Comcast has agreed to settle a class-action lawsuit alleging the nation's largest cable company impaired the use of peer-to-peer file-swapping applications, and will pay up to $16 million -- minus $3 million in attorneys' fees and other costs -- to customers who believe they were affected.
In a statement, Comcast said: "We are pleased to have reached a settlement in these consolidated class action lawsuits. Although we continue to believe that our network management practices were appropriate and in the best interests of our customers, we prefer to put this matter behind us and avoid a potentially lengthy and distracting legal dispute that would serve no useful purpose."
Comcast was sued by several customers who variously claimed breach of contract or that the operator violated consumer-protection laws by misrepresenting its broadband service as "unfettered" and that it provided "the fastest Internet connection." Those complaints were consolidated into multidistrict litigation in the U.S. District Court for the Eastern District of Pennsylvania.
The cable company's practice of impeding P2P traffic during times of peak congestion on its networks drew national attention -- and scrutiny from the Federal Communications Commission, then headed by chairman Kevin Martin -- after the Associated Press confirmed Comcast was limiting the ability of BitTorrent applications to transfer a copy of the King James Bible. Comcast's P2P "blocking" was originally publicized by Oregon resident Robb Topolski, who was a plaintiff in the class action.
The FCC subsequently issued an order requiring Comcast to change its network-management practices and finding that it violated the agency's network neutrality principles. Comcast is fighting the FCC's ruling in federal court; the U.S. Federal Appeals Court for the D.C. Circuit is scheduled to hear oral arguments on Jan. 8 in the case and is expected to rule within three months.
In its statement Tuesday, Comcast said the network-management practices that were the subject of the consumer lawsuits "are a thing of the past. Our network management practices at issue here were consumer-friendly and clearly disclosed to our subscribers in full compliance with all applicable legal requirements. Our goal at all times was to manage our network effectively for the benefit of all of our customers. We are pleased the court rejected each and every one of the objections lodged by certain parties and preliminarily approved the settlement in all respects."
Two law firms -- Lexington Law Group and class-action firm Scott + Scott LLP -- were appointed as co-class counsel. "This settlement is a great result for Comcast customers," Lexington Law Group partner Mark Todzo said in a statement. "It creates an efficient and effective mechanism that will put money back in the customers' hands without them individually going to court."
Under the terms of the settlement, individual Comcast subscribers are eligible to receive a payment of up to $16.
Current or former Comcast broadband customers may be eligible to get a refund or credit if: they used or attempted to use Comcast service to use the peer-to-peer file-sharing software -- including Ares, BitTorrent, eDonkey, FastTrack or Gnutella -- any time from April 1, 2006, to Dec. 31, 2008, and were unable to share files or believe the speed at which files were shared was impaired; and/or attempted but were unable to use Comcast service to use Lotus Notes to send e-mails any time from March 26, 2007 to October 3, 2007.
Comcast customers who wish to make a claim for settlement benefits may call (877) 567-2754 or visit www.P2PCongestionSettlement.com for more information.
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