Comcast agreed to pay a $16 million settlement to prevent further litigation after it was found that the company violated regulations by the Federal Communications Commission by regularly blocking peer-to-peer traffic as part of its business practice.
Specifically, Comcast was subject to a heated class-action lawsuit elicited by irate customers for blocking P2P file-sharing packets, in particular BitTorrent, in 2007 and 2008. At that time, Comcast denied accusations that it was responsible for slowing down or otherwise impeding BitTorrent, but eventually conceded that it had engaged in controversial network "traffic management" techniques in order to free up bandwidth.
Comcast's indiscretion elicited an investigation from the FCC, while fueling the anger from numerous customers.
U.S. District Court Judge Legrome Davis approved the initial settlement deal last week. Another hearing in June will ultimately finalize the agreement.
Despite the fact that it is being forced to pay up to angry customers, Comcast did not admit culpability as part of its settlement deal, but instead defended its peer-to-peer network blocking practices as "appropriate," according to a company statement. The cable giant contended that it agreed to the settlement in order to "avoid a lengthy and distracting legal dispute that would serve no useful purpose."
It could be "that useful purpose" might have some relevance to recent federal legislation deeming the practice of P2P blocking illegal. The Federal Communications Commission ruled last August that Comcast's actions against P2P networks were unlawful and in violation of a 2005 Internet policy ensuring that consumers have the ability to access all forms of legal online content.
Comcast is in the midst of appealing the FCC's decision, maintaining that there were no plausible grounds for the agency's recently proposed net neutrality rules, which have yet to be enacted into legislation.
Under the terms of the settlement, affected Comcast customers involved in the lawsuit are to receive damages of up to $16 million - sans attorney's fees - for their extended inability to access Bit Torrent. However, details of the agreement stipulate that each affected customer won't receive more than $16 from the settlement.
Comcast has revamped its network management practices since they came under fire by the FCC, while claiming that it intends to adhere to more neutral techniques going forward. However, while it claims to walk the straight and narrow, Comcast could justify similar network management practices with a loophole in the settlement that failed to include a clause forbidding the company to block P2P traffic in the future.
