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Federal Communications Commission Finds Comcast In Violation of Net
Neutrality Principles

August 1 , 2008
printable version

At its Open Meeting on August 1, 2008, the FCC adopted an Order (“Comcast Network Management Order” or “Order”) on a vote of 3-2, finding that Comcast violated the FCC’s Internet nondiscrimination policies set forth in its Internet Policy Statement. The Comcast Network Management Order represents the first time that the FCC has interpreted the Internet Policy Statement and indicates that the FCC will pursue a course of establishing rules implementing the Internet Policy Statement through case-by-case adjudications in response to complaints, rather than through a rulemaking process. This decision will allow parties with grievances against broadband providers to seek redress from the FCC for claims that, until now, might not otherwise have given rise to a cause of action in any other forum.The full text of the Comcast Network Management Order has not yet been released.

I. SUMMARY

The Comcast Network Management Order stems from a complaint filed by Free Press and Public Knowledge, which are public interest advocacy groups, who claimed that Comcast blocked its customers’ use of peer-to-peer applications, such as BitTorrent, in a discriminatory and unreasonable manner. After receiving evidence through a notice and comment process, as well as through high-profile public hearings held in Cambridge, MA and Palo Alto, CA, the Commission concluded that Comcast has unduly interfered with its broadband customers’ right to access the lawful Internet content and to use the applications of their choice. Specifically, the Commission found that Comcast had deployed equipment throughout its network to monitor the content of its customers’ Internet connections and selectively block certain peer-to-peer connections. The Commission retained jurisdiction over this dispute and adopted a plan designed to bring Comcast’s discriminatory conduct to an end within thirty (30) days of the publication of the Order.

II. THE COMMISSION’S FINDINGS

In the Order, the Commission found that Comcast’s network management practices are not minimally intrusive, discriminate among applications rather than treating all equally, are potentially anti-competitive, and are inconsistent with the concept of an open and accessible Internet as required by the Internet Policy Statement. Specifically, the Commission found “that Comcast monitors its customers’ connections using deep packet inspection and then determines how it will route some connections based not on their destinations but on their contents. In essence, Comcast opens its customers’ mail because it wants to deliver mail not based on the address on the envelope but on the type of letter contained therein.”

Commission Chairman Kevin Martin stressed that Comcast was found to have used deep-packet inspection techniques that: 1) blocked customers who were using very little bandwidth simply because they were using a disfavored application; 2) did not block customers using an extraordinary amount of bandwidth even during periods of peak network congestion as long as they were not using a disfavored application; 3) delayed and blocked customers using a disfavored application even when there was no network congestion; and 4) actively extended management techniques to regions much larger than where it claimed congestion occurred. In sum, Chairman Martin stated that Comcast was “not simply managing their network; they had arbitrarily picked an application and blocked their subscribers’ access to it.”

The Commission noted that these practices could have anticompetitive effects because they interfere with customers’ use of peer-to-peer applications, such as those that “provide Internet users with the opportunity to view high quality video that they might otherwise watch (and pay for) on cable television. Such video distribution poses a potential competitive threat to Comcast’s video-on-demand (“VOD”) service.” The Commission also concluded that the anticompetitive harms caused by Comcast’s conduct are compounded by the company’s failure to disclose its practices to consumers. This left customers with no way of knowing when Comcast was interfering with their connections. As a result, the Commission found that “many consumers experiencing difficulty using certain applications would not place blame on Comcast, where it belonged, but rather on the applications themselves, thus further disadvantaging those applications in the competitive marketplace.”

Finally, the Commission stated that while it is committed to assisting Internet providers in protecting consumers’ access to lawful content, blocking unlawful content such as child pornography or pirated music or video is consistent with federal Internet policy. As Commissioner Adlestein stated, the “Internet Policy Statement extend[s] only to lawful content; hence, [the Comcast Network Management Order]does nothing to prevent providers from, for example, restricting access to child pornography or content that violates copyright law.”

In sum, according Commissioner Copps, the Commission’s action in the Comcast Network Management Order recognizes “that unreasonably impeding the performance of an Internet application (like peer-to-peer file sharing)—and not just outright blocking a particular website or program—violates the FCC’s Internet policies.” The Order requires that “Internet providers inform their customers when they make important technical decisions that change how the Internet works.” And the Order also creates a right for “consumers who feel their Internet experience is being unreasonably interfered with a right to seek help at the Commission.” However, according to Commissioner Copps, the Comcast Network Management Order does not prohibit carriers from reasonably managing their networks, nor does it “prevent engineers—either now or in the future—from coming up with new and better ways to serve their customers.”

III. THE COMPLIANCE PLAN

In order to ensure that Comcast ends its discriminatory network management activities, the Commission outlined a thirty-day plan (“Plan”) to bring Comcast’s discriminatory conduct to an end. Specifically, within 30 days of release of the text of the Comcast Network Management Order, the Commission is ordering Comcast to:

            1.         Disclose the details of its discriminatory network management practices to the
                        Commission;
            2.         Submit a compliance plan describing how it intends to stop these discriminatory
                        management practices by the end of the year; and
            3.         Disclose to customers and the Commission the network management practices                               that will replace current practices.

Should Comcast fail to comply with the Plan proscribed in the Comcast Network Management Order, the Commission will apply automatic interim injunctive relief. This relief will require Comcast to suspend its discriminatory network management practices and the matter will be set for hearing.

Chairman Martin stated that in complying with the Plan, the Commission will require Comcast to answer a number of outstanding questions, including:

            1.         What exactly [does Comcast] mean by a “protocol agnostic” management
                        technique?
            2.         Will there be bandwidth limits?
            3.         If so, what will they be?
            4.         Will they be hourly? Monthly?
            5.         How will consumers know if they are close to a limit?
            6.         If a consumer exceeds a limit, is his traffic slowed? Is it terminated? Is his
                        service turned off?

This leaves open the possibility that some clarity may be given with respect to these and other question raised by the enforcement of the Internet Policy Statement during the pendency of this case.

IV. CONCLUSION

The Comcast Network Management Order is important because it represents the first time that the Commission has attempted to enforce the principles set forth in its Internet Policy Statement. Prior to this time, there has been considerable uncertainty regarding whether and how the Commission would enforce these principles. It now appears that the FCC is enforcing its Internet Policy Statement through an adjudicative process rather than through a rulemaking. This creates a precedent whereby customers can file complaints directly with the FCC regarding alleged violations of the FCC’s Internet Policy Statement. At a minimum, this opens up a whole new avenue for customers, consumer advocates, and edge service providers to seek redress of various claims that might not otherwise give rise to a cause of action in other venues. It also means that network operators may not have advance notice and clarity with regard to what rules govern their Internet network management practices before they implement them, but rather will have to attempt to anticipate what acceptable practices will be based on the limited statements and rulings issued by the Commission.

In addition, the adoption of the Comcast Network Management Order does not resolve all of the legal uncertainties regarding the Commission’s Internet Policy Statement. Specifically, there are still substantial questions open regarding the Commission’s jurisdictional authority to enforce Internet Policy Statement. Indeed, in its filings in the present case, Comcast made a spirited argument that the Commission lacks such authority and that there are significant procedural problems with the manner in which it has done so. In effect, according to Comcast and with the apparent concurrence of two commissioners, the FCC is attempting here to enforce rules that, in essence, do not exist. Given this, there is a real possibility that Comcast will mount a court challenge to the Commission’s action in the Comcast Network Management Order. The strength or weakness of the Commission’s legal support for its decision is not clear on the basis of the Press Release; more analysis will be available once the full text of the Comcast Network Management Order is released.

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