Comcast expands low-income Internet service as merger review nears

A Comcast sign is shown on the entrance to its store in San Francisco, California February 13, 2014. REUTERS/Robert Galbraith

By Alina Selyukh and Liana B. Baker (Reuters) - Comcast Corp on Tuesday said its discounted Internet service for low-income families will be available indefinitely, a move that should please U.S. regulators as the company seeks approval for its $45.2 billion takeover of Time Warner Cable. Internet Essentials is Comcast's broadband Internet program for some low-income families with children. It costs $9.95 a month and offers a discount with other perks. The program has enrolled about 300,000 families since it launched in 2011. Some 2.6 million U.S. families are eligible, according to Comcast. It was originally expected to run through the end of the 2013-2014 school year. As part of Comcast's proposed merger, the offer will be available in 19 of 20 largest U.S. cities as Comcast expands into Time Warner Cable's markets, Comcast executives said, calling Internet Essentials the largest broadband adoption program by both geography and subscribers. "I don't think there's a broadband adoption program in the country, private or government, that has the reach or has had the impact of Internet Essentials," said Comcast Executive Vice President David Cohen. The program has become one way Comcast, the largest U.S. cable provider, is fulfilling a promise of broader deployment and adoption of broadband it made to federal regulators to gain approval for its NBC Universal merger in 2011. It could become a bargaining chip as Comcast seeks federal approval of its $45.2 billion acquisition of Time Warner Cable Inc. The U.S. Justice Department, which reviews antitrust concerns, and the Federal Communications Commission (FCC), which studies whether deals are in the public interest, have yet to review the proposed merger. "I think the FCC's going to find that to be a very appealing public-interest benefit," Cohen told reporters on February 13, after the companies announced merger plans. Cohen said on Tuesday that in discussing the merger at upcoming meetings in Washington, he planned to emphasize, among other issues, the expansion of Comcast's commitments, such as to low-income broadband, children's programming and local news, to Time Warner Cable's markets. CONSUMER INTEREST CONCERNS Since its launch, Comcast has expanded the program to serve not only families with children who qualify for free or cheaper school lunches, but also homeschoolers and those studying at parochial, private and cyber schools. Only families who had not been Comcast customers within 90 days of applying can qualify for the program. Public-interest advocates and some lawmakers have started sounding concerns that Comcast has not fully complied with the promises it made in 2011, including those aimed at improving the services for low-income customers. Comcast rejected those claims and said in an annual report last week that it delivered, and in some cases over-delivered, on those promises. The FCC and the Justice Department were expected to launch their reviews of the Comcast-Time Warner Cable deal at the end of the month, after Comcast submits required documents. The reviews were likely to take months to complete. The U.S. Senate Judiciary Committee planned to hold a hearing on the merger on March 26. (Reporting by Alina Selyukh and Liana B. Baker; Editing by Amanda Kwan)