Comcast has agreed to pay an $800,000 settlement for allegedly breaking promises to the federal government that it would market affordable standalone broadband Internet services that weren’t tied to its cable television plans, the Federal Communications Commission said Wednesday.
The FCC said Comcast, the nation’s largest cable and broadband Internet provider, agreed to the settlement after an investigation found it had violated conditions to its 2011 joint venture with NBCUniversal.
As part of the FCC's consent decree, Comcast also agreed to extend its promise to offer standalone broadband Internet service for an additional year, bringing its total commitment to four years. Comcast’s settlement fine will be paid to the U.S. Treasury.
“Today’s action demonstrates that compliance with Commission orders is not optional,” said FCC Chairman Julius Genachowski in a statement. ”The remedies 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.”
The announcement comes amid growing scrutiny of Comcast and other cable providers, which are grappling with a transition by consumers to Internet video providers such as Netflix and Hulu. That trend threatens Comcast’s underlying cable television business and Comcast’s implementation of new data billing practices has drawn fresh attention from federal antitrust officials at the FCC and Justice Department.
Netflix and public interest groups have complained that Comcast appears to be making it difficult for consumers to break away from paid cable television services. The company offers its XFinity streaming video service over XBox gaming consoles for free to cable customers. It also imposes a data cap that today only affects a minority of its customers but in the future could deter consumers from streaming videos from competing services such as Netflix or Hulu.
Comcast downplayed the investigation by the FCC’s enforcement bureau.
“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,” said Comcast vice president of communications Sena Fitzmaurice. “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.”
The FCC said it launched it investigation after receiving complaints that Comcast wasn’t honoring its promise to sell and promote affordable broadband.
It was the first time the agency had extended conditions to a merger. And it said the action could lead to savings worth “many millions of dollars” to consumers.