A commitment made by Comcast to follow net neutrality rules expired on Saturday, seven years after the cable company agreed to the requirements in order to purchase NBCUniversal.
When Comcast bought NBC in 2011, it pledged to follow the net neutrality rules the Federal Communications Commission had passed in 2010 even if those rules were later overturned in court. Comcast thus continued to face rules against blocking, throttling, and paid prioritization even after a federal appeals court struck down that version of net neutrality rules in January 2014. Comcast (but not other ISPs) faced net neutrality requirements for more than a year until June 2015, which is when a new set of net neutrality rules took effect.
But Comcast's merger agreement with the FCC expired, as per schedule, on January 20. The expiration, combined with the FCC's decision last month to repeal the industry-wide net neutrality rules implemented in 2015, will free Comcast of FCC oversight when it comes to net neutrality. Comcast will still face some merger-related oversight from the Department of Justice until September, though.
The current FCC rules that apply to all ISPs—which were stricter than the merger conditions imposed on Comcast—are set to be taken off the books 60 days after the repeal order is published in the Federal Register. Only congressional action or a court injunction could prevent the rules' repeal.
"Tomorrow, the merger conditions preventing Comcast-NBCU from discriminating against competitors will expire," FCC Commissioner Mignon Clyburn tweeted on Friday. "Now 7 yrs later, @TheJusticeDept is challenging ATT's merger w/ TW on the same grounds that led @FCC to impose conditions on Comcast. Has anything really changed?"
Tomorrow the merger conditions preventing Comcast-NBCU from discriminating against competitors will expire. Now 7 yrs later, @TheJusticeDept is challenging ATT’s merger w/ TW on the same grounds that led @FCC to impose conditions on Comcast. Has anything really changed?
— Mignon Clyburn (@MClyburnFCC) January 19, 2018
Clyburn was referring to a Trump administration lawsuit that attempts to block AT&T's proposed acquisition of Time Warner Inc.
DOJ conditions not expired
Comcast agreed to two sets of conditions when it bought NBC in 2011: one was imposed by the FCC, and the other came from the Department of Justice. While the FCC conditions are now expired, the DOJ conditions remain on the books until September 1, 2018.
There was some overlap between the two sets of conditions, including on the net neutrality provisions. But the net neutrality commitments to the DOJ that remain in effect until later this year aren't exactly the same as the ones enforced by the FCC.
The DOJ order doesn't explicitly ban blocking and throttling, but it says that Comcast "shall not unreasonably discriminate in transmitting lawful network traffic over a consumer's Internet Access Service."
The DOJ order also prevents Comcast from exempting its own online services or affiliated services from Comcast's Internet data caps. When calculating whether a customer has exceeded a data cap, Comcast is not allowed to measure or count its own Internet traffic differently from third-party traffic.
If Comcast offers "specialized services" to companies willing to pay for improved access to Internet users, Comcast must allow any similar companies "to be included in a similar Specialized Service on a nondiscriminatory basis."
Comcast also isn't allowed to prioritize its own online video content over other companies' video content until September, when the DOJ conditions expire.
Changed net neutrality pledge
Comcast's throttling of BitTorrent traffic in 2007 helped push the FCC toward imposing its first set of net neutrality rules in 2010.
Comcast today says it has "no plans" to implement paid prioritization. But Comcast deleted a statement that it "doesn't prioritize Internet traffic or create paid fast lanes" from its net neutrality pledges when the FCC announced its net neutrality repeal in April 2017.
Comcast's pledges will be important legally even after the FCC's net neutrality rules go off the books. That's because the Federal Trade Commission can punish companies that break their promises to consumers.
Comcast continues to say that it does not "block, slow down, or discriminate against lawful content."
Merger condition extension?
Merger conditions also required Comcast to offer programming at fair rates to online video distributors. This was meant to prevent Comcast from using its ownership of programming to deter the competition that streaming services pose to its cable TV business.
Similarly, the conditions made it difficult for Comcast to overcharge smaller pay-TV companies. Those conditions required Comcast to submit to arbitration when there were disputes over prices, terms, and conditions of programming agreements with other pay-TV companies.
In theory, the expiration of merger conditions now and in September could allow Comcast to jack up the prices that small pay-TV providers or online streaming services pay for NBC programming and Comcast's regional sports networks. Comcast could also block or throttle online services in order to gain leverage over streaming companies during programming contract negotiations. Comcast could also exempt NBC online video content from its home Internet data caps while counting other companies' data against the caps.
President Trump's Justice Department hasn't said whether it will try to extend the Comcast/NBC conditions past September. The DOJ is facing pressure from Sen. Richard Blumenthal (D-Conn.), who urged the DOJ to extend the conditions and consider breaking up Comcast and NBC.
Consumer advocacy group Public Knowledge has also asked the DOJ to extend the conditions past this year. To do so, the DOJ would have to petition the US District Court for the District of Columbia.
Comcast objects to extension
Last month, Comcast told Ars that the conditions should not be extended:
"There is no credible basis to pursue an extension or modification of the consent decree or conditions," Comcast said. "For nearly seven years, Comcast has met or exceeded all of the commitments and obligations under the NBCUniversal transaction. We have filed six annual compliance reports with the FCC setting forth in detail our exemplary compliance track record, none of which has been challenged or objected to by the Commission or any third parties, including by any member of Congress. The DOJ, which has received substantial information about our compliance with the consent decree, has never pursued any enforcement action against us."
Since the merger, video competition has expanded greatly with the rise of online video distribution, Comcast also said. "We have reached dozens of content deals with MVPDs without loss of programming to consumers," the company said.
"The online video market is now incredibly robust and very different from what it was in January 2011," Comcast told Ars today. "Some of the most popular series on Netflix are produced by NBC (like The Unbreakable Kimmy Schmidt)."
Additionally, Comcast says that "The continually increasing broadband speeds our customers are taking have facilitated the explosion of online video programming."
But rival pay-TV companies have objected to the expiration of merger conditions related to programming contracts. The companies say the conditions are still needed to check Comcast's market power and control of programming. Cable company RCN wrote to the FCC last month; it asked the commission to impose new rules to essentially replace the arbitration conditions that just expired.
"Because the rationale supporting harm to competition and consumers in the Comcast-NBCU Order continues, an 'unleashed' Comcast-NBCU is certain to wreak havoc in the market, undermining rival distributors and harming consumers throughout the country," RCN told the FCC.
The American Cable Association, which represents small and mid-size companies, today called on the FCC to strengthen its program access rules. "The FCC and DOJ permitted Comcast to buy NBCU—but only if the parties abided by a series of conditions that ostensibly would alleviate the competitive harms," the ACA said. "The competitive concerns about vertical integration raised seven years ago by the FCC and the DOJ are undiminished today and require continued significant scrutiny."
reader comments
61