Comcast may double speed of Economy high-speed Internet tier

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Comcast (Nasdaq: CMCSA) appears poised to double the speed of its $39.95 monthly Economy high-speed Internet tier from 1.5 Mbps to 3 Mbps, following plans to increase the speed of the broadband package it is offering to low-income homes.

The MSO said it will double the speed offered to homes that qualify for its low-income Internet Essentials program during the second quarter to 3 Mbps. About 41,000 families in Philadelphia, Atlanta, San Francisco, Denver and other Comcast markets have signed up for Internet Essentials since last summer. In addition to doubling the speed it offers Internet Essentials subscribers, the company will expand availability to an additional 300,000 homes, making it available to 2.3 million low-income homes nationwide.

With Comcast planning to double the speed of Internet Essentials during the second quarter, it's likely that it will increase the speed for its Economy tier at the same time. When Comcast introduced its Internet Essentials program last year, it offered subscribers the same 1.5 Mbps download speed it offered through its Economy tier. Thus, it's likely the carrier will boost the speed of Economy in conjunction with increasing the speed of Internet Essentials. "That's not something we can confirm at this time," Comcast spokesman Charlie Douglas said when asked whether Comcast would increase the speeds it offers to subscribers of its Economy package.

Comcast offers subscribers in Washington, D.C., and other markets several tiers for high-speed Internet, including a $49.95 monthly Performance Starter tier and a $72.95 monthly "Blast!" tier that offers download speeds of 25 Mbps. The costs for its high-speed service are reduced when customers combine the service in bundles of digital cable and voice products.

While Comcast disclosed the number of subscribers who have signed up for Internet Essentials for the first time on Tuesday, the MSO doesn't detail the number of subscribers who take faster tiers. Comcast is the largest U.S. broadband provider, counting about 18 million cable modem customers. It picked up 261,000 high-speed customers during the third quarter.

One of the challenges the MSO has faced in signing subscribers to its Internet Essentials program is the fact that it is not available to previous customers who have not paid their bills. However, Comcast executive vice president David Cohen told reporters that low-income families with unpaid bills could still joint the program, noting that the MSO could work out payment plans and "compromises" with subscribers with unpaid bills.

"We're in this to sign people up," Cohen said on a conference call. "We're not in this to not sign people up," he added.

Several other cable MSOs have announced plans to offer similar discounted broadband access to low-income homes as part of the FCC's "Connect to Compete" initiative, including Cablevision (NYSE: CVC), Time Warner Cable (NYSE: TWC) and Charter Communications (Nasdaq: CHTR). Cohen said Comcast doesn't have a specific goal in mind for Internet Essentials subscriber growth.

"Now that we've got 41,000 families signed up, our goal is to do better," he added.

For more:
- see Comcast blog post

Special Report: Low-cost broadband access: How do MSOs compare?

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