FCC slaps Comcast, but lays foundation for future bandwidth restrictions

Posted by Wolfgang Gruener

Opinion – Some companies are more equal than others. That is an impression some may take away from an order issued by the FCC against Comcast, requiring the cable Internet service provider to disclose details of its network management practices, submit a plan of compliance with current rules and regulations, stop unreasonable and, perhaps most importantly, disclose future plans of bandwidth restrictions. Comcast lied and deceived. It violated federal policies and ends up with an opportunity to discuss bandwidth restrictions. You may call that unfair. Others may call it business brilliance.

It took the FCC nearly one year to respond to complaints filed against Comcast’s widely publicized bandwidth throttling practices, but the order the FCC issued yesterday proves that the Commission has done its homework of research. On 67 pages, the FCC describes the history and nature of the complaints, why it has authority to rule in this matter and whether the complaints are justified or not. The structure of the document resembles a drama-filled climatic increase of allegations and evidence against Comcast, concluding that the company violated the very core of federal policies for providing Internet services – that “consumers are entitled to run applications and use services of their choice” and must be enabled “to access the lawful Internet content of their choice” in a framework of “reasonable network management”.   

Here are a few examples:

The FCC states that Comcast “misleadingly disclaimed any responsibility for the customers’ [bandwidth] problems” and even quoted a Comcast spokesperson who flatly denied that the company throttles any traffic. As soon as evidence of the contrary had surfaced, Comcast changed its story and said that it “targets peer-to-peer traffic for interference”, only to change its story again and sate that its “current P2P management is triggered . . . regardless of the level of overall network congestion at th[e] time, and regardless of the time of day.”

The Commission notes that “the record leaves no doubt that Comcast’s network management practices discriminate among applications and protocols rather than treating all equal” and compared the traffic management practice to opening “its customers’ mail because it wants to deliver mail not based on the address or type of stamp on the envelope but on the type of letter contained therein.” Comcast initially stated that only 10% of the traffic on its network is affected, but indicated that the number may be closer to 20%, while independent testing suggested that the rate is much more likely somewhere between 40 and 75%.

In its conclusion, the FCC says that “this practice is not ‘minimally intrusive’ but invasive and outright discriminatory” and may even “discourage the ‘development of technologies’ — such as peer-to-peer technologies — that ‘maximize user control over what information is received by individuals . . . who use the Internet’ because that interference (again) impedes consumers from ‘run[ning] applications . . . of their choice,’ rather than those favored by Comcast.”

In its own policy, the FCC sates that “should [the FCC] see evidence that providers of telecommunications for Internet access or IP-enabled services are violating [the] principles [of the federal policy], we will not hesitate to take action to address that conduct.”   

There was no doubt that Comcast has violated these basic principles mentioned above. So what action does the FCC take?

Within 30 days, Comcast has to

1. disclose to the Commission the precise contours of the network management practices at issue here, including what equipment has been utilized, when it began to be employed, when and under what circumstances it has been used, how it has been configured, what protocols have been affected, and where it has been deployed
2. submit a compliance plan to the Commission with interim benchmarks that describes how it intends to transition from discriminatory to nondiscriminatory network management practices by the end of the year
3. disclose to the Commission and the public the details of the network management practices that it intends to deploy following the termination of its current practices, including the thresholds that will trigger any limits on customers’ access to bandwidth.  

If Comcast fails to comply with this order,

1. interim injunctive relief automatically will take effect requiring Comcast to suspend the network management practices described above within 35 days of the release of this Order
2. the Enforcement Bureau will immediately issue an order directing Comcast to show cause why a permanent cease-and-desist order should not be issued against it
3. a hearing will be set for thirty days after Comcast’s receipt of that order.

Similarly, if Comcast files the information required above within 30 days of the release of the order, but does not follow through on its commitment to end its discriminatory network management practices by the end of the year, the interim injunctive relief automatically will take effect requiring Comcast to suspend immediately the network management practices, the Enforcement Bureau will immediately issue an order directing Comcast to show cause why a permanent cease-and-desist order should not be issued against it and a hearing will be set for 30 days after Comcast’s receipt of such show-cause order.

Is it just me or does this ruling a type of “if you don’t comply with our order, we will seriously consider thinking about a more convincing order”? In a way, Comcast received a get-out-of-jail-free card and its public deception did not result in any fines. Was Comcast simply lucky? Perhaps. But there is a much more interesting outcome in this process – an outcome that lays the groundwork for the creation of generally accepted bandwidth throttling.

Within the document, the Commission indicates that it generally agrees with bandwidth limitations, as long as they are reasonable. The term “reasonable” of course is a matter of further discussion and the FCC even goes as far as suggesting what measures Comcast (and other ISPs, for that matter) could employ:

“Comcast could cap the average users’ capacity and then charge the most aggressive users overage fees.   Or Comcast could throttle back the connection speeds of high-capacity users (rather than any user who relies on peer-to-peer technology, no matter how infrequently).   Or Comcast can work with the application vendors themselves.   As Comcast has touted in this very dispute, negotiations with Pando and BitTorrent, Inc. and other peer-to-peer application companies have advanced the creation of the P4P protocol, which promises ‘backbone bandwidth optimization’ and ‘improve[d] P2P download performance.’  Although we do not endorse any of these particular solutions today, they all appear far better tailored to Comcast’s basic complaint that a ‘disproportionately large amount of the traffic currently on broadband networks originates from a relatively small number of users.’”

    
What throttling is reasonable for Internet access that will cost at least $60 per month (for customers who do not subscribe to other Comcast services) and offers half the speed of DSL for the same price? What services should be throttled and should Comcast limit the number of movies you be able to stream from services such as Netflix at full speed?

In our opinion, it is clear that many users will subscribe to a cable Internet service for a reason: Even Comcast’s commercials suggest that these connections are much faster than DSL services and we do not think Comcast should be able to penalize users who do want to take advantage of their higher-speed connection. But this latest order creates the necessary negotiation space for Comcast to put exactly such procedures into place – permanently.      

What better outcome could Comcast have hoped for?