Comcast pays $800,000 to U.S. for hiding stand-alone broadband

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Updated: The Federal Communications Commission has settled with Comcast over charges that the cable company made it hard for consumers to find stand-alone broadband packages that don’t cost an arm and leg. As part of the settlement Comcast paid the U.S. Treasury $800,000 and the FCC extended the length of time Comcast had to provide such a service.

The cable provider was ordered by the agency to provide access to “a reasonably priced broadband option to consumers who do not receive their cable service from the company” under the Commission’s Order approving the Comcast-NBCU transaction in 2010. To further show its ire with Comcast, the FCC also said Comcast would have to provide the stand-alone reasonable broadband-only package for another year — until February 21, 2015.

As part of Comcast’s 2011 agreement to buy NBC Universal the FCC tacked on several conditions that ranged from not prioritizing Comcast or NBC traffic over other packets on the Comcast network, to requirements that Comcast allocate channels for minorities. Comcast has touted its success including a new channel from Sean “Diddy” Combs, but entities ranging from individual technologies to Michael Bloomberg have complained.

In this case the FCC investigated complaints that alleged Comcast was hiding its “Performance Starter” service from customers. From the FCC release:

Under the order the Commission required Comcast to offer standalone broadband services on terms equivalent to packages that bundle broadband and video cable service. Comcast was ordered to offer a broadband service with a download speed of at least 6 mbps at a price no greater than $49.95 for three years. The Commission also prohibited Comcast from raising prices on the required broadband service for two years. Finally, Comcast had to “visibly offer and actively market” standalone broadband Internet access service to highlight the availability of this special service and other standalone broadband services.

Comcast didn’t admit fault as part of the settlement, but it did lay out some cash and pledge to make its cheaper stand-alone service more visible. It will train its call agents, make sure the offering is visible on its web site and it committed to a major marketing campaign around the Performance Started service for 2013. Ironically this comes at a time when Verizon is pulling back on offering stand-alone DSL.

However, the actions taken by the FCC may help convince folks like Senator Al Franken who wrote the DoJ and FCC a letter claiming that the agencies were letting Comcast run roughshod over its conditions. This move is one small step toward showing that the FCC isn’t some toothless regulator beholden to the very industry it regulates.

Update: Here’s Comcast’s response:

“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. 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. We are pleased that Comcast and the FCC were able to address such issues cooperatively and constructively in a consensual manner. We look forward to continuing to offer and market Performance Starter in additional ways and with additional outlets. We believe this product offers a choice consumers want in the marketplace.”

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