Comcast 2014 Annual Report Download - page 24

Table of Contents
diction, franchises typically last for a fixed term, obligate the franchisee to pay franchise fees and meet service quality, customer
service and other requirements, and are terminable if the franchisee fails to comply with material provisions. The Communications
Act permits franchising authorities to establish reasonable requirements for public, educational and governmental access (“PEG”
)
programming, and some of our franchises require substantial channel capacity and financial support for this programming. The
Communications Act also contains provisions governing the franchising process, including, among other things, renewal
procedures designed to protect incumbent franchisees against arbitrary denials of renewal. We believe that our franchise renewal
prospects are generally favorable, but cannot guarantee the future renewal of any individual franchise.
Approximately half of the states in which we operate have enacted legislation to provide statewide franchising or to simplify local
franchising requirements for new entrants. Some of these statutes also allow new entrants to operate on more favorable terms than
our current operations, for instance by not requiring that the new entrant provide service to all parts of the franchise area or
permitting the new entrant to designate only those portions it wishes to serve. Certain of these statutes allow incumbent cable
operators to opt into the new state franchise immediately or later when a competing state franchise has been issued for the
incumbent cable operator’
s franchise area. However, even in those states, the incumbent cable operators sometimes are required
to retain certain franchise obligations that are more burdensome than the new entrant’s state franchise.
High-Speed Internet Services
We provide high-speed Internet services over our cable distribution system. Our high-
speed Internet services are subject to a
number of regulatory obligations, including compliance with the Communications Assistance for Law Enforcement Act (“CALEA”
)
requirement that high-speed Internet service providers (“ISPs”)
implement certain network capabilities to assist law enforcement in
conducting surveillance of persons suspected of criminal activity, and the FCC is considering new requirements for ISPs.
Open Internet Regulations
In February 2015, the FCC adopted new open Internet regulations but the text of the order has not been released yet. The FCC
announced that the order reclassifies broadband Internet access service as a “telecommunications service,”
making it subject to
common carrier regulation under Title II of the Communications Act. The FCC, however, has indicated that the order will forbear
from a number of utility-
style regulations, such as rate regulation, tariffs, and unbundling requirements. The FCC also announced
that the order adopts rules that bar ISPs from blocking access to lawful content, applications, services or non-
harmful devices;
prohibits ISPs from impairing or degrading lawful Internet traffic on the basis of content, applications, services, or impairing or
degrading the use of non-
harmful devices; prohibits ISPs from favoring some lawful Internet traffic over other lawful traffic in
exchange for consideration (i.e., no paid prioritization); prohibits ISPs from prioritizing Internet content and services of their
affiliates; establishes a new general conduct standard that prohibits ISPs from unreasonably interfering with or unreasonably
disadvantaging the ability of consumers to select, access, and use the lawful content, applications, services, or devices of their
choosing or of edge providers to make lawful content, applications, services, or devices available to consumers; and expands the
FCC’
s current Internet transparency rules. In addition, the FCC explained that the agency has now asserted jurisdiction, for the first
time, over Internet traffic exchange, so interconnection arrangements will now be subject to a statutory requirement that all charges,
practices, classifications, and regulations for and in connection with interconnection must be just and reasonable. All of these
requirements will be subject to FCC enforcement and potential third-party claims for damages or equitable relief.
Until the order is released, we are unable to determine what specific requirements will apply to our business or how they will apply
to our business, nor can we predict what the impact of such requirements would be on our business.
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Comcast 2014 Annual Report on Form 10
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