Comcast Faces Fourth Year of Naked Broadband Service Under FCC Consent Decree
Comcast agreed to sell unbundled broadband service for a fourth year because it faced allegations it violated conditions of the FCC’s OK of the cable ISP’s purchase of control in NBCUniversal by not telling customers widely enough about the naked cable modem service. The naked broadband condition was extended to Feb. 21, 2015, in an Enforcement Bureau consent decree where Comcast also agreed to voluntarily pay $800,000 to the U.S. Treasury and train employees so they know about the product that costs almost $50 monthly. It’s a “historic settlement,” said Bureau Chief Michele Ellison, who signed the decree (http://xrl.us/bnc4p3) that was released late Wednesday.
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The deal ends a bureau investigation of allegations the cable operator wasn’t complying with the conditions of last year’s order approving the multibillion deal in which the company had to sell for at least three years naked cable modem service. The Comcast/NBCUniversal order required that a retail broadband service of at least 6 Mbps downstream be sold for no more than $49.95 a month, with the service given “prominence equal to that of bundled offerings” on the computer screens of customer service representatives, the bureau said. It began an investigation after getting “information raising potential concerns about the extent of Comcast’s compliance with the Condition,” issuing the first of three letters of inquiry in March 2011.
The problem was that for almost two months, in the early part of that year from when the Performance Starter product began being offered, some rate cards lacked information on the service, according to the bureau. It said at the Feb. 21, 2011, start of that service “Comcast did not have a distinct ‘direct link’ to its standalone Broadband Internet Access Service options, including Performance Starter, from its ‘Current Customer Offers’ web page.” That too was fixed within two months of when the service began being offered, the consent decree said. Comcast made “efforts to comply with the Condition, and its full cooperation with the Investigation” was received, the settlement said.
"Compliance with Commission orders is not optional,” FCC Chairman Julius Genachowski said in a written statement (http://xrl.us/bnc4va). “The remedies announced today will benefit consumers and foster competition, including from online video and satellite providers, by ensuring that standalone broadband is truly available in Comcast’s service areas.” The deal’s an “unprecedented year-long extension of the merger condition,” the commission said in a news release. The “huge win for consumers ... reinforces and extends the terms of the Commission’s merger order to ensure that consumers have reasonably priced standalone broadband Internet options, as the Commission originally intended,” Ellison said: The extension of the condition, voluntary payment and “robust compliance plan send a clear message to the American public and the communications industry that the FCC will vigorously enforce its merger conditions, to the ultimate benefit of consumers.”
"Comcast has incorporated the extensive commitments and conditions from the NBCUniversal transaction into the DNA of our business practices, including the commitment to offer standalone broadband Internet,” a spokeswoman said. “We are proud of our standalone broadband offering of ‘Performance Starter’ service -- we rolled this product out in just one month, the fastest Comcast has ever deployed a brand new service simultaneously throughout its footprint. As is often the case with services associated with government orders, the FCC had questions on how the service might have been rolled out in a different or even better way.” Comcast has faced criticism from others it’s not living up to terms of the FCC or Justice Department orders allowing it to buy control of NBCUniversal from General Electric, including over placement of the Bloomberg financial-news cable channel and that it exempts some content sent to Xbox videogame consoles from broadband usage limits.
The ISP must follow a compliance plan that includes training all customer service representatives within three months through an “online refresher” about the Performance Starter product, the decree said. “Comcast agrees that the linkable web page devoted exclusively to describing (e.g., price and speed) and permitting online purchase of all retail Broadband Internet Access Service standalone options required under the Condition will continue to be equally available to both new and existing Comcast subscribers,” the settlement said. “During 2013, Comcast shall conduct one additional major advertising promotion of its standalone retail Broadband Internet Access Service offering beyond the one required by the Condition.” The cable operator must submit annual compliance reports through 2016 under the deal. Ellison said she wanted to acknowledge the company’s “cooperation and willingness to ensure that the benefits of the merger condition are fully realized.”