Comcast Settles With FCC On Broadband Service Merger Condition

Cable giant agrees to pay $800,000 to U.S. Treasury

In an unprecedented move, the Federal Communications Commission found that Comcast didn't do enough to live up to one of the merger conditions it imposed when it approved the cable giant's merger with NBC Universal. Namely, it didn't do enough advertising, according to the FCC, and that's costing Comcast $800,000.

At issue was Comcast's commitment to offer standalone broadband Internet services at a reasonable price with sufficient bandwidth to customers that don't subscribe to Comcast's cable services.

Following its investigation, the FCC concluded that Comcast was not adequately marketing the service known as Performance Starter, which Comcast launched in February 2011, one month after the FCC's merger order.  

As part of a consent decree, Comcast agreed to cut an $800,000 check to the U.S. Treasury. Comcast will must also offer the Performance Starter $49.95/month service for an additional year beyond the FCC's original merger order, to at least Feb. 21, 2015.

The action by the FCC is the first consent decree in the agency's history extending a merger condition.

"Today's action demonstrates that compliance with Commission orders is not optional," said FCC Chairman Julius Genachowsi. "The remedies announced 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."

In a statement, Comcast spokeswoman Sena Fitzmaurice said the company was pleased it was able to address the issues cooperatively and constructively. "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," she said. "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 consent decree with Comcast is the second time the FCC took the cable to task for not living up to its merger conditions. Earlier this year, the FCC ordered Comcast to move Bloomberg TV next to other news channels on its cable lineups.