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AT&T and cable companies could offer discounted broadband to low-income users
An recent application for stimulus funding aims to increase broadband adoption.

By Joan Engebretson / Connected Planet
March 25, 2010

An application for broadband stimulus funding filed last week aims to increase broadband adoption among low-income Americans, in part through discounts on broadband Internet service.

The application, filed by the non-profit organization One Economy Corporation, has the backing of AT&T and several cable companies, which have agreed to provide free installation and discounts of at least 50% on at least one service tier to qualified residents of low-income housing as part of the proposal. Qualified consumers also would get at least 50% off on the modem.

Service providers that are members of the Digital Adoption Coalition -- including AT&T, Charter Communications, Comcast, Cox Communications, Time Warner Cable and other cable companies -- have agreed to support the program, One Economy Corporation Managing Director Ken Eisner told Connected Planet.

“The majority of all cable companies are on board already,” Eisner said. The coalition also includes computer manufacturing companies such as Dell, Intel Corporation and Microsoft, which have agreed to make discounted equipment available to end users.

The grant application, filed with the National Telecommunications and Information Agency, seeks $52 million, which would go to One Economy Corporation and other non-profit organizations, such as Connected Nation, to support programs such as digital literacy training, "on-the-ground" awareness and content. None of the funding would go to private entities — instead, those organizations have agreed to contribute $26.5 million in “cash and in-kind match,” Eisner said. “We have not counted the large discount in broadband service as part of this match, so the coalition is effectively brining much more to the table.”

The proposal calls for service providers to offer discounts for just two years, but Eisner said a substantial percentage of low-income participants would likely continue service after the discounts ended. “Once you give them broadband, they realize the value over time,” said Eisner, who cited an AT&T study that found that 46% of low-income participants in a similar trial purchased service at market rates after the trial ended.

One Economy Corporation, a global organization that focuses on bringing technology to low-income people, would take responsibility for pre-qualifying low-income users receiving the discounted broadband services with the assistance of U.S. Housing and Urban Development. “We have an in-take mechanism and people would be verified through a HUD database,” Eisner said.

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