Zoom Shows How Comcast Abuses Its Market Power to Restrict Competition

November 29, 2010 , , ,

Net neutrality means that consumers have the right to use lawful applications and devices on their broadband connections.  With its secret blocking of BitTorrent, Comcast has shown that it doesn’t think much of application freedom. Today, as a complaint by Zoom Telephonics to the FCC spells out, it’s clear that Comcast doesn’t think very highly of device freedom, either. (Here’s a link to a PDF of the complaint.)

Zoom is a Boston-based company that’s been around for quite a while. I believe I bought a Zoom modem in the 1990s, when I upgraded my 14.4 modem to a blazing fast 28.8k. That was the last modem I bought, since my next computer just had a 56k modem built in—which I stopped using as soon as broadband service became available. But Zoom was able to adapt to these drastic marketplace shifts, and now sells broadband modems and other equipment.

Zoom’s cable modems have to undergo rigorous testing by CableLabs—an organization set up by cable companies for device certification and standards-setting. Historically this testing has been expensive, but doable. On top of that testing, many major cable operators have their own sets of tests that go beyond what CableLabs requires. These tests are a hassle, and are of dubious necessity, but Zoom has always complied.

But now Comcast—the very same Comcast that is before the FCC right now, asking for approval for its merger with NBC Universal—has decided to leverage this “testing” to destroy third-party cable modem competition. Comcast has decided that Zoom must now make ruggedized, mil-spec DOCSIS 2.0 modems that can operate in extreme weather conditions while looking good in the process: absurd requirements for devices that are supposed to be low-cost.

This new Comcast-specific testing costs $25,000, and goes far beyond the already-costly and thorough safety and compatibility tests required by CableLabs, the FCC, and Underwriters Laboratories. For instance, Comcast has come up with a number of “Physical and Environmental” tests, that concern (among other things): The strength of the modem’s packaging, the placement of labels on the device and bar codes on the packaging, how the modem dissipates heat, how the modem reacts to sudden voltage fluctuations, how it reacts to the application of various chemicals, how much it weighs, and how it performs under extremes of temperature and humidity.  Comcast further requires that Zoom pay for a team of Comcast engineers to fly to Asia and stay in a fancy hotel while they conduct a site visit of the modem’s manufacturing plant.  None of these arbitrary barriers are necessary to protect consumer safety, prevent theft of Comcast service, or protect Comcast’s network from harm. 

There are a number of policy implications to this. The biggest issue: This is a clear violation of net neutrality and open Internet principles. One of the key principles of net neutrality is the “right to attach”—that consumers should be able to use devices of their choice. Last year’s NPRM on net neutrality put it this way: “a provider of broadband Internet access service may not prevent any of its users from connecting to and using on its network the user’s choice of lawful devices that do not harm the network.” Comcast is violating that principle by refusing to certify harmless devices.

Zoom makes both DSL and cable modems, and it’s interesting to contrast the two markets. Deploying a DSL modem is just about as easy as deploying a new kind of telephone: You make it and sell it. (Of course there are details—to even sell a new kind of telephone handset requires Part 68 testing—but the bar is comparatively low.) I don’t recall reading any reports of rogue DSL modems taking down the phone system. Zoom’s complaint shows how the cable universe is a different story. The hurdles to deploying cable versus DSL modems come from the DNA of the different companies involved—just compare the Carterfone world of telephone companies, where you can use any telephone equipment you want, versus the proprietary set-top box world of the cable companies. In a time of broadband convergence, these arbitrary distinctions don’t make sense.

This is yet more evidence that Comcast’s merger with NBC should not be allowed—the company is a net neutrality recidivist, with a track record that suggests it can’t be trusted to respect Internet openness.  It’s also an example of the problems that happen when device certifications are handled by organizations who don’t really want to see too many compatible devices on the market—something we’ve also seen with CableLabs’ handling of CableCARD devices.

The FCC has plenty of opportunities to fix the structural problems that allow a broadband ISP, on a whim, to attempt to destroy competition in an equipment market. In addition to the Comcast/NBC merger proceeding and the Zoom complaint, the FCC is specifically directed by statute to assure that devices like Zoom’s are commercially available.

But the best opportunity has been on the FCC’s agenda all year: the Open Internet proceeding. The Commission is rumored to be finalizing an order that would codify a set of enforceable net neutrality rules, to adopt at its December meeting. Let’s hope that the order ensures that consumers continue to benefit from the competition that companies like Zoom provide.

About John Bergmayer

John Bergmayer is Legal Director at Public Knowledge, specializing in telecommunications, media, internet, and intellectual property issues. He advocates for the public interest before courts and policymakers, and works to make sure that all stakeholders — including ordinary citizens, artists, and technological innovators — have a say in shaping emerging digital policies.