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Zoom Telephonics, Inc. (OTCBB: ZMTP) ("Zoom"), a leading provider of modems and the second largest supplier of retail cable modems in the United States, today filed a complaint against Comcast at the Federal Communications Commission ("FCC" or "the Commission"). The complaint charges that Comcast, the nation's largest cable service provider in the US, has violated the Commission's rules through an equipment certification program that restricts subscribers' right to attach cable modems to Comcast's network. The complaint also notes that in addition to harming the competitive retail market for cable modems, Comcast's recently expanded retail modem testing regime and unilateral refusal to even test certain devices also violate Comcast's own public commitment to abide by the Commission's Open Internet principles.
While the FCC's regulations implementing Section 629 of the Communications Act permit Comcast to restrict subscribers' ability to attach cable modems only to prevent such devices from causing harm to the network or facilitating theft of service, the vast majority of Comcast's Physical and Environmental (P&E) testing regime has nothing to do with either of these objectives, the complaint alleges.
Rather, the complaint alleges that Comcast's P&E testing regime contains a host of unreasonable, irrelevant, time-consuming, and costly requirements that curtail the availability of cable modems at retail outlets and thereby encourage subscribers to lease or rent cable modems directly from Comcast. These new standards, among other things, address a modem's weight, labeling, and packaging as well as its physical appearance following the application of various substances, such as waxes. They also require a cable modem to suffer no degradation in performance at temperatures far in excess of those generally found in the United States and well above the requirement for electronics equipment such as an iPad or a personal computer. Moreover, Comcast's new testing regime requires cable modem manufacturers to pay for Comcast personnel to conduct lengthy site inspections at the manufacturer's facility, with business class airfare and expensive hotels also paid for by the manufacturer.
"Comcast is clearly violating FCC rules designed to encourage an open, competitive market for cable modems at retail," said Frank Manning, Zoom's President and CEO. "This is especially dangerous given Comcast's position as the largest provider by far of cable modem service in the US. We cannot allow Comcast to use its certification process as a way to unfairly restrict consumer choice in cable modems. If Comcast's testing regime is allowed to stand, the availability of cable modems from retailers in the United States will be restricted; and that will affect anyone who wants to save money by buying a cable modem instead of leasing one from a cable operator, no matter which operator's service a customer uses."
This year Comcast instituted a new Physical and Environmental (P&E) testing regime that cable modems sold at retail must pass before Comcast will allow them to be attached to its network. This new testing program is in addition to four other sets of testing that a cable modem must pass before it may be attached to Comcast's network: a set of tests designed to ensure that a cable modem meets FCC requirements; safety testing administered by Underwriters Laboratories or another nationally recognized testing laboratory; a set of tests administered by CableLabs; and another certification testing regime administered by Comcast itself.
In order to remedy the anticompetitive effects of Comcast's conduct, protect the competitive retail market for cable modems, and safeguard the open nature of the Internet, Zoom's complaint requests that the FCC, among other things, find Comcast in violation of the Commission's rules, enjoin Comcast from requiring cable modems sold at retail to participate in its new testing regime, enjoin Comcast from requiring cable modems sold at retail to participate in any Comcast testing unrelated to preventing harm to the network or theft of service; order Comcast to publish its standards for testing cable modems and provide a detailed justification for how each test relates to whether a device will harm its network or facilitate theft of service; require Comcast to provide an explanation of why the CableLabs testing process does not fully address any concerns about cable modems harming Comcast's network or facilitating theft of service; and order other appropriate relief.
About Zoom Telephonics
Founded in 1977 in Boston, Zoom Telephonics, Inc. designs, produces, markets, and supports communication products under the Zoom, Hayes®, and Global Village® brands. For more information about Zoom and its products, please see www.zoomtel.com.
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