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Cable Technology Feature Article

July 02, 2012

FCC Imposes $800K Fine Against Comcast

By Ashok Bindra, TMCnet Contributor

The Federal Communications Commission (FCC (News - Alert)) has imposed an $800,000 fine against Comcast for not adequately marketing its standalone broadband Internet service, which was one of the conditions for its merger with NBC Universal (News - Alert).

As per this report, last year, the FCC and the Department of Justice approved the Comcast-NBC Universal deal on certain conditions. And one of those conditions was that Comcast (News - Alert) will continue to offer standalone broadband service at reasonable prices with sufficient bandwidth to those who do not subscribe to Comcast's cable services, reported PCMag.com reporter Chloe Albanesius.

"Today's action demonstrates that compliance with Commission orders is not optional," FCC chairman, Julius Genachowski (News - Alert) said in a statement. He added, "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. I am pleased we were able to resolve this issue."

The report suggests that Comcast specifically had to provide broadband service with download speeds of at least six Mbps at $49.95 per month or less for at least three years. Under the condition, the service provider was also prohibited from raising prices on that broadband service for two years, and had to actively market its standalone offering.

Because Comcast was not complying with these conditions, the FCC received numerous complaints. Consequently, the Commission opened an investigation, which resulted in $800K fine as a settlement.

As a result, Comcast has been given a one year extension. According to PCMag.com report, Comcast must continue to offer its standalone "Performance Starter" service until at least Feb. 21, 2015. The report indicates that this is the first time the Commission has extended a merger condition.

The revised merger condition also requires that Comcast revamp its marketing plan to make mention of "Performance Starter" more prominent on its website and other promotional materials.

The report quoted FCC Enforcement Bureau chief Michele Ellison, as saying, "The unprecedented merger condition extension, significant voluntary contribution, 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."

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Edited by Brooke Neuman

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