puts it at 4 mbps. For the discounted $10 rate, the cable companies offer 1 mbps, too slow for reliable video streaming or Internet telephone service, both of which compete with other cable industry products. “It’s not good for downloading movies, I give you that,” says Gottheimer, “but that’s not the ultimate goal of this program.” The FCC says it hopes people will use the Internet access to apply for jobs, do schoolwork, and use government Web sites. The speed is “not ideal,” he says but the program is “certainly a very important step and it’s going to help a lot of people.” The contracts will also waive installation, activation, and modem rental fees, which have been a significant barrier to entry for lower-income groups. The cable companies have committed to the offer through 2014.