The Federal Communications Commission is reportedly teaming up with private cable providers like Time Warner Cable, Cox and Charter to supply broadband internet access to low-income households for $9.99 per month. The New York Times said the FCC will announce commitments from most of the big cable companies sometime on Wednesday.
According to the paper, the FCC is looking to "close the digital divide" by offering a low introductory price intended for low-income households that haven't enabled broadband access in the past (yes, dial-up customers are still out there). Comcast actually already started offering the discounted price earlier this year after it acquired control over NBCUniversal, the paper said.
Low-cost broadband access will be available to households that qualify for federal school-lunch programs, and will include a rental modem, free installation and 1 Mbps access. Redemtech will provide refurbished desktops and laptops for $150 which will include free shipping and 90 days of technical support in the price. Microsoft will provide the operating system, and Morgan Stanley will help develop a microcredit program so that low-income families can pay for those computers.
As previously mentioned, the $9.99 monthly fee will be an introductory price that will stretch over a two-year timeframe: an on-ramp for new customers. Once those two years are depleted, customers are expected to pay the normal monthly price if they choose to keep the broadband access.
FCC chairman Julius Genachowski said on Tuesday that about one-third of American households, or 100 million people, do not have high-speed Internet access at home. Some of those homes simply don't have physical access to broadband internet, but many actually have access yet choose not to subscribe because of monthly pricing and/or "perceived relevance to their lives."
The new internet on-ramp for qualified customers is expected to launch in Spring 2012 and then reach all parts of the United States by September 2012. The New York Times stated that cable companies aren't expected to sustain a significant financial loss because broadband service typically has a high markup. The meager $9.99 monthly fee will "more than cover the overhead costs of providing monthly internet service."
Verizon and AT&T will reportedly not be a part of the low-income access plan.