Comcast to pay $800,000 to resolve FCC probe

WASHINGTON Wed Jun 27, 2012 6:09pm EDT

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WASHINGTON (Reuters) - The U.S. Federal Communications Commission said on Wednesday that Comcast Corp would pay $800,000 to resolve an investigation of its broadband-related merger conditions.

The FCC said it began the probe after it was tipped that Comcast was not properly marketing its standalone broadband services, violating a condition of its merger with NBC Universal that requires the cable operator to offer reasonably priced Internet services to consumers who do not subscribe to its cable offerings.

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

The consent decree adopted on Wednesday requires Comcast to pay $800,000 to the U.S. Treasury to resolve the dispute. It also, for the first time in FCC history, extends the merger condition for an additional year.

"The unprecedented merger condition extension, significant voluntary contribution, and robust compliance plan send a clear message to the American public and the communications industry that the FCC will vigorously enforce its merger conditions, to the ultimate benefit of consumers," FCC Enforcement Bureau Chief Michele Ellison said.

Sena Fitzmaurice, Comcast's vice president of government communications, said the company was pleased that it could address these issues constructively with the FCC and in a consensual manner.

Comcast, the No. 1 provider of video and residential Internet service in the United States, acquired a 51 percent stake in NBC Universal from General Electric Co last year.

Approval of the merger after a year-long review by the FCC and Justice Department came with a list of conditions to protect the public interest and prevent anti-competitive practices.

Among those conditions was a requirement to actively market for three years a standalone broadband service with speeds of at least 6 mbps for no more than $49.95 per month - equivalent to terms offered to consumers who bundled their cable and broadband services with Comcast.

"Comcast has incorporated the extensive commitments and conditions from the NBCUniversal transaction into the DNA of our business practices, including the commitment to offer standalone broadband Internet," said Fitzmaurice.

The company introduced a "Performance Starter" option for standalone broadband service to comply with the merger condition. The FCC probe questioned if that service could have been rolled out differently or better, Fitzmaurice said.

Wednesday's consent decree means Comcast must keep that standalone service in place through February 21, 2015.

It also mandates a dedicated Internet page for standalone broadband services, a major advertising promotion in 2013 for the broadband services and training for customer service representatives to ensure they are familiar with the Performance Starter option.

(Reporting by Jasmin Melvin; Editing by Gary Hill)

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