The Federal Communications Commission on Wednesday announced a settlement with Comcast after finding the company had not been aggressively marketing its standalone Internet service, a condition of its merger last year with NBC Universal.
To win FCC approval for the $13.8 billion deal last January, Comcast pledged to “visibly offer and actively market” a standalone broadband service to customers for $50 a month for three years.
The FCC imposed the condition to ensure the merged company did not force customers to buy bundled services such as cable television when they only wanted high-speed Internet.
But the FCC said a year-long investigation found that Comcast failed to mention the standalone broadband service, known as "Performance Starter," in mailings to many customers, did not make the service easy to find on its website, and did not offer the service at its retail locations.
"The bureau investigated and found that while Comcast had made some efforts to comply, it had failed to fully implement the condition," FCC spokesman Neil Grace said.
As part of the settlement announced Wednesday, Comcast must offer the standalone Internet service until Feb. 21, 2015 -- a year longer than the original requirement. The company must also conduct a major advertising promotion of the service next year; train employees to market the service, and ensure that customers have access to a web page about it.
Comcast also agreed to pay a $800,000 fine.
"Consumers should not be forced to sign up for cable or satellite television as a condition of receiving Internet access," Sen. Al Franken, D-Minn., who had expressed concerns about Comcast fulfilling its merger commitment, said in a statement.
"Today’s announcement by the FCC is a huge win for consumers who have fewer and fewer options for obtaining affordable broadband service."
In a statement, Comcast spokeswoman Sena Fitzmaurice said the company was "pleased" that Comcast and the FCC were able to "address such issues cooperatively and constructively in a consensual manner."
"We look forward to continuing to offer and market Performance Starter in additional ways and with additional outlets," she said. "We believe this product offers a choice consumers want in the marketplace.”
As another condition of the merger, Comcast pledged to offer broadband service for $10 a month and a laptop computer for less than $150 to eligible low-income families.
This commitment has been more controversial. Since Comcast rolled out that program, known as "Internet Essentials," last fall, community activists have argued the company has not done enough to market the discounted service.
In January, a small group of protesters camped outside Comcast's headquarters in Philadelphia, claiming that many low-income residents never heard of the program because it was not widely advertised and the program's restrictions prevented those who needed discounted Internet from accessing it.
In late January, Comcast announced it would expand the eligibility of the program to include families with children eligible for reduced school lunches, double the speed of the program's Internet service and streamline the application process.
At the time, the company said an estimated 160,000 people had signed up.
Fitzmaurice said the company would be filing a report with the FCC detailing its progress on that program next month.
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