Underline's affordable fiber program challenges incumbents

Fiber network provider Underline Infrastructure announced the launch of its Opportunity Program to provide low-cost, high-tier internet service for households that qualify for the federal government’s Affordable Connectivity Program (ACP).

Underline was founded with a focus on the “poor and worsening state of American critical community infrastructure, and the threat that that poses to the well-being of our country,” said the company’s founder and CEO, Bob Thompson.

As part of the Opportunity Program, Underline will offer the standard tier of service —500/500 Mbps— discounted from $49 to become available at no cost. 

Families qualify for the ACP if their household income is 200% or less than the federal poverty guideline (at or less than $35,775 for a household of 4), or if a family member participates in certain government assistance programs such as SNAP, Medicaid or WIC.

“If a family qualifies for the ACP -- and we're honored to serve them -- we will serve up no less of a performance or a service tier than what a 'paying family' would receive,” Thompson said. “The reality is, when you hand a poor family a new bill of any note, that new bill typically provokes a decision on whether they take on that new bill and cancel mom or dad's cell phone, or whether they can't take on that new bill in order to preserve mom or dad's capacity to have a cell phone and can participate in the employment economy.”

In light of that “Faustian choice,” as Thompson called it, ACP-qualifying families that select the starting tier of service of symmetric 500 Mbps will not be charged on top of the $30 that the federal government reimburses.

Underline’s FTTH symmetric gig offering costs $65 and therefore becomes $35 for ACP families. For all Underline subscribers, including ACP households, installation and equipment is free, there are no data caps and no contracts.

This compares to Comcast’s offerings for ACP-eligible households: speeds “up to 50Mbps” and speeds “up to 100 Mbps.” And Underline claims its offerings are 10-20 times faster on a full fiber connection.

“Large incumbents have historically either neglected to build into poorer neighborhoods or poor demographics, or if they have built into those poor neighborhoods, they serve up very poor service, and that creates an additional barrier to kids in those demographics, being able to achieve in an educational context,” Thompson told Fierce.

Thompson said big incumbents like Comcast are “somewhat famous” for advertising programs that are similar to Underline’s Opportunity Program, but often their programs don’t reach the same outcome.

“They offer a ‘special’ service to those families, by which that means 50/10. Or they'll bill it as 100/20 to try to satisfy the regulators, but they'll throttle the performance. So once again, a poorer family gets something that's worse than the people six blocks over,” Thompson said.

Underline has claimed that based on publicly available information, no other provider offers anywhere near 500/500 Mbps (symmetric), on full fiber, for free.

Instead, most providers do “one or both” of the following: Create a special slower tier of service that they discount to $0, like in the case of Comcast’s 50-100/10 service. Or, a provider will offer their regular plans at $30 off the list price, making them still more expensive than Underline’s plans.

For example, Comcast's gigabit internet in Colorado Springs costs $80 and will become $50 for ACP families. Though, Thompson noted the Comcast speeds are not symmetric and the connection is not fiber to the home, and "there are equipment fees and contracts, too." 

These incumbent providers are able to do so, Thompson said, because they “basically enjoy what amounts to monopoly.”

"We actually call them the 'modern day Ma Bells," he added. 

That said, Thompson touted Underline’s fiber model as “serving up competition and choice for internet providers in a marketplace context for residents or small businesses.”

Underline is building new, privately funded fiber-to-the-premise networks in Colorado Springs and Fountain, Colorado. The company currently has four ISPs already on the marketplace in those communities, three of which are already serving residences and small businesses committed to this pricing arrangement for the ACP (the fourth ISP has not committed to the program because it’s an enterprise provider).

Residents in those Colorado communities can sign up for service with Underline, becoming a client of the company, then pick from multiple internet service providers (ISPs) who offer internet access or other value-added services.

Over time, if they decide to change their ISP over the underlying network, they can “simply do it with the click of a button” within their Underline account, Thompson explained. “So we eliminate the barrier to change and serve up true competition and choice.”

Thompson said Underline is focused “more broadly than just Colorado," adding the company's intent is to "deliver our technology, and to become the country's first nationwide open access network.”

According to him, Underline has multiple additional cities that are well along in development, which the company will be making announcements about over the course of the remainder of the year.

Of the Opportunity Program Thompson said, “Access to the Internet has got to be rendered fast, affordable and fair. We are hoping to get the word out broadly and loudly, that this is the right way to serve American communities."