Low-income families offered cheap broadband, PCs

Many U.S. cable providers will offer broadband service for US$9.95 a month and an e-recycler will offer $150 PCs and laptops to low-income families in an effort to bring the benefits of broadband to more people across the country.

Members of the National Cable and Telecommunications Association (NCTA), including Comcast, Cox Communications, Time Warner Cable and Cablevision, will offer the discounted broadband service, without installation fees or modem rental fees, the organization announced Wednesday. E-recycler Redemtech will offer refurbished PCs and laptops for $150, plus sales tax.

Families that are eligible for free lunches in the U.S. Department of Agriculture's National School Lunch Program will be eligible for the discounted broadband service and computers. This year, a family of four with income of less than $29,055 is eligible for free meals in the USDA program.

Many U.S. residents are struggling because of a continued soft economy, Michael Powell, NCTA's president and CEO, said at a launch event in Washington, D.C. "As every parent and teacher knows, a strong education and technical skills are essential ingredients for any child hoping to realize the promise of the American dream," he said. "Increasingly, as we all know, the path to opportunity and prosperity must travel, in some way, along the information superhighway."

Cable companies are "proud" to answer a call from FCC Chairman Julius Genachowski to provide low-cost broadband to low-income families, Powell said.

The discounted broadband service and computers are part of a new program, called Connect to Compete, launched in October by a coalition of IT vendors, online companies and nonprofit organizations, with support from the U.S. Federal Communications Commission.

About 100 million U.S. residents don't subscribe to broadband service, according to the FCC. More than 10 million students eligible for USDA free lunches, in approximately 5.5 million homes, do not have home broadband, the NCTA estimated. The reduced-cost broadband program will start in the 2012 school year.

The new program could bring broadband to up to 25 million U.S. residents, the FCC said.

The $150 computers will have duo-core processors and 4GB of RAM, and will include the Windows 7 operating system and Microsoft's Office suite.

In addition to the reduced-cost broadband and PCs, Morgan Stanley will offer affordable financing options for families that cannot afford to pay $150 up front for a computer.

Genachowski praised the new program, saying it will help close the digital divide in the U.S. The program, offering broadband at a discount of about 70 percent, will be a "game changer," he said.

"It used to be that being disconnected was an inconvenience," he added. "Not any more. Whether we're talking about jobs, education, or health care, in this day and age, getting online is a necessity, not a convenience."

The announcement came the same day that the U.S. Department of Commerce's Economics and Statistics Administration and National Telecommunications and Information Administration (NTIA) released a report saying that 68 percent of U.S. households subscribe to broadband service, and 3 percent have dial-up service. In 2009, 64 percent of U.S. households had broadband service.

While broadband adoption is growing, it's disconcerting that nearly a third of U.S. homes do not have broadband, said NTIA Administrator Lawrence Strickling.

Ethic minorities, residents of rural areas and low-income families had lower adoption rates than the national average, the agency said.

While 81 percent of Asian households and 72 percent of white households had broadband at home, 57 percent of Hispanic households and 55 percent of black households had broadband. Seventy percent of urban households had broadband at home, compared to 57 percent of rural households.

About 43 percent of households with annual incomes below $25,000 had broadband access at home, while 93 percent of households with incomes exceeding $100,000 had broadband, the agency said. The statistics are based on an October 2010 survey by the U.S. Census Bureau.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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