We’ve been keeping our eye on the FCC’s take on the NBC Universal-Comcast merger with expectation as it would be a game changer for much of the media production and distribution industry. Well, it looks like the FCC and the DOJ have finally OKed the merger, but they’ve done so with a series of demands for the corporation, which include a lot of interesting concessions and requirements.
Amid the deal’s requirements: Comcast must extend broadband deeper into rural areas, offer Internet access at less than $10/mo to a number of households, subsidize netbooks for poor areas/schools, and many more similar to this. Ars Technica covers the terms in much more detail,
The deal requires Comcast to provide “approximately” 2.5 million low income households with high speed Internet for less than $10 a month. To this population the ISP must also sell PCs, netbooks, or similar computer equipment at prices below $150, and offer a host of “digital literacy educational opportunities.”
In addition, Comcast must grow its broadband networks to about 400,000 new homes, get fast Internet service to six additional rural areas, and offer free video and ISP offerings to 600 new “anchor institutions” in low income regions (“anchor” here means schools, libraries, and such).
This can’t be too painful a condition for the company. A little over a year ago the National Cable and Telecommunications Association announced a similar initiative to offer half price ‘Net connections to poor kids. The “Adoption Plus Program” would provide students who qualify for the National School Lunch Program access to two years of 50 percent discounted broadband, a subsidized computer, and free computer classes and technical support.
We’ve seen a lot of strange motion and criticism in this case and the final approval has been well known since before the New Year—but the parties involved, the Federal Communications Commission and the Department of Justice, decided to postpone the final deal until after the holidays. The FCC and DOJ were at first slow on their feet trying to determine the impact of merging Comcast and NBC Universal. Immediately, senators and others began to question the reach of such a deal and what it might mean for the industry, Comcast responded quickly. The final vote happened in December and a lot of rumors flew while the deal went into its final stages and now we’re looking at the means and the ends.
There’s a lot of different facets to examine in this merger—from how this may affect video production/distribution and even some Net Neutrality questions involved—but I am looking at the social impact of the Federal government pushing the Comcast-NBCU merger to help fill the digital divide. Right now, the Internet happens to be the largest marketplace of both ideas and money and a great deal of people are left out either because they’re too far away to benefit from current last-mile solutions or too poor to afford it to their homes.
Both extremely rural areas and the inner-city have a certain number of people who cannot participate in the information culture. Certainly, cell phones have become so ubiquitous that most recent generation homeless kids carry them on their hips—eking out charge at friends’ houses or at coffee shops—but a great deal of the inner-city poor don’t have any access to the Internet except for through hotspots, coffee shops with computer access, and similar.
The United States has terrible broadband penetration verses the rest of the world, sitting near 12th place in 2009 Q2 (according to OECD’s data.) Additional, cheaper broadband access, deeper penetration by cable networks to areas not yet covered, and cheaper computers to the poor will help bridge that divide that exists due to financial and physical limitations. And, doing this, we will open up a lot of opportunities both for the inner-city generations that would like access to this and could use it to enrich their lives and provide further warm bodies for the digital workforce; but also deepen the education of the next generation in what to expect from the future of broadband and the impact of the Internet on our culture.
It looks like these concessions will cost Comcast-NBCU quite a bit in the end. Something to the tune of $572 million. Although, that sounds pretty cheap compared to what they stand to make from the finalization of this merger.