Cheaper broadband coming to low-income families

WASHINGTON (Reuters) - Cable companies will offer high-speed Internet service to low-income families in the United States at around a fifth of the national average price, the top communications regulator said on Wednesday.

Families who qualify for free school lunches will be able to sign up for $9.95 a month high-speed Internet services from top cable providers.

Further, families eligible for free or reduced-price school lunches will be able to buy low-cost computers.

Specifically, households need at least one child that participates in the National School Lunch Program to be eligible for the reduced-cost high-speed Internet service.

The initiative is part of the Federal Communications Commission's effort to extend affordable broadband Internet access across the United States.

A third of Americans, some 100 million people, do not have high-speed Internet services in their homes, with cost being among the top barriers to broadband adoption.

A Commerce Department report on U.S. broadband adoption released on Wednesday found that only 43 percent of households with annual incomes below $25,000 had broadband access at home, while 93 percent of households with incomes exceeding $100,000 had broadband.

"We think we're going to move the needle on the broadband adoption gap," FCC Chairman Julius Genachowski said of his hopes for the new commitments made to the Connect to Compete initiative launched last month.

Connect to Compete had already garnered commitments from nonprofit groups and companies including software leader Microsoft Corp and retailer Best Buy Co to help boost digital literacy and computer skills.

Now the public-private initiative will see cable providers including Comcast Corp, Time Warner Cable Inc and Cablevision Systems Corp offer Internet service at a fraction of the national average price of $45 a month, an FCC official said.

Eligible families will be able to sign up for the service during a three-year period starting in the spring in some areas, with the offer going nationwide by next September to coincide with the school year.

"Providing our children with a quality education requires much more than the teaching and learning that takes place inside of the classroom," said Michael Powell, head of the National Cable and Telecommunications Association.

Families can enjoy the discounted rate for two years.

The FCC estimates the retail value of the discounted high-speed Internet service being made available to roughly 25 million Americans at around $4 billion.

Redemtech Inc will offer a $150 refurbished laptop or desktop with monitor to eligible families. Microsoft has committed to building a new series of $250 laptops and desktops for low-income students and families.

Morgan Stanley also joined the Connect to Compete initiative, offering to help develop a microlending program to help families with the upfront costs of PC ownership.

"Securing America's competitiveness in a global economy means making sure that every American has access to high-speed broadband Internet and is able to take advantage of it," President Barack Obama said in a statement supporting the initiative.

(Reporting by Jasmin Melvin, editing by Gerald E. McCormick)