Comcast Settles NBCU Deal Complaint

Will pay $800,000 and extend standalone broadband offering

By John Eggerton -- Broadcasting & Cable, 6/27/2012 4:41:23 PM

According to the FCC, Comcast has agreed to pay $800,000 and extend its NBCU deal agreement to offer reasonably priced standalone broadband to consumers who do not also take cable service from the company, the first time the FCC has extended a deal condition via consent decree.

Comcast defended its standalone offering nonetheless, and suggested it was a difference of opinion on how the condition should have been met and that it was glad to have resolved it.

The agreement, in the form of a consent decree adopted by the FCC's Enforcement Bureau, resolves an FCC investigation into complaints that Comcast was not "adequately marketing" the stand-alone service it agreed to offer as part of the NBCU deal.

"Today's action demonstrates that compliance with Commission orders is not optional," said FCC Chairman Julius Genachowski in a statement. "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 commission required Comcast as part of the NBCU deal conditions to offer standalone broadband on equivalent terms as bundled service, at speeds of at least 6 Mbps, for no more than $49.95 a month for a period of three years. It also prohibited it from raising the price for two years and required it to "visibly offer and actively market" the availability of the service. According to the FCC release, it was apparently only the "actively market" part that was at issue in the complaint.

Under the terms of the consent decree, Comcast has agreed to offer its "Performance Starter" broadband service until at least Feb. 21, 2015, which is one year beyond the current deal requirement.

"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," Comcast said in a statement. "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."

In addition to the payment and extension, there is a compliance regime Comcast has agreed to follow, according to the commission.

• "Training its customer service representatives and retail sales personnel to reinforce their awareness and familiarity with the Performance Starter service;
• "Ensuring that new and existing Comcast customers have equal access to a web page devoted exclusively to describing and permitting online purchase of all retail standalone broadband Internet service options;  
• "Listing the Performance Starter service tier on product lists issued to Comcast customers; 
• "Conducting a major advertising promotion of Comcast's standalone retail broadband Internet access service offerings in 2013; and  
• "Continuing to offer the Performance Starter service at its owned and operated retail locations and offering its third-party retail agents and independent dealers the opportunity to sell the Performance Starter broadband service."

"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," said Enforcement Bureau chief Michele Ellison.

The FCC's Media Bureau last month ruled that Comcast had not sufficiently complied with the network neighborhooding condition in the NBCU deal. That came in a response to a complaint by Bloomberg. Comcast challenged that decision.