It’s a done deal. AT&T’s acquisition of DirecTV has been officially blessed by the Federal Communications Commission. While you may not care about the corporate machinations of two corporate giants, you are sure to be interested in one very important detail of the merger:
AT&T will be required to offer high-speed internet service for perhaps as little as $5-10 per month to any consumer who qualifies for food stamps (also known as SNAP).
Here’s how the FCC described the requirement in its official announcement:
Discounted Broadband Services for Low-Income Subscribers. While finding that the availability of better and lower priced bundles of video and broadband service is a potential benefit of the merger, the Commission also concludes that the public interest requires us to ensure that a bundle of video and broadband services is not the only competitive choice for low-income subscribers who may not be able to afford bundled services. The Commission accordingly requires as a condition of the merger that AT&T-DIRECTV make available an affordable, low-price standalone broadband service to low-income consumers in its broadband service area.
That, of course, is just as vague and unrevealing as you would expect of a bureaucrat-written document. Luckily, in its proposal to the FCC and in a press release issued immediately after the merger was approved, AT&T outlined two great, new plans designed to benefit low income families.
The first plan would offer DSL-based service with speeds up to 5 Mbps for $10 a month for 12 months. At the end of that introductory period, the price would increase to $20 a month.
The second plan would be offered in areas where AT&T’s infrastructure is inadequate for those higher speeds. In those areas AT&T would offer 1.5 Mbps internet service for $5 a month for the first year. After the promotional period ends, the price would rise to $10 a month.
This program is very similar to ones offered by Comcast when it acquired NBC Universal and by CenturyLink when it acquired Qwest. The former promised to develop Internet Essentials and the latter promised to acquire Internet Basics if their bids were approved.
AT&T has proposed that these yet-to-be-named low-income internet service plans will expire after four years.
Who qualifies for this program? Only those who are eligible for the U.S. Government’s Supplemental Nutritional Assistance Program (SNAP), also known as Food Stamps. Please note that the rules don’t say that you must actually receive food stamps — just that you are eligible to receive them. Eligible consumers will be required each year to prove that they still qualify to participate in the program.
AT&T’s internet service is available in 21 states: Alabama, Arkansas, California, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nevada, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee, Texas, and Wisconsin.
The company’s largest markets are Houston, Chicago, Los Angeles, Miami, San Antonio, Dallas, and San Diego. AT&T U-verse internet service covers a larger geographic area than any other DSL broadband provider and is available to an estimated 126.6 million people.
California has the most residents participating in SNAP, Texas is second, Florida is third, Illinois is fourth. Mississippi has the highest percentage of residents on food stamps, Oregon is fourth, Tennessee is ranked fifth and Louisiana is ranked seventh. So whether you look at it from total number of food stamp recipients or percentage of residents on food stamps, it’s easy to see that AT&T serves areas that desperately need this program.
We firmly believe that competition drives companies to treat the customers better. With that in mind, it may be worth noting that AT&T and Comcast will both be offering their low-income internet programs in Alabama, Arkansas, California, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, Ohio, South Carolina, Tennessee, Texas, and Wisconsin. It’s difficult to determine in exactly which cities and towns the two programs will overlap, but we expect the low-income customers in those areas to benefit most of all.
Let’s conclude with a personal note inserted at the end of this article by the editor of CheapInternet.com:
“As a current AT&T customer and as a former DirecTV customer, I speak from personal experience. DirectTV is one of the worst companies I have ever dealt with, but AT&T is one of the best. Let’s hope that the customer service culture at AT&T wins out over that of DirecTV. If not, even this program developed with the best of intentions will surely turn into a customer service fiasco through which no one should have to suffer.”
Uh-oh. Looks like the editor got up on the wrong side of the bed this morning.