While not admitting to any wrongdoing, Comcast has preliminarily agreed to pay $16 million to settle a class action lawsuit that claims the cable giant blocked or throttled peer-to-peer traffic to its customers. The maximum payout to members of the class action suit is set at $16.
The proposed settlement stems from a November 2007 lawsuit filed by Jon Hart, a California Comcast subscriber who claimed Comcast slowed or cut off P2P file-sharing networks like BitTorrent and Gnutella in violation of Comcast's user's agreement. Hart's share of the proposed settlement is $2,500.
Several months after Hart's lawsuit, the FCC (Federal Communications Commission) began an investigation into similar complaints against Comcast and in August 2008 found Comcast guilty of network neutrality violations for throttling P2P traffic. The FCC also found that Comcast misled customers by not properly disclosing its P2P policy.
Comcast has admitted it slowed some P2P traffic at the time to increase network management efficiency. Comcast subsequently appealed the FCC decision.
For his part, Hart sued Comcast alleging breach of contract and bad-faith dealings. Hart said he upgraded his Comcast broadband service in September 2007 to Comcast's Performance Plus service, which promised speeds of up to 12M bps for downloading large files such as video and games. The lawsuit stated that Hart specifically upgraded his service to take of advantage of file-sharing services.
Comcast's throttling, the suit claimed, significantly slowed or stopped his downloads.
"Defendants have disseminated and [continue] to disseminate advertising that they know or should have reasonably [known] is false and misleading," the lawsuit stated. "This conduct includes, but is not limited to, promoting and advertising the fast speeds that apply to the service without limitation, when, in fact, defendants severely limit the speed of the service for certain applications."
In light of the FCC decision, Comcast has since changed its policy and imposed a 250GB cap for residential broadband customers.
Under the class action settlement, class members must file a claim by Aug. 14, 2010.