http://www.nytimes.com/2016/10/12/technology/free-broadband-initiatives-for-poor-and-rural-areas-with-eye-on-future.html 2016-10-11 15:45:14 Free Broadband Initiatives for Poor and Rural Areas, With Eye on Future Tech companies like Sprint, Comcast and Facebook are increasingly working to make high-speed internet available to every American. === WASHINGTON — There is an axiom in technology: New products typically go to wealthy customers first, before prices eventually fall to reach the masses. With broadband now classified as a utility, telecom and tech companies including Those goals were on display Tuesday, when Sprint announced that it plans to give one million low-income high school students a free device and a free high-speed data plan until graduation. Facebook is also working to bring to the United States a service known as Free Basics, which gives people free access to certain websites, including Facebook. Comcast recently loosened requirements for its low-cost broadband service, expanding it to anyone in public housing. These moves go toward closing what has been Low-income broadband programs have been vital to closing the digital divide, where half of all low-income Americans lack broadband, said Mignon Clyburn, a commissioner at the Federal Communications Commission. “Lowering the price for service has been instrumental in bringing millions online,” Ms. Clyburn said. Free and low-cost broadband programs have been around for a while, with Comcast rolling out one called Internet Essentials in 2011, Google offering free broadband in public housing, and Dell and Microsoft providing free or discounted devices to schools. But the new initiatives could reach much larger populations and are directed toward specific digital divide problems, such as the struggle for children without broadband at home to complete their homework. Yet while telecom and web companies cite altruism as propelling free or low-cost broadband programs, what is often left unsaid are the benefits the services bring to the companies. It’s part of a textbook business strategy known as “loss leaders,” when a company provides discounted or free goods to get customers to buy more once they are in the store. The strategy is increasingly important for the telecom industry, where growth has slowed and new broadband customers are harder to find. Internet service providers “are trying to go after those folks who are willing to pay less, but not to appeal to those willing to pay more,” said Some of the companies acknowledged the business strategy involved in providing low-income products. But Sprint’s chief executive, Marcelo Claure, said the priority has been to work on a problem that telecom firms are best positioned to help solve. “The internet is one of the few things that doesn’t discriminate, but the one thing that does discriminate is who can get online and who can’t,” he said. Sprint, the fourth-largest mobile carrier in the United States, typically charges customers about $60 a month for high-speed internet service. In the last six months, Mr. Claure, who emigrated from Bolivia as a college student, has made the digital divide an issue within the firm and assembled tech and nonprofit partners around the effort. The mobile carrier is particularly focused on bridging the “homework gap” that exists for students without broadband, which Mr. Claure said particularly hurts low-income African-American and Hispanic children. “Being a Hispanic C.E.O., this bothers me,” he said. Sprint’s new program, called the The program will be rolled out in seven to 10 cities, including Kansas City, Mo., early next year, before becoming more widely available in the 2017-18 school year. Nonprofits including My Brother’s Keeper Alliance and EveryoneOn will recruit students for the nine-year program and Sprint will use its retail stores and customer service representatives to sign up and serve the students. Mr. Claure plans to introduce the program to President Obama in a meeting on Tuesday in Greensboro, N.C., along with My Brother’s Keeper Alliance, of which Mr. Claure is a board member. The White House has The new program’s cost to Sprint is minimal because it doesn’t require additional network upgrades; instead, it would be the equivalent of adding more cars to a highway, the company said. And there is social value for Sprint in doing this. “People will look at Sprint as a good guy,” Mr. Claure said. “Brands that create social value by making a meaningful difference in people’s lives are in a stronger position to attract new customers.” Comcast has also expanded its Internet Essentials program, which began by serving families with children in free- or reduced-cost lunch programs. It now targets David L. Cohen, senior executive vice president of Comcast, said in a statement, “The purpose of the program is not to convert Internet Essentials customers into paying customers.” More recently, Facebook has been working to persuade United States officials to approve its The Silicon Valley company, which has been vocal about connecting everyone on the globe to its site, has already rolled out Free Basics in In the United States, Facebook has met with several members of the F.C.C. and officials at the White House to assure them that the service won’t disadvantage or block other websites, according to several people who have been at the meetings. The Washington Post Facebook did not offer a timeline for a rollout of Free Basics in the United States. ”While we have nothing to announce, Facebook’s mission is to connect the world, and we’re always exploring ways to do that, including in the United States,” the company said in a statement.