FCC Hammers Comcast For Deception and Unreasonable Internet Practices

Expert Opinion, Net Neutrality August 1st, 2008

, Publisher, BroadbandBreakfast.com

News Analysis

WASHINGTON, August 1 – The Federal Communication Commission’s enforcement action against Comcast can be seen either as a limited response to a company’s deceptive practices, or a sweeping new venture by the agency into regulating internet policy.

In ruling against Comcast on Friday, the agency ordered the company to “disclose the details of its discriminatory network management practices,” “submit a compliance plan” to end those practices by year-end, and “disclose to customers and the [FCC] the network management practices that will replace current practices.”

At issue in the decision was whether Comcast had engaged in “reasonable network management” practices when it delayed and effetively blocked access to users of BitTorrent, a peer-to-peer software program.

Although BitTorrent had already settled its complaints with Comcast, FCC Chairman Kevin Martin said that FCC action was necessary because the complaint had been brought by Free Press and Public Knowledge, two non-profit groups. The FCC did not impose a fine.

Martin said that he viewed the agency’s decision to punish the cable operator as a quasi-judicial matter: a “fact-intensive inquiry” against a specific company that it found to have “selectively block[ed]” peer-to-peer traffic.

That interpretation would make the FCC action more limited. A statement by AT&T Senior Vice President Jim Cicconi – that “the FCC decided to handle the matter on its own unique facts, setting a wise precedent for dealing with such complaints on a case-by-case basis” — supported that interpretation.

On the other hand, Martin acknowledged that the order against Comcast did set a precedent for future action against other network operators. And he said that the agency had authority to hear and resolve any such complaints of network neutrality violations.

Net neutrality generally refers to legislation or regulation that would bar Bell companies and cable operators from expediting the internet delivery of favored business partners’ content – or blocking the content of rivals. The issue has become a political hot potato in the general election.

The ability for the FCC to become the venue for such future complaints would suggest a more sweeping interpretation of the action. On a Friday conference call, pro-Net neutrality advocates pushed that view, calling it a “bellweather case” and or, as Public Knowledge President Gigi Sohn said, “a landmark decision.”

A Net neutrality critic at the Progress and Freedom Foundation (PFF), a free-market think tank, called the decision “quite intrusive.”

In asserting that it had jurisdiction over Comcast and its practices, the FCC declared that it will “exercise its authority to oversee federal Internet policy in adjudicating this and other disputes regarding discriminatory network management practices.”

“In second-guessing reasonable network management techniques (with no notice or guidelines in place) that benefit the overwhelming number of broadband subscribers in America, the FCC has inexplicably elevated the interests of a few bandwidth hogs over everyone else,” said Klye McSlarrow, CEO of the National Cable and Telecommunications Association.

In a statement, a Comcast spokeswoman said the company was grateful that the commission did not impose a fine, but raised “significant due process concerns” with the decision.

The Republican Martin teamed up with the commission’s two Democrats in favoring an order against Comcast. The other two Republicans dissented, and signaled the concern that the FCC would become a forum for technical engineering disputes that it was not competent to resolve.

All three Republicans, including the dissenting Deborah Taylor Tate and Robert McDowell, emphasized the need for greater transparency about network and speed tier management by carriers.

“I must also stress the importance of disclosure and transparency by all internet providers,” said Tate. “Consumers must be able to know what they are paying for and getting. Comcast must do better.”

Of the two ways to look at the decision — sweeping or limited — Martin’s own statements emphasized the narrower reading of the FCC’s action. He and the agency emphasized consumer-focused concerns raised by Comcast’s behavior.

“Would you be OK with the post office opening your mail, deciding they didn’t want to bother delivering it, and hiding that fact by sending it back to your stamped ‘address unknown – return to sender?’” Martin asked. “That is exactly what Comcast was doing with their subscribers’ internet traffic.”

The six “findings” articulated by the Friday speech at the agency dealt extensively with the allegedly invasive, intrusive and deceptive aspects of Comcast’s “deep packet inspection.” (See findings here.)

The fact that no fine was levied against Comcast was a sign, Martin said in an interview, of the agency’s cautious approach.

Martin also argued that the FCC’s action was necessary to forstall legislation requiring Net neutrality. “Failure to act here” — in a case where Comcast has exhibited so much bad faith, Martin said — “would have reasonably led to the conclusion that new legislation and rules are necessary.”

Attempting to further restrict the scope of the decision, Martin said that the order does not address pricing, economic regulation, the requirement that carriers share their communications wires, or whether or not carriers may prioritize a particular class of software.

For example, cable operators could prioritize internet telephone service, so long as they didn’t discriminate against a competitor’s service at their expense of their own service.

By contrast, the pro- and anti-Net neutrality advocates emphasized the more seminal aspects of Friday’s decision.

“This is the Bush administration FCC saying that the FCC has the power to protect internet users,” said Public Knowledge’s Sohn, calling it “the most significant decision for the public interest” in 20 years.

Marvin Ammori, general counsel at Free Press, called the decision “bellwether case legally” because the FCC ordered Comcast not only to stop its deceptive practices, but to stop its unreasonable practices, he said.

“It is sweeping in that it is a process and a procedure that [the FCC] will follow” in future cases, he said.

Barbara Esbin, senior fellow at PFF, agreed that the decision was sweeping, but disagreed that it was a good outcome. “If the commission is correct, they have taken a very small step in a narrowly focused case against one operator,” she said.

“I don’t agree,” Esbin continued. “I think this is quite intrusive, and will create an unacceptable degree of uncertainty among companies and network engineers as to what is and is not permissible, and will require the FCC to continually make decisions on engineering practices in real time.”

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