UPDATE 1-US FCC says will act on Web neutrality if needed

(Recasts with comments from panelists)

CAMBRIDGE, Mass, Feb 25 (Reuters) - A top U.S. regulator on Monday said the U.S. Federal Communications Commission is ready to stop broadband providers from interfering with users' access, while a leading Internet service provider denied accusations it discriminates against users.

"I think it's important to understand that the commission is ready, willing and able to step in if necessary to correct any (unreasonable) practices that are ongoing today," FCC Chairman Kevin Martin said at a hearing on Internet practices.

Comcast Corp (CMCSA.O: Quote, Profile, Research, Stock Buzz), the second-largest U.S. Internet service provider with more than 13 million subscribers, denies impairing some applications and reiterated that it merely manages the system for the good of all users.

"We don't block any Web sites or online applications, including (file sharing)," said David Cohen, Comcast's executive vice president.

The dispute over so-called "network neutrality" pits open-Internet advocates against some service providers such as Comcast, who say they need to take reasonable steps to manage traffic on their networks.

The FCC has been looking into complaints by consumer groups that Comcast has blocked some file-sharing services which are used to distribute large digital media files such as TV shows and movies.

The hearing, which included an executive with Verizon Communications (VZ.N: Quote, Profile, Research, Stock Buzz) and professors from some of America's top law schools, is part of a broader FCC inquiry into what network management techniques are reasonable.

Cohen said Comcast manages some peer-to-peer file uploads at some times of the day. But he said the technique is designed to have a minimal impact on users.