updated 7/14/2008 12:40:19 PM ET 2008-07-14T16:40:19

A recommendation to punish Comcast Corp. for blocking subscribers' Internet traffic should serve as a warning to other service providers, the nation's top telecommunications regulator said Friday.

Federal Communications Commission Chairman Kevin Martin said he hopes his action will make network operators sensitive about putting "arbitrary limits on the way consumers can access information on the Internet."

The Associated Press reported Thursday night that Martin will recommend to his fellow commissioners that Comcast, the nation's largest cable company, be punished for violating agency principles that guarantee customers open access to the Internet.

Martin provided more details of his proposed disciplinary action in a meeting with reporters Friday.

Comcast was accused by consumer groups of blocking "peer-to-peer" Internet traffic, where users share large data files using special software. The complaint followed an AP investigation in October.

Comcast denies it blocks content, but says it uses "carefully limited measures" to manage traffic on its broadband network to ensure all customers receive quality service.

Martin wants Comcast to stop using its current practice, to tell commissioners where it has used it in the past, and to disclose to the agency and consumers what limitations will be placed on customers under its new traffic management plan, which it hopes to have in place by the end of the year.

Martin said he is not recommending a fine against Comcast because he wants to use the case as a means of laying out agency policy.

"It doesn't make the enforcement action less important," he said. "Oftentimes (what is) most important is to try to clarify what is allowed and what isn't."

Martin said he would circulate an order recommending the enforcement action among his fellow commissioners on Friday. The measure is scheduled for a vote at the agency's next open meeting, scheduled for Aug. 1.

Martin's action was in response to a complaint filed by Free Press and Public Knowledge, nonprofit groups that advocate for "network neutrality," the idea that all Internet content should be treated equally.

The FCC approved a policy statement in September 2005 that outlined a set of principles meant to ensure that broadband networks are "widely deployed, open, affordable and accessible to all consumers." The principles, however, are "subject to reasonable network management."

Comcast argues that the agency's policy statement is not enforceable and that the commission has "never before provided any guidance on what it means by 'reasonable network management.'"

On Friday, Comcast spokeswoman Sena Fitzmaurice said the company has not seen Martin's order and would not speculate on whether the company will challenge it if it is approved by a majority of the commissioners.

She did say, however, that Comcast has "consistently said that we don't feel the policy statement is enforceable as rules."

Comcast is moving toward a "protocol agnostic" form of network management, meaning it will focus on all traffic rather than just peer-to-peer. The new method is being rolled out in some test markets.

Martin's action will help the industry in terms of where the line is drawn on managing Internet traffic, said Craig Moffett, a cable and telecommunications analyst for Sanford C. Bernstein & Co. But he cautioned the FCC's action could lead to some unintended consequences.

"The fact that they will have to be protocol agnostic forecloses certain options," he said. "For better or for worse, the principle option that it leaves open is the simplest one of all, and that is simply charging more for more usage."

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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