Sprint "announced that it plans to give 1 million low-income high school students a free device and a free high-speed data plan until graduation," Kang writes. "Facebook is also working to bring to the U.S. 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."
About 20 percent of Americans "do not have a mobile data plan or broadband at home because the services are too expensive or they live too far from the networks, among other reasons," Kang writes. Offering those residents free or low-cost internet is nothing new. "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."
"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," Kang writes. "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." (Read more)