FCC Says Comcast Violated Net Neutrality Policy

Published October 8, 2008

The Federal Communications Commission (FCC) has ruled Comcast Corporation violated agency policies regarding net neutrality by blocking some downloads by its Internet service subscribers.

Industry analysts see FCC’s move as a landmark decision on the issue—and possibly very troubling.

The decision came in a 3-2 vote in which FCC Chairman Kevin Martin, a Republican, sided with the two Democrat commissioners and opposed the two members of his own party on the commission.

The commission chose not to fine or otherwise punish Comcast at this time, but gave the firm 30 days to reveal to FCC its “discriminatory network management” practices and submit to FCC and Comcast customers a plan to stop those practices by the end of the year.

Neutrality Proponents Happy

Marvin Ammori, general counsel for Free Press, a media reform advocacy group, says FCC was right to decide against Comcast.

“Comcast should be punished for violating consumers’ right to access all lawful Internet content and Internet applications,” Ammori said. “Comcast was blocking consumer uploads and degrading peer-to-peer applications in a discriminatory way. Since those applications are used for delivering high-definition television programming online … Comcast’s action had an anti-competitive effect.”

Anger Over Data Management

The furor began with the revelation Comcast was blocking data streams from some Internet users running certain file-sharing programs. That process, known as “throttling,” is a way for service providers to manage data streams.

Comcast was known to be throttling data streams from users downloading files using BitTorrent, a peer-to-peer (P2P) file-sharing program. Steven Titch, telecommunications policy analyst for Reason Foundation, says Comcast’s throttling of BitTorrent data-sharing does not violate FCC’s net neutrality policies.

“The FCC has chosen to interpret Comcast’s decision to slow BitTorrent traffic as a violation of its neutrality policies, which prohibit [Internet service providers] from blocking access to Web sites or applications. The interpretation is an overreach, as Comcast did neither,” said Titch.

Instead, Titch said, Comcast “was attempting to balance the traffic on its network as BitTorrent users, being small in number, were consuming a highly disproportionate amount of bandwidth to the point where it was degrading the quality of service for mainstream customers. Even BitTorrent conceded that Comcast had a right to manage traffic on the network facilities it owns. The two companies reached an agreement on management of BitTorrent traffic. Market mechanisms worked.”

Comcast came to an agreement with BitTorrent in March, promising not to single out BitTorrent downloads.

Media, Bloggers Spurred Action

That wasn’t’ enough for FCC, however. The revelations of Comcast’s policy came as a result of an Associated Press investigation last year, and net neutrality proponents immediately began flooding the agency and the Web, especially blogs, with complaints about it.

After the Comcast-BitTorrent agreement, the complaints continued anyway, and FCC pressed forward with its investigation.

Concern Over Competition

FCC was particularly concerned Comcast’s policy could be reducing competition, as the peer-to-peer networks compete with Comcast’s video-on-demand cable TV offerings.

“The FCC issued a policy statement in 2005 saying it would ensure consumers could access all lawful content, applications, and attach any devices, and benefit from competition. This statement was based on ‘four principles’ advanced by a Republican FCC chairman, Michael Powell, and issued under another Republican chairman, Kevin Martin, with unanimous FCC support,” said Ammori.

When the September 2005 policy statement was adopted, however, Martin had said the principles “do not establish rules, nor are they enforceable documents,” according to AP. In addition, the rules explicitly allow “reasonable network management.”

Ammori argues FCC action is nonetheless necessary.

“The FCC protects consumers’ access to all content and applications because the Internet has demonstrated itself to be an engine of innovation, competition, free speech, and economic growth based on consumers being able to access the content and applications chosen by consumers—not phone or cable companies, which generally operate in an uncompetitive broadband access market. Here, Comcast was impeding access to lawful content and applications,” Ammori said.

Anti-Cable Bias Seen

Titch says the ruling is inconsistent with Martin’s previous experience as FCC chairman. Titch believes the decision may be politically motivated.

“The two Democrats on the commission support net neutrality and, at least until now, Martin and the two other Republicans did not. Martin voted with the Democratic commissioners in the Comcast case even though in the past he has spoken in support of policies that allow market forces to work and keep government interference with telecom technology and business to a minimum,” said Titch.

“At the same time, he has consistently favored greater regulation of cable on a number of issues,” Titch continued, noting Martin’s interest in regulating exclusive contracts between cable providers and owners of multi-tenant buildings and in programming and content issues such as channel bundling and a la carte pricing.

Titch said it’s difficult to say whether Martin, in siding with Democrats, meant to be for net neutrality or anti-cable.

“The latter position would be more consistent with the positions he has taken during his term,” Titch said.

Many Problems Expected

Titch says net neutrality policies are unwise because market forces foster better Internet service than government control.

“Such laws would, for the first time, introduce regulation to the wide diversity of applications that rely on the Internet,” Titch said. “They would prohibit the acceleration and partitioning of critical data such as medical and public safety communications; degrade popular consumer applications such as video and imaging; and overall lead to a slower, more mediocre Internet experience for consumers.”

Aleks Karnick ([email protected]) writes from Indianapolis, Indiana.