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Comcast settles class action suit on traffic blocking

The broadband giant offers $16 million to settle Pennsylvania case over throttling of P2P connections in 2007 and 2008, but admits no wrongdoing.

As we close the book on 2009 and ready for 2010, a legal settlement takes us back to 2007 and 2008, when Comcast got into trouble with customers and the feds for throttling peer-to-peer traffic on its network.

Comcast has agreed to pay $16 million to end to a class action lawsuit alleging the broadband provider promised and advertised certain download and upload speeds, but blocked peer-to-peer traffic on its high-speed Internet network.

"Comcast denies these claims, but has revised its management of P2P and is settling to avoid the burden and cost of further litigation," according to the proposed settlement, pointed out to us by Ars Technica.

The settlement, still pending in the United States District Court for the Eastern District of Pennsylvania, goes on to say Comcast will pay up to $16 million, which per share is an amount not to exceed $16. "The settlement is not an admission of wrongdoing by any party."

As for wrongdoing, the Federal Communication Commission sees it a little differently. Comcast is in the process of appealing an FCC ruling finding Comcast's throttling of BitTorrent traffic unlawful. That marked the first time any U.S. broadband provider has ever been found to violate Net neutrality rules. The FCC issued a cease-and-desist order and required the company to disclose to subscribers in the future how it plans to manage traffic.

Comcast had said that its measures to slow BitTorrent transfers, which it voluntarily ended in March 2008, were necessary to prevent its network from being overrun. Comcast later announced plans to reduce Internet service to customers it deems to be using too much bandwidth.