Tuesday, August 9, 2011

Comcast Seeks To Breach The "Digital Divide" With Low Cost Cable Access And Discounted Computers

AJC: Low-income families get access to cheaper Internet




Comcast Corporation is partnering with several metro Atlanta school districts to educate families about a new program to offer discounted Internet access to low-income students.

Today at a morning press conference, Comcast executives along with Mayor Kasim Reed, Gov. Nathan Deal and other area leaders will announce the program, which will be offered to families of students who qualify for free or reduced-priced school lunch.

Families who qualify will receive broadband Internet for $9.95 a month with no activation fee, no modem rental and a voucher to purchase a computer for $149.99. The Atlanta launch is part of the company's larger campaign to shrink the nation's "digital divide" by addressing the barriers to Internet access, according to David Cohen, executive vice president of Comcast Corporation.

I am in general support of these type of public-private partnerships to increase Internet access to more people. Comcast is merely making a strategic investment to protect its long term interests in developing a connected customer base.

Discounted Internet access on an existing carrier infrastructure is a far more logical strategy than was the various government WiFi schemes that were built and then crashed and burned over the past 5 years. Their goal was to have the government go into business against Comcast, Verizon and AT&T - with government capital tied up in the process. Hundreds of millions of dollars were ultimately squandered across the nation in this scheme.

It is far more rationale to allow the large telecomm companies to build out national networks, making continuous capital investments to upgrade the speed and capacity as the prime users are invoiced for services rendered to pay down the corporate bonds that are often issued to fund a large investment such as "FiOS" or "Uverse" or "XFinity DOCSIS 3.0" (Verizon and AT&T and Comcast respectively).

With the infrastructure built out and its financial model set - Comcast now is seeking to expand its customer base. They already have the wires running by the houses of "The Least Of These" who are in the remnants of the "Digital Divide". The incremental costs of providing them with service now are very different than the strategy of those who market the "Social Justice Of Telecommunications" were driving years ago.

The infrastructure to "light up" a community with high speed Internet costs hundreds of thousands of dollars in equipment, man hours for installation and then marketing and customer services costs. Had their plan of attack against the big telecoms worked - their ability to provide lower cost access would be negatively impacted by the "race to zero" that the government funded networks would have driven. (The government operated networks would have eventually gon out of business still - as the local governments were no longer able to subsidize the money losing venture.)

The arguments of the "Social Justice Telecom" people are like fingernails across a chalkboard to my sensibilities. Over my career I have noted the multi-billion dollar infrastructures of these large carrier networks and the over-head of highly skilled employees necessary to keep the networks running.

I support ubiquitous, high speed, high quality wire line and wireless networks. The best way to accomplish this is to allow the large infrastructure providers that can scale to operate the "utility" and place the upstart innovation at the application space (see Google and FaceBook).

The comparisons in speed and coverage with other nations often compare a foreign nation with 6 million or 20 million Internet users with our nation of approximately 95 million broadband users in a very geographically dispersed nation. In short - their comparisons are for the purposes of indictment - not based on rational fiscal justifications.

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