By Lillian Rizzo and Drew FitzGerald 

Internet companies like Charter Communications Inc. and Verizon Communications Inc. provided hundreds of thousands of free service to cash-strapped Americans this spring after the coronavirus pandemic sent millions of workers and students home. The relief came with an expiration date: July 1.

Several broadband and cellphone carriers are free to start cutting off past-due accounts and charging late fees after the Federal Communications Commission's Keep Americans Connected program expired on Tuesday. The federal telecom regulator secured voluntary commitments from hundreds of internet providers in March, when the disease outbreak forced millions of Americans to work from home and put millions more out of a job.

The program was never designed to be a permanent fix. Some internet companies told regulators they couldn't foot customer bills past June, though there is still no end in sight to the twin health and economic crises that first prompted the pledge. FCC Chairman Ajit Pai told lawmakers last week that Congress will need to act to help keep service affordable.

"The Keep Americans Connected Pledge has been a success, and the FCC thanks all of the companies that have stepped up to the plate to do the right thing during this national emergency," an FCC spokesman said. "But broadband and telephone companies, especially small ones, cannot continue to provide service without being paid for an indefinite period of time."

Gigi Sohn, a former FCC official under Democratic Chairman Tom Wheeler, said internet providers had no legal obligation to continue the relief programs because the current chairman ceded the oversight authority it would need to do so.

"What they promised was the bare minimum," she said. "This was the best he could get the industry to promise."

The debate has shifted to Capitol Hill, where lawmakers are proposing several measures to make internet access more affordable during the pandemic. House Democrats in May proposed a bill that would establish an emergency broadband fund to help qualifying households afford service. Another bill proposed by Senate Democrats pitched similar provisions. It isn't clear when either bill might become law.

Under Keep Americans Connected, companies agreed to waive late fees and avoid disconnections for nonpayment. Some cable providers offered free Wi-Fi hotspot access in business zones. Several companies also offered free or discounted service to households with students and teachers, though those offers weren't explicitly required under the pledge.

Most stay-at-home orders were instituted in mid-March. During that time, Altice USA Inc.. added about 9,000 free 60-day broadband accounts; Comcast Corp. signed up 32,000; and Charter had 119,000 households sign up.

Free 60-day Comcast internet access is only available to those that qualify for Internet Essentials, a low-income program that normally costs $9.95 a month, plus tax. The company extended that offer through 2020.

Charter expects to have signed up more than 400,000 households in total.

At the outset, long call wait times created hurdles for some users who sought immediate access to free internet service.

Antigone Cox, a seventh-grade teacher in the Bronx, N.Y., said in March she sat on hold for hours for Altice's Optimum service to help two students sign up. She spent two to three days assisting parents.

"It caused issues with some kids that were overwhelmed about what they were missing," Ms. Cox said. Once the parents finally connected with Optimum, it took a few days to have the internet turned on.

Some internet providers said they warned customers that the grace period for waivers and free internet access will end.

"We will also work with those customers who had collection efforts suspended to get their billing current and keep them connected," beginning July 1, a Charter spokeswoman said.

Rather than lose customers faced with high balances from paused payment periods, Charter will consider the debts that piled up during the second quarter -- April through June -- a balance-sheet "write-off," Charter's chief financial officer, Christopher Winfrey, said at a June conference.

About 140,000 residential Charter customers avoided disconnection, and collection efforts paused, during the first quarter. Of that number, 1,000 customers would have normally been disconnected. By the end of April, 67,000 of those customers had "past due balances beyond the point of normal disconnection," according to public filings.

A Verizon spokeswoman said hundreds of thousands of wireless and home-internet customers who signed up for billing relief under the pledge will be automatically enrolled in the telecom giant's repayment program starting Wednesday.

AT&T Inc., which earlier this year reported providing temporary relief to more than 156,000 customers, said cash-strapped subscribers can still call the company for payment options. AT&T also plans to waive the overage fees it charges some home broadband customers for heavy data usage through Sept. 30.

Altice noted in public filings during the first quarter that roughly 6,000 customers weren't disconnected due to the pledge. An Altice spokesman said the company's "goal as the programs conclude is to work with our customers to find solutions and plans that meet their needs and budgets," without giving specifics.

Comcast said it won't disconnect anyone on July 1, with the goal of working with individuals toward the best payment-plan options. The company earlier started offering cash-strapped customers flexible payment plans.

"Our commitment to keeping people connected doesn't end on June 30," said Dana Strong, president of consumer services at Comcast Cable. "We're opening the nation's largest network of public Wi-Fi hotspots for free through 2020, extending our Internet Essentials offer and are working with customers on flexible payment options that work for them."

Write to Lillian Rizzo at Lillian.Rizzo@wsj.com and Drew FitzGerald at andrew.fitzgerald@wsj.com

 

(END) Dow Jones Newswires

July 01, 2020 11:45 ET (15:45 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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