Cable Has Spent $200 Billion, Powell Says, as Criticism and Industry Work Continue

Efforts to close what’s called the digital divide continue at NCTA member companies including Cox Communications, while a critic of the industry sought wider eligibility for broadband adoption programs, our followup interviews found. Cox’s San Diego and Macon, Ga., markets had the highest subscribership for the $9.95 monthly product -- with maximum download speeds of 1.5 Mbps and uploads of about 384 kbps -- of any operator participating in the fall in C2C, said a Cox spokeswoman. She said that after getting free installation and a free cable modem and a deal not to boost prices for two years, “they are treated just as any other customer who would sign up for” the starter-tier package and would in turn get any speed increases for that product. C2C is sold in all Cox systems as of April, said the spokeswoman, declining to provide subscriber figures for the product. Other C2C partners include Bright House Networks, Mediacom, Suddenlink and Comcast, which agreed to sell a similar product called Internet Essentials as it got FCC approval to buy control of NBCUniversal in 2011.

To be a bigger success, broadband deployment initiatives should expand to include a wider array of families so it’s not just those with kids getting subsidized school lunches, said Free Press Research Director Derek Turner. The product costing about $10 monthly now should instead be free, he said. “If they were really concerned about getting everyone online, they would offer a free broadband product.” At $10, cable ISPs are “still making a huge profit,” said Turner, whose group wants broadband service to be classified a Title II telecom service. But $10 “is an attractive price point” for broadband, he said. Increasing programming prices (CD June 10 p1) have meant cable operators’ profit margins for selling video have declined, and to make up for that the companies have been raising prices for broadband and for bundled packages, said Turner.

Average peak connection speeds have tripled in the past five years, Powell said in the opening speech. “But like everyone, we want to deliver more. We want every American to have access to broadband.” Cable operators sell broadband to rich and poor alike, and those in rural and urban areas, he said. “We don’t cherry pick.” The operators “serve everyone throughout our footprint,” Powell said. Eighty-five percent of homes can buy broadband with speeds of at least 100 Mbps, he said. “Many people like to denigrate” U.S. broadband compared to other countries like France and Latvia that are smaller geographically and population-wise, said Powell. “Our challenges are different, but our results are nonetheless impressive.” Ten of the world’s top-15 speed regions are in the U.S., he said.

Cox emphasizes how getting broadband relates to a potential subscriber’s life, said the spokeswoman. “Relevance is a really important factor.” There “are definite positive impacts from the Internet that can help both with educational outcomes as well as economic improvement.” Apart from price, relevance is a “big piece” of digital-divide barrier, she said. Other individual operators and NCTA had no comment for this article.

NCTA members in practice aren’t fully committed to an open Internet, said Turner. He cited Comcast’s decision to not count toward since-discarded bandwidth caps the company’s own video sent to Xboxes. “It’s a little bit early for the NCTA and cable operators to say they're on the side of angels when it comes to net neutrality,” said Turner. Much of operators’ spending has gone toward set-top boxes and cable modems, not broadband service improvements such as by connecting fiber directly to homes, he said. “Cable hasn’t expanded their rural deployments at all.”