Cable Companies to Offer $9.95 Broadband for Poor Homes

NEW YORK (AP) - Cable companies said Wednesday that they will offer Internet service for $9.95 per month to homes with children that are eligible for free school lunches.

The offer will start next summer and is part of an initiative the Federal Communications Commission cobbled together to get more U.S. homes connected to broadband.

One third, or about 35 million homes, don't have broadband. That affects people's ability to educate themselves and find and apply for jobs, FCC Chairman Julius Genachowski said.

"The broadband adoption gap in the U.S. is very large, and the costs of digital exclusion are high and getting higher," Genachowski said.

The initiative, called Connect-to-Compete, also includes Microsoft Corp. (MSFT), which pledges to sell PCs with its Office software suite for $250 to low-income families. A firm called Redemtech is offering to sell refurbished computers for $150, including shipping.

For those who can't afford those prices, Morgan Stanley (MS) is pledging to develop a microfinance lending program for community-based financial institutions.

People are still signing up for broadband, but growth has slowed in recent years. For those who still haven't signed up, cost is a minor factor. Most say they're simply not interested or don't need it, according to a report by the Commerce Department based on Census Bureau data from last year.

To help address the lack of interest and computer skills, Best Buy Co. (BBY), Microsoft and nonprofits such as America's Promise Alliance and United Way are promising to support the initiative with training.

All major cable companies are standing behind the $9.95 offer, which will be valid for two years. The price doesn't include taxes, but the companies are pledging to charge nothing for installation or modem rental.

The minimum download speed will be 1 megabit per second, less than one tenth of average cable speeds. Brian Dietz, a spokesman for the National Cable & Telecommunications Association, said it will be up to the individual cable companies to decide what speeds they provide.

The NCTA estimates that about 5.5 million homes that don't have broadband will be eligible for the offer. According to the Commerce Department study, 78 percent of households with school-age children already have broadband, making them far more likely to be connected than the average household.

The big broadband gap is between younger and older households: Only 45 percent of people older than 64 have broadband. Black and Hispanic households were less likely to have broadband, even when adjusting for income, according to the study.

Comcast Corp. (CMCSA), the largest cable company and the country's largest Internet service provider, is already offering broadband to $9.95 to low-income families, with a 1.5 megabit per second download speed. It offered to do that to get regulators to approve its acquisition of NBC Universal approved.

Increase your money and finance knowledge from home

Intro to Retirement

Get started early planning for your long term future.

View Course »

Getting out of debt

Everyone hates debt. Get out of it.

View Course »

Add a Comment

*0 / 3000 Character Maximum


Filter by:
Jerry K Green

Hi! I'd like to interject, the reason for all the good communications and smoothly runned or should I say suave method of delivering the goods to the people and to accept anything but the best and tolerate all that should be ample enough time for self-improvement and to negotiate the differences between the two, and most of all to acknowledge the great benefits that each and every individual had in their role model today.

Jumbo Jets Jerry

November 10 2011 at 10:09 PM Report abuse rate up rate down Reply
Mick Price

OK let's check to see if these guys are actually trying to help the poor. "The initiative, called Connect-to-Compete, also includes Microsoft Corp. (MSFT), which pledges to sell PCs with its Office software suite for $250 to low-income families. " This is $250 more than the cost of Openoffice, which is more than adequate for basic work and probably as good as MS Office. So clearly they're not really trying to help the poor, they're trying to help MS and other computer companies by expanding their market for them. Notice that they don't say how much data you get for your $10. The plan is to get these people broadband and hope they want more of it.

November 09 2011 at 8:57 PM Report abuse +1 rate up rate down Reply

Time Warner just raised their rates again and that's after a great quarter - now we will be subsidizing the, so called, poor.

November 09 2011 at 7:39 PM Report abuse +2 rate up rate down Reply

The ever more welfare state - does anyone really think they will use broadban for self education! Now they will have even more incentive to sit on their butts all day - when will it end. We the working people will be paying for this one way or another. I know let's buy them digital cameras and an ibox along with the other free stuff they get.

November 09 2011 at 7:38 PM Report abuse +3 rate up rate down Reply

And the libbies sang , gimme gimme gimme gimme gimme gimme gimme

November 09 2011 at 6:37 PM Report abuse +3 rate up rate down Reply
sushivegas home internet access is NOT a necessity...let them drag thier lazy butts to the library or stay after school. These welfare grubbing losers get enough freebies as it is...and who is paying for it? You and me

November 09 2011 at 6:25 PM Report abuse +3 rate up rate down Reply

What part of *luxury* do these folks not understand? Taxpayers should be asked to fund necessities for those physically or mentally incapable of providing for themselves. Anything more is a shameless freebie to those who should be providing for themselves.

November 09 2011 at 6:13 PM Report abuse +1 rate up rate down Reply

22" rims, hair extensions, weekly trips to the nail salon, waiting on somebody(government) to give you everything, having children you can't provide for, almost forgot the gold teeth and at least 1 gun= poor

work 50/60 hours every week, don't spend what i don't EARN, pay bills, PAY TAXES, PAY TAXES, do not want anything from the government= ME

November 09 2011 at 5:46 PM Report abuse +3 rate up rate down Reply

Enough already! I blew my stack when the free cell phones were being given to those on food stamps and such, but really, why don't their parents do like so many of us do, and either get another job (or get a first job, even if it means fast food or a grocery store), or do without an extra or two and use that money to buy what your kids need. It seems to me that kids of parents on welfare are given a lot more when it comes to school and sports etc., than the kids of parents who work for a living. Go to the library or stay after school if the kids need to use the internet, surely cable is not necessary!

November 09 2011 at 5:41 PM Report abuse +4 rate up rate down Reply

Wow..don't these so called "Poor" get enough freebies and perks already what with food stamps,section 8 housing and free tution for all the babies they keep pumping out and being rewarded for? And hey you don't even need to be a citizen of the good ol USA! I am college educated and work 2 jobs just to barely scrape by and I can't even get a free loaf of bread...and being a long time diabetic,my food costs are quite high. But I do not qualify for food stamps..I was told if I had a copule of babies I would but I am 40 and believe if you can't feed em don't breed the scumbags are getting free broadband???? They should all go back where they came from and see what they get in their native country....They would get NADA

November 09 2011 at 5:35 PM Report abuse +3 rate up rate down Reply