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LEGISLATION COMMITTEE

Meeting Date:	02/05/2015
Subject: Recommendations to FCC for corporate consolidation of Comcast, Time Warner Cable, Charter Communications
Submitted For:	John Gioia, District I Supervisor
Department:	Board of Supervisors District I
Referral No.:	2015-01
Referral Name:	FCC Recommendations for corporate consolidation of Comcast, Time Warner Cable, Charter Communications
Presenter:	Lara DeLaney	Contact:	Lara DeLaney, (925) 335-1097

Information

Referral History:

California Emerging Technologies Fund has provided a draft letter to the Federal Communications Commission regarding the proposed Comcast acquisition of Time Warner Cable and exchange of service territory with Charter Communications and its impact on the "Digital Divide," for discussion and possible action by the Legislation Committee.

Referral Update:

Today, 25% of all California and U.S. households do not have high-speed Internet access at home. This impacts the quality of life and economic vitality in all of our communities. It means that we are unable to reach 25% of our residents with public information and government services online that could save us operating costs. And, it excludes 25% of our constituents from participating in today’s democracy.

Federal law says there must be a finding of public benefit to approve the proposed Comcast acquisition of Time Warner Cable and exchange of service territory with Charter Communications. This review process provides an opportunity for the FCC to hold Comcast accountable to improve its Internet Essentials program and achieve acceptable performance. Comcast launched Internet Essentials, a $9.95-a-month broadband plan for families of students eligible to receive free or reduced school lunch, to secure federal government approval to purchase NBC Universal in 2010. While this is a very good price point for affordability, the program currently is failing to reach millions of Americans who could benefit most from an affordable connection to the Internet.

In 3 years, Comcast has signed up only 14% of currently-eligible households because of several problems with the subscription process and the lack of sincere partnerships with trusted organizations that know how to reach and engage the key populations. Conservative analysis shows that an estimated 1.375 million California households would be eligible for Internet Essentials in the new combined service territory of approximately 3.7 million households. That will include more than 3 million K-12 students—87% of all California students qualifying for free-or-reduced lunch. A significant portion of the remaining 13% of California students will live in areas served by other companies planning or considering merges.

The draft letter to the FCC proposes five recommendations for the Comcast-TWC-Charter consolidation:

1. Include All Low-Income Households: Extend Comcast Internet Essentials to all low-income households, not just those with school children. Require Charter and all companies resulting from corporate mergers or acquisitions to offer a similar affordable offer to all low-income households. Low-income seniors, people with disabilities and returning veterans are not covered today.

2. Set Performance Goals: Set a goal for Comcast to increase Internet Essentials subscribership for expanded eligible households to reach 45% in 2 years, and to continue the program until 80% adoption is achieved in all low-income neighborhoods in each major market within the combined service territories. Set a similar goal for Charter and all other companies.

3. Capitalize an Independent Fund and Coordinate with States: Work through and collaborate with states that have an adopted plan to close the Digital Divide. In states, such as California, that are major Comcast-TWC markets and have a strategic plan to close the Digital Divide, require Comcast to dedicate a sufficient amount to an independently-managed fund to engage experienced community-based organizations, libraries and schools to assist in achieving the 45% subscription sign-ups and overall 80% adoption rate. Apply this same approach to states that become dominant Charter markets. The management of such a fund should be selected by a state agency through an open competitive process.

4. Establish an Advisory Oversight Committee: Establish a national advisory oversight committee to provide feedback and input to the FCC in monitoring performance and progress. The program has been riddled with problems and there is a lack of transparency on data regarding eligibility and progress. There must be a reliable process and mechanism for public accountability.

5. Offer Stand-Alone Internet Service: Require Comcast, Charter and other merged companies to offer all consumers the opportunity to purchase stand-alone Internet access at a reasonable rate instead of being forced to pay for bundled services.

The draft letter is attached for discussion and consideration by the Legislation Committee.

Recommendation(s)/Next Step(s):

RECOMMEND to the Board of Supervisors a position of "Support" on the local government officials letter to the Federal Communications Commission regarding the corporate consolidation of Comcast, Time Warner Cable and Charter Communications with recommendations to extend high-speed Internet access to all low-income households, set performance goals, collaborate with states to close the Digital Divide, establish a national advisory oversight committee and offer stand-alone Internet service.

Fiscal Impact (if any):

No fiscal impact to the County from this advocacy effort.

Attachments
Draft letter to FCC