An appeals court in Texas has sided with the Federal Communications Commission (FCC) in a case that could force the company to pay a $1.5 million fine for its failure to inform customers when they had been billed for service.
The $1,000 fine could force Comcast to change its customer service policies to ensure that customers are notified before they are billed, said Jeffery Hargrove, the FCC’s deputy general counsel.
In addition, the ruling could force other large internet companies to follow the same approach.
The FCC issued a decision late last month that said Comcast had failed to inform its customers that they were being billed for their monthly Comcast services.
But that ruling was overturned by the 9th Circuit Court of Appeals.
The 9th Court of Appeal ruled that the FCC had no authority to enforce the law that requires large internet service providers (ISPs) to inform their customers of any unpaid bills.
The appeals court ruled that Comcast must pay the $1 in cash for customers whose service was not received.
The company could have been required to pay the fine to cover the cost of the appeals court ruling, said John Vannucci, a partner at Davis Polk & Wharton law firm.
But the court didn’t allow the company the option.
“The $3 million or $4 million, $5 million, whatever, I think it’s a reasonable outcome to reach,” he said.
In his opinion, Judge Michael P. Tessler said that Comcast had not complied with a federal law that prohibits it from “failure to provide reasonable notice of the existence or non-existence of an unpaid billing obligation to customers.”
But the appeals panel disagreed.
“This is not an attempt to strike down the statute,” Judge Michael M. McShane wrote for the majority.
“The statute is a valid regulation that prohibits ISPs from engaging in conduct that would reasonably cause a customer to believe that his or her bill has been refused.”
Tessler wrote that the commission’s decision was based on an interpretation of the law, which is “compelled to the exclusion of other statutory requirements.”
McShane said that he had read the FCC ruling, but had not seen the actual text of the decision.
The commission is expected to release its final order later this week.
“There is no legal requirement for Comcast to provide notice of unpaid bills,” he wrote.
“There is an obligation to notify customers.”
Tessling did not immediately respond to a request for comment.
Comcast did not respond to questions about the appeal.
“In the absence of any legal requirements, Comcast is required to make a reasonable effort to inform all customers of the unpaid billing obligations that they are liable for,” the appeals commission wrote in its decision.
“Comcast has done so in good faith and has met the burden.”
Comcast is also facing a lawsuit in California, which accuses the company of failing to notify users that their account was delinquent when it was due.
The company also faces lawsuits in Arizona, Tennessee and Texas.