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FCC/Comcast Bloomberg report
From: David Farber <dave () farber net>
Date: Fri, 1 Aug 2008 15:26:45 -0400

Comcast Ordered by FCC to Stop Blocking Web Access (Correct)

By Todd Shields

(Corrects 10th paragraph to show Boehner is from Ohio.)

Aug. 1 (Bloomberg) -- Comcast Corp., the largest U.S. cable-television provider, was ordered by the U.S. Federal Communications Commission to stop blocking its customers from sharing videos and other files online.

The FCC levied no fine in the 3-2 ruling that asserts federal power over how telephone and cable-TV companies manage their customers' access to the Internet. The agency made the decision in response to a complaint filed nine months ago by public-interest groups. They accused Comcast of slowing traffic on its network and stopping users from uploading files.

``Today, the commission tells Comcast to stop, and to disclose to its subscribers how it is going to manage traffic,'' FCC Chairman Kevin Martin said at a meeting in Washington. ``The commission will remain vigilant in protecting consumers' access to content on the Internet.''

Comcast denies blocking traffic and says it delays some files during congestion on networks used by its 14.4 million Internet customers. Comcast spokeswoman Sena Fitzmaurice said in an e-mailed statement today that the Philadelphia-based company is disappointed by the FCC's divided conclusion and is considering all of its legal options.

`Bellwether Case'

``This is a bellwether case,'' Marvin Ammori, general counsel of the group Free Press, which led efforts against Comcast, said in an interview yesterday. ``It will send a public signal that phone and cable companies can't interfere in Internet traffic.''

Comcast, the biggest U.S. cable company, fell 28 cents, or 1.4 percent, to $20.34 at 12:54 p.m. New York time in Nasdaq Stock Market trading. The shares had gained 13 percent this year before today.

The FCC found it unreasonable for Comcast to discriminate against particular Internet applications, including BitTorrent, Martin said. The order said customers must receive adequate notice of network management practices. Martin said in a statement today operators must demonstrate they have ``reasonable'' grounds to block legal content.

``We will look at whether it furthers an important interest and is carefully tailored,'' he said.

Critics said the FCC lacks the authority to make such a ruling and is interfering in decisions best left to business.

`Dangerous Path'

``The FCC is poised for massive, unprecedented regulation of the Internet,'' U.S. House Republican Leader John Boehner of Ohio said in a statement before the vote. ``This dangerous path would limit freedom, stifle innovation and entrepreneurship, and kill American jobs.''

Executives from Time Warner Cable Inc., Charter Communications Inc., and Cablevision Systems Corp. met July 24 with Martin to say they need ``flexibility in dealing with network management issues,'' according to a disclosure filing posted on the agency's Web site.

AT&T Inc., the largest U.S. telephone company, which has 14.7 million high-speed Internet customers, urged the FCC to limit itself to ``narrowly tailored responses to demonstrated market failures'' in a filing on Feb. 28.

New York-based Verizon Communications Inc., with 8.3 million high- speed Web users, in testimony submitted on Feb. 25, said managing networks ``always will be a fundamental and necessary part of operating a broadband network.''

Free Press and Media Access Project, both Washington-based public interest groups, said in their Nov. 1 complaint to the FCC that Comcast was ``secretly degrading innovative protocols used for transporting and sharing large files, like high-quality television programming and movies.'' They said Comcast stopped transfers that use the BitTorrent protocol.

Comcast said it takes no account of files' content. In a July 21 filing, its executive in charge of online products, Senior Vice President Mitch Bowling, said Comcast delays file- sharing programs that have ``a history of generating disproportionate burdens on the network.'' He didn't identify the programs.

Comcast in a March 27 statement said it would, by year's end, begin to manage traffic without regard to which program, or protocol, is used.

To contact the reporter on this story: Todd Shields in Washington at tshields3 () bloomberg net
Last Updated: August 1, 2008 13:44 EDT

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