Comcast's Competitors? Cable Giant Sees Many Rivals in Arguing For TWC Merger - Part 3: Digital Divide

Cable giant Comcast has put forth a long, complicated argument in favor of its acquisition of cable giant Time Warner Cable. In part three of this series "Comcast's Competitors?" we'll look at Comcast's argument for expanding its efforts at bridging the digital divide -- the nationwide problem of internet access and affordability for low-income families -- to TWC's territory.

Read Part One of "Comcast's Competitors?" DSL and Google Fiber

Read Part Two of "Comcast's Competitors?" Wireless Broadband

Comcast exec David L. Cohen wrote the blog post explaining why the Comcast/TWC merger is necessary for its survival, because he sees rivals everywhere (read part 1 and part 2 for more on that).

But he goes beyond that, saying that it'll actually be good for the country's current internet-related problems, like the doggedly persistent digital divide.

Expanding Internet Essentials, Closing The Digital Divide

As we previously reported, Comcast recently announced the expansion of its Internet Essentials program. It's a community development initiative run by Comcast since 2011 that seeks to bring broadband to low-income families through working with community partners like the Boys and Girls Club and by giving poor families a price break for basic broadband.

Comcast touts that its program has already connected more than 1.2 million Americans, and, since 2011, has invested more than $165M in cash for support to digital literacy programs.

It's not a small thing, and the digital divide is a real concern, especially for low-income minority families: A Pew study in 2013 found that only 53 percent of Latino families had broadband in their home, for example.

Families that qualify for Internet Essentials can get basic broadband (now up to 5 Mbps) for $9.95 per month plus tax, along with the option to buy an internet-ready computer for under $150 and free digital literacy training in both English and Spanish.

Comcast says gobbling up TWC will expand their Internet Essentials program into TWC markets. " We can't wait to bring it to TWC cities like LA, Dallas, Charlotte, and New York City," writes Cohen, "making this opportunity available to millions more families and helping reduce the unacceptable digital divide in the country."

The False Ring of Internet Essentials

Expanding Internet Essentials into TWC's markets would be a good thing. No doubt. While TWC has a bizarro version of Internet Essentials called Essentials Internet (no kidding), it's not really a good program for low-income families that want to join the digital divide. It's just basically a discount program for people who use less data.

But Internet Essentials is not all that it's cracked up to be in three ways. First, Internet Essentials has strict qualification requirements. In order to qualify, a family has to have at least one child eligible for the National School Lunch Program, and you have to present those bona fides for Comcast to judge if your family is really poor enough for basic discount broadband.

Second, Internet Essentials didn't come out of the goodness of Comcast's heart. The program only began in 2011 because it was part of the requirements imposed on the company by the Federal Communications Commission in order to allow Comcast's last huge expansion -- buying NBCUniversal. Comcast, of course, doesn't play up the fact that it was basically forced to start Internet Essentials, but that fact remains. And it reminds us, come this merger, that Comcast is a business that has to be forced, by regulation, to do good things, or it won't.

Finally, Internet Essentials is a stop-gap program whose existence is only necessary because in most markets, there aren't any better, cheaper alternatives. It's a problem of false scarcity, due to stingy investment and the monopolistic hold cable companies have over different regions of the country.

Consider this: Google Fiber provides a basic 5 Mpbs connection in the areas it operates. Consumers have to pay for installation, which costs a hefty $300, but can be spread out to $25 per month over the first year. After that, basic Google Fiber is free.

Free.

Google makes it free for at least the next six years, and without requiring anyone to prove that they're not able to afford higher-priced broadband. That's enough time for a kid to go from middle school to graduation. If only Google Fiber were expanding to 40 percent of America's broadband market.