Coalition: “New Charter” should offer $10 Internet for poor, $50 million a year to market it

The Coalition for Broadband Equity has asked the Federal Communications Commission to put a price on approving Charter Communications’ proposed buyout of Time Warner Cable: $10-a-month broadband available to all low-income households in the “New Charter” service area, and a $50 million annual budget to promote the affordable rate plan through (among other methods) outreach and training partnerships with community-based digital inclusion groups.

The Coalition made the proposals in its Initial Comments on the Charter-Time Warner merger proposal, which were filed with the FCC today.  Download the full document here.

The Coalition, organized by CYC a year ago as a voice for local community digital inclusion leaders in the earlier Comcast-Charter-Time Warner merger case, includes public and nonprofit organizations in greater Cleveland, Milwaukee, Akron, metro Dayton, Youngstown, Kansas City (KS and MO), and Winston-Salem.  All these communities currently have Time Warner as their dominant cable Internet provider.

Charter, the nation’s fourth largest cable company, announced an agreement in June to merge with the second largest, Time Warner, to create “New Charter”.  (Bright House Networks, a smaller cable provider owned by the Advance/Newhouse media group, is also part of the deal.) If approved by the FCC, New Charter would take over Time Warner operations in Los Angeles, Dallas (and elsewhere in Texas), New York City, upstate New York, North Carolina, Kentucky, Wisconsin, Missouri and Kansas as well as Ohio as early as next Summer. An FCC decision is not expected before February.

In its comments, the Coalition neither supports or opposes the merger, but instead asks the FCC to think carefully about Time Warner’s poor track record in serving low-income households or supporting community digital inclusion efforts; the big disparities in broadband access between poorer and better-off residents of many Time Warner cities, resulting in part from Time Warner’s failures; and the many ways in which the “public interest” in these communities is harmed by these disparities in areas like hiring and job search, electronic health records, K-12 as well as adult education, human services and civic participation.

The Coalition’s comments conclude:

CBE members urge the Commission to consider whether approving the Applications will lead to changes in the Applicants’ investment, products, and marketing and customer acquisition practices within our local communities which better support these difficult but important efforts – for example, by providing new paths to digital connection and inclusion for low-income jobseekers, Medicaid patients, GED trainees, schoolchildren and parents, human services clients and voters.

What commitments and future actions by the Applicants and their proposed successor, New Charter, are needed to ensure that approval of the Applications will serve the public interest in our communities?… CBE’s members ask the Commission to condition its approval of the Applications on two minimum commitments from the Applicants, to insure that approval will lead to meaningful increases in broadband Internet use by our communities’ lower-income households, reduce digital disparities among our neighborhoods, and enable our community institutions to fully embrace digital tools without fear of marginalizing large numbers of their constituents.

Proposed commitment #1:  A truly affordable Internet service tier or program for all low-income households.  In their Public Interest Statement, pp 14-15,  the Applicants state: “New Charter will build upon Bright House Networks’ broadband program for low-income consumers by making a broadband offering available with higher speeds and expanded eligibility while continuing to offer the service at a significant discount, and will begin making the offer available within six months after the transaction closes and across the New Charter footprint within three years of closing…”.[W]e welcome the Applicants’ initiative, but ask the Commission to seek the following specifics:
a) Eligibility for discounted rates should be open to all low-income households.  We suggest using telephone Lifeline program eligibility as the standard…
b) Speed and quality of service should not be unreasonably inferior to standard residential accounts.
c) CBE’s experience suggests strongly that holding the monthly cost of the program to $9.95 is the best way to encourage large-scale takeup…

Proposed commitment #2:  The low income discount program should include ambitious, accountable participation goals, supported by a major commitment of marketing dollars
a)  Applicants should commit to sign up at least 200,000 households a year for New Charter’s low-income discount service — one million by 2021.
b)  Applicants should commit to spend at least $50 million a year  (an amount equivalent to 2.5% of Charter and TWC’s combined 2014 residential marketing budgets) on marketing and new customer support for the discount initiative…

The Commission should seek to ensure that, wherever possible, New Charter prioritizes these marketing expenditures to support direct outreach and training partnerships with community-based digital literacy programs in underserved communities.