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FCC could get first Net neutrality complaint soon

A small video streaming company in San Diego says it will soon test the FCC's complaint process under its new Net neutrality rules.

The Federal Communications Commission's new Net neutrality rules have been in effect for less than a week, and the agency is about to receive its first formal complaint from a company alleging harm.

Commercial Network Services, a San Diego-based company that operates webcams and streams live video feeds, said it will soon file a formal complaint against cable giant Time Warner Cable for charging it to deliver its streaming videos to its broadband customers, according to Barry Bahrami, CEO of the company. The Washington Post first reported the news of the complaint.

Bahrami accuses Time Warner Cable of "double dipping" by charging its broadband customers for access to the Internet and also charging companies, like Commercial Network Services, for delivering video to consumers who subscribe to Time Warner Cable's broadband service.

Because Commercial Network Services has refused to pay the additional fee that Time Warner Cable is charging it to send traffic to its customers, Bahrami says that Time Warner Cable is directing Commercial Network Services' traffic through a congested connection that serves Time Warner's broadband customers. Bahrami says by doing this Time Warner Cable is severely degrading the quality of its streams, such as the San Diego Web Cam, which offers live streaming of the San Diego harbor.

"This could all be changed in a few minutes if it were not for Time Warner greed," he said

Once filed, Commercial Network Services' complaint will be the first formal complaint that the FCC has received since its Net neutrality rules went into effect last week. Net neutrality is the principle that all Internet traffic be treated equally and that wireless carriers and Internet service providers not put businesses or customers at a disadvantage.

Earlier this year, the FCC passed new rules to protect Net neutrality to replace rules that had been thrown out by a federal court in January 2014. As part of the new rules, the FCC expanded the scope of Net neutrality and in addition to formulating clear cut "bright line" rules that prevent broadband providers from blocking or slowing down traffic and prevents them from charging for so called "fast lanes," the new rules also for the first time allow the FCC to determine if commercial deals between private companies exchanging Internet traffic are "fair and reasonable" or whether these deals could harm consumers' access to the Internet.

Instead of applying blanket restrictions on companies exchanging Internet traffic as the agency has in the "bright line" rules, the FCC will examine disputes over Internet "interconnection" on a case-by-case basis. While the FCC's ruling from one case to another could vary, how the agency handles this first complaint once it's filed could give broadband and other Internet companies a better sense of how far the FCC will go in terms of regulating the Internet.

The dispute is similar to disagreements that streaming video provider Netflix has had with other broadband providers Comcast and Verizon. Netflix's CEO Reed Hastings publicized the disputes his company had with these two broadband providers last year. As a result, the FCC expanded the scope of its Net neutrality rules to include a provision that allowed it to examine these deals more closely.

In a separate Net neutrality development today, the FCC said it plans to impose a fine up to $100 million fine on AT&T for allegedly misleading customers who subscribe to its unlimited data plans. The FCC has accused AT&T of violating the transparency rule of the agency's Net neutrality regulation. The transparency rule was the only part of the FCC's original 2010 Open Internet order that was not thrown out when the court ruled against the FCC in 2014.

Critics, who oppose the FCC's new rules, say the FCC has overstepped its authority by even examining commercial agreements between companies exchanging Internet traffic. They fear the agency could try to use its authority to set rates on services or take other actions that could stifle competition.

FCC Chairman Tom Wheeler has denied that this is the agency's aim. While defending the new rules in front of a congressional hearing in March, he said he looked forward to getting a Net neutrality complaint filed under this new complaint process so that he could show critics how high the the FCC has set the bar for intervening in such commercial deals.

Commercial Network Services hasn't yet filed its formal complaint with the FCC, but Bahrami said the paperwork will be filed in the next few days.

The FCC declined to comment.

Time Warner Cable said in a statement that it is not violating the FCC's rule. It claims it does not charge companies exchanging traffic with it to pay fees so long as the amount of traffic the companies exchange is roughly equal. It said that under its policy, Commercial Network Services does not qualify for such an arrangement.

It also denies that it is deliberating slowing down the company's traffic to its broadband customers. And Time Warner Cable is confident the FCC will side with it in this dispute.

"Time Warner Cable's interconnection practices are not only 'just and reasonable' as required by the FCC, but consistent with the practices of all major ISPs and well-established industry standards," the company said in its statement.