Comcast's Phila. deal would aid low-income customers

Comcast Corp.'s proposed cable-TV franchise renewal could save low-income senior citizens between $15 and $83 a year on their cable-TV bills - if they apply for a new discount - and expand discounted Internet services to low-income residents.

The deal also will give the Philadelphia cable giant the legal right to operate over the next 15 years in the city, which produces an estimated $550 million a year in revenue and $200 million in annual profits for the firm, based on city and company financial data.

City Council is set to vote on the franchise renewal Thursday. Council's public property committee approved it last Thursday.

Councilman Bobby Henon, chair of the committee, said Tuesday that this was the "best deal that the city could get and the best franchise deal in the country." He said he expects it to pass and has heard of no opposition against it.

The renewal "maxed out" the benefits allowed under federal cable legislation, which includes a 5 percent franchise fee that Comcast pays the city for TV revenue, Henon said. Cable firms are not required by federal law to pay franchise fees to cities for Internet services.

Comcast on Tuesday declined to comment on its Philadelphia revenues and profits from the triple play of TV, Internet, and phone services. The profits would be before the company paid taxes, debt service, interest, depreciation, and other charges.

The renewal's total value to the city through franchise fees, network upgrades, discounted service for low-income families and seniors, and other "voluntary commitments" is $480 million over 15 years, Comcast spokesman Jeff Alexander said.

City officials say they leveraged the renewal into side agreements in which Comcast agreed to expand its Internet Essentials program to low-income individuals and seniors, and add the senior citizen discount for TV service.

Philadelphia - the poorest of the nation's 10 largest cities - consistently ranks below national averages in Internet access, part of the so-called digital divide between poor people without Internet service and wealthier families with Web access.

There are about 130,000 city households with incomes below $35,000 without Internet service, or about half of the households in that demographic, according to 2014 Census Bureau estimates.

Comcast's core program to close the digital divide, Internet Essentials, has been open only to families in Philadelphia with schoolchildren.

The proposed renewal will open the $9.95-a-month program to low-income senior citizens and individuals without children.

Many details remain to be worked out. Comcast has said it will fund the project for low-income individuals with up to $2.7 million over five years. An official with direct knowledge of the talks said the program would initially help about 1,000 individuals but is expected to grow.

"This will be what people look at when they are organizing their franchise-renewal agreements in the future," Deb Socia, executive director of the nonprofit Next Century Cities in Washington, said of the renewal. "It's wonderful that it's [Comcast's] hometown. They should take care of the people in the neighborhoods in the city where they have their headquarters."

The new programs will not be available in the Pennsylvania suburbs or South Jersey unless towns there negotiate for them.

Angela Siefer, director of the advocacy group National Digital Inclusion Alliance, said she did not know if the agreement would "move the needle" on higher Internet penetration among low-income families in the city, given the vast need and the limited funding. But she added, "There is no one big fix, so we have to go at it piece by piece."

For decades, cable-TV bill hikes have outpaced inflation and Social Security cost-of-living adjustments.

According to the proposed renewal, Comcast will offer low-income seniors in the city 10 percent discounts for two cable-TV packages: "limited basic" and "digital starter."

Limited basic is a package of basic over-the-air broadcast TV networks and government and public-access channels. Digital starter includes broadcast-TV networks, cable channels, access to pay-per-view, On Demand, and music.

Comcast's limited basic prices vary by areas within the city, with residents paying in 2016 between $12.80 and $20.95 a month.

A 10 percent discount on $12.80 would be a savings of $15.36 a year while 10 percent off $20.95 would be $25.08 a year.

Digital starter costs $69.95 a month and a 10 percent discount would be a savings of $83.94 a year.

bfernandez@phillynews.com

215-854-5897 @bobfernandez1