FCC Chair Pushes for Comcast Censure

Net neutrality

Federal Communications Commission Chairman Kevin Martin recommended today that the agency take action against Comcast, the nation’s largest cable provider, for “arbitrarily blocking” Internet traffic over its network and failing to inform subscribers of its policies.

Martin issued a draft order charging Comcast (NASDAQ: CMCSA) with acting against the FCC’s three-year-old Internet principles. The order will come up for a vote at the agency’s next open meeting on Aug. 1.

The move is the latest turn of events in a saga that has pitted Comcast against critics who allege that the company violates Net neutrality — the principle that all Internet traffic should be treated equally — by restricting certain kinds of traffic without adequate notice.

Comcast has maintained that the charges against it are overstated, and that the policies it imposes on traffic aim only to ensure the smooth operation of its network.

“We’ve never blocked any Internet content. We were and still are managing peer-to-peer content,” Sena Fitzmaurice, a spokeswoman for the company, told InternetNews.com. “Even when you’re getting managed, the majority of the time — 80 percent of the time — it’s still going through within a minute.”

Though it does not seek to impose any fines, the FCC order would require the ISP to change the way it handles traffic on its network. It would also have to provide the agency with compliance updates and improve the notice it provides subscribers, FCC spokesman Robert Kenny told InternetNews.com.

“The chairman has said that Comcast violated the Internet service principles that were set forth by the commission back in 2005,” Kenny said. “They were arbitrarily blocking certain content.”

“The chairman wants to ensure that moving forward in these cases when companies are making effort to manage their networks that they fully disclose the limitations of the bandwidth use to their subscribers so they know exactly what they’re paying for.”

In February, Comcast amended its terms of service to give greater notice about its traffic management, but Kenny said it still wasn’t enough.

In addition to forcing changes by Comcast, Martin’s proposed order could set the stage for a major victory for Net neutrality supporters. The Republican chairman’s support of a position long advocated by the FCC’s two Democratic commissioners suggests that the order might win a majority when put to a vote before the five-person commission.

The FCC’s review of Comcast’s network management stems from a complaint filed by the nonprofit advocacy groups Free Press and Public Knowledge in response to the discovery that Comcast had been slowing traffic from the peer-to-peer site BitTorrent.

On word that Martin’s draft order was coming, Free Press declared that consumers were “poised for victory against Comcast.”

“The FCC now appears ready to take action on behalf of consumers,” Marvin Ammori, general counsel for the group, said in a statement. “This is an historic test for whether the law will protect the open Internet.”

Litigate before you regulate?

There remains considerable debate over the FCC’s legal authority on the matter, however. Fitzmaurice argued that the FCC’s 2005 Internet service principles “did not create enforceable rules.”

The principles, which assert that consumers should be able to access “lawful content of their choice” on the Internet, were issued as a policy statement. Fitzmaurice argued that since they did not go through the FCC’s rulemaking process, they do not give the agency a mandate.

Moreover, the FCC issued the principles with the caveat that they are subject to “reasonable network management,” which is what Comcast says it has been doing all along.

Free Press recently clarified its legal opinion on the matter, claiming that the FCC has the authority both by virtue of the 1934 Communications Act that established the agency, and because the review of the Comcast case came out of its complaint process.

Martin agrees with that interpretation and has long maintained that the FCC has the authority to act to uphold the principles, though there is no consensus on that point within the commission.

Blair Levin, an analyst with Stifel Nicolaus and a former senior FCC staffer, wrote in a research note that he expects the draft order to win approval, but looks ahead to a legal challenge from Comcast over the FCC’s authority.

“We expect the order will provoke a significant debate at the FCC, though in the end, we think the majority will agree to the general conclusions of the order as circulated by Mr. Martin. But the commission will not be the last word,” Levin said, citing the “unsettled legal landscape.”

Page 2: Mum on side deals

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Should Comcast score a victory in court over the FCC’s authority to enforce the principles, it still could face trouble ahead when the new Congress convenes, Levin wrote.

Net neutrality legislation — largely a partisan issue — has never come close to passing either the House or the Senate, despite several attempts. At present, there are two Net neutrality bills in the House and one in the Senate.

Yet the issue could be taken up with renewed zeal by a likely Democratic Congress, Levin said.

Even if the next Congress remained deadlocked on the issue, the agency could move to shore up its own authority on network management enforcement, he added in his note.

That would mean that it would put the FCC’s Internet service principles — or something close to them — through a formal rulemaking procedure.

That task that would be made considerably easier in a Democratic administration with an FCC that “may openly support network neutrality,” Levin wrote.

Mum on quality-of-service side deals

One significant point excluded from Martin’s draft order was the question of Comcast brokering quality assurance agreements with individual companies.

Earlier this week, Comcast announced a deal with Internet phone provider Vonage to work together on “reasonable network management.”

Net neutrality proponents have long been warning against a scenario where Internet companies would feel compelled to begin negotiating deals with ISPs to ensure that their traffic is delivered quickly over the various networks.

That, they argue, would be a recipe for a decidedly non-neutral Internet, and Free Press was quick to express its concerns.

“We are baffled as to why it was necessary for Vonage to strike a network management agreement with Comcast to guarantee that their services are not degraded or blocked,” Free Press’ Ammori said in a statement. “Such anti-competitive, anti-consumer practices are already against the law.”

Comcast claims that it’s not that simple.

In March, the cable giant announced that it was moving toward a policy of protocol-agnostic network management, which meant that traffic from peer-to-peer services such as BitTorrent would be subject to the same speed limits as every other transmission.

[cob:Special_Report]But managing the flow of packets affects different types of transmissions in different ways. A video download, for instance, has a much higher tolerance for latency that a video stream. Likewise, the quality of an Internet phone call sinks quickly if certain data packets hit speed bumps when traveling over the network.

Comcast’s announcement to make its network management protocol-agnostic by the end of the year came amid intense pressure from the public-interest groups and the specter of regulatory inquiry.

While the move positioned Comcast as not targeting a single type of traffic, the question of how a protocol-agnostic approach would mesh with latency tolerances of different transmissions remains unanswered.

But the FCC’s Kenny said that the commission’s proposed draft order was limited to Comcast’s traffic blocking and subscriber notification policies, leaving the issue of side deals off the table for the time being.

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