Comcast Asked to Open ISP Deal

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A federal court here was asked Sept. 8 to require the Federal Communications Commission to order Comcast Corp. to reveal terms of a non-exclusive Internet carriage agreement with AOL Time Warner Inc.

The Consumer Federation of America and other public-interest groups are suing over the agency's decision to approve the Comcast-AT&T Broadband merger last year without requiring the production of the ISP agreement.

AOL Time Warner concluded the ISP deal with AT&T Corp. as part of the $9 billion restructuring of Time Warner Entertainment L.P. The deal occurred while the Comcast-AT&T Broadband merger was pending before the FCC and the Justice Department.

The Justice Department reviewed the ISP deal, as did some FCC staff members. But the FCC rejected the CFA's demand seeking access to the agreement on a confidential basis.

The CFA wants to determine whether the ISP agreement bars AOL from providing "video streaming" to Comcast subscribers. Comcast sources said the company has not disclosed whether such a restriction was in the ISP deal.

Inclusion of such a restriction, the consumer groups contend, would show that Comcast has market power to exclude Internet-based competition to its primary video business and that the FCC erred in approving the merger without assessing the agreement's impact on video competition.

Cheryl Leanza, a lawyer with Media Access Project who represented CFA, said Comcast didn't want customers switching from ESPN on its cable systems to ESPN on AOL Broadband.

"Comcast would prefer that you watch it on their system," Leanza told the three-judge panel of the U.S. Court of Appeals for the D.C. Circuit.

FCC attorney Joel Marcus said that the FCC did not regulate agreements between cable operators and ISPs, and thus the agency did not have a rule in place to declare video streaming an out-of-bound provision.

"For this reason, the commission found that [CFA's request] was not a merger-specific matter," Marcus said.

He said it was his "understanding" that although the Comcast-AOL deal included a video streaming restriction on AOL, it did not preclude AOL customers from visiting streaming sites through their own Web surfing.

Oral arguments were heard by U.S. Circuit Judges A. Raymond Randolph, Harry T. Edwards, and Merrick B. Garland.

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