Claim your $16! Comcast P2P settlement now final

By Nate Anderson | July 10, 2010 | Ars Technica

Despite a campaign to derail the settlement, a long-running class-action lawsuit against Comcast and its P2P-blocking ways has ended. If you were a Comcast subscriber between April 1, 2006 and December 31, 2008, and you used the Ares, BitTorrent, eDonkey, FastTrack, or Gnutella P2P networks, congratulations—you've just won $16 in the litigation lottery.

A California resident filed Hart v. Comcast back in 2007, alleging that the cable giant wasn't living up to its contract because it limited "the speed of certain internet applications such as peer-to-peer file sharing and lotus notes [sic]."

This was a reference to Comcast's infamous use of "TCP reset packets" to limit the number of P2P connections, a decision that eventually led to a long FCC investigation that went against Comcast (and was recently overturned by a federal DC court).

Other, similar lawsuits were filed, but Hart had been first, so he became the lead plaintiff in a class action suit that was consolidated into a single case in Pennsylvania. In late 2009, Comcast agreed to settle the case by setting up a $16 million compensation fund; each affected subscriber could pick up $16 to make up for the pain of those interrupted P2P downloads of (*cough*) Linux ISOs.

Robb Topolski, the network engineer and barbershop music aficionado who discovered Comcast's throttling technique, objected. When users had paid around $50 a month for service, $16 seemed like small compensation. "If that tiny amount of money is compensation, then there is no penalty to Comcast for interfering with its customers, for failing to disclose it, for repeatedly lying about it, and for taking so long to stop it!" wrote Topolski two months ago. He asked people to object or exclude themselves from the settlement.

But the lead lawyer in the case told Ars that it was the best deal anyone was going to get. "This is a good settlement," said Eric Somers. "If you opt out, you're basically giving that money to Comcast."

Last week, the federal judge overseeing the case agreed that it was in everyone's interests to settle the murky case (How exactly does one quantify the damages here? And didn't Comcast's contract make clear that the company would manage "congestion"? And how did Comcast's win in the DC Circuit affect the issue?).

Besides, almost no one objected. "Despite... a vigorous opt out campaign by Robert Topolski, the named plaintiff in one of the coordinated actions, only 6 individuals filed objections to the settlement (one of which was later withdrawn)," wrote the judge, and "only 143 individuals submitted timely requests for exclusion (some of which actually indicated an absence of individual claims to pursue), and no state or federal officials intervened. In light of the estimated size of the class (1,000,000 individuals), the percentage of objections (.0006%) and opt outs (.0143%) is exceedingly low."

So the settlement is now final. Comcast account holders have until August 29, 2010 to file a claim in the case. The lawyers will do a bit better, splitting $3 million for their work on the case.

Comcast Loses Class Action Lawsuit vs. its P2P Users

Comcast owes P2P users $16; yes, they should take it
By Nate Anderson

Robb Topolski, the man who helped unearth Comcast's P2P interference, wants Comcast customers to opt out of the $16 they have coming to them from a class action lawsuit. But Eric Somers, the lawyer leading the class-action case, just can't understand the sentiment.

"This is a good settlement," he told Ars. "If you opt out, you're basically giving that money to Comcast."

At issue is the settlement of the Hart v. Comcast class action, a resolution three years in the making. When John Hart noticed that his BitTorrent connections would "hang"—sometimes for an entire night—he called up Somers and asked if he knew anything about it. Comcast was still denying that P2P upload blocks were in place on its network, and it took the legal team time to figure out what was happening.

Hart's case was the first one filed, and his lawyers were eventually certified as counsel for the entire class of affected Comcast users. Since 2008, Somers and his team have argued that Comcast violated the FCC's Internet Policy Statement (PDF); the FCC famously agreed. Comcast agreed to settle the class action suit rather than proceed to trial.

The deal puts Comcast on the hook for $16 million, plus up to $3 million extra for the lawyers. That $16 million will be split up between every Comcast subscriber who was affected, with a cap of $16 per person—but no one gets any money unless they sign onto the class at the official settlement website. Any unclaimed money goes right back into Comcast's coffers.

Best possible result?

Somers believes this is the best deal he could get—and better than anyone is going to get in the future. As the judge noted, the damages here aren't easily quantifiable, and Comcast argued that people were barely affected; they could still do e-mail, browse the Web, even download on BitTorrent. Where was the real harm?

As for putting that $16 million pot to better use, say by funding some bigger public project, Somers said he'd love to do that—but courts frown on class-action awards going anywhere but to those actually harmed.

Sixteen dollars isn't enough to do much more than buy a bottle of decent wine, but Somers says that those who want the small individual payouts to do more common good should donate them somewhere like the Electronic Frontier Foundation. "That would be fantastic," he said.

Besides, he argues, if you're concerned about the settlement, look at what just happened in DC. There, the Court of Appeals for the DC Circuit recently tossed out the FCC's entire authority over "network management"and invalidated the agency's Comcast order. If the case went to trial, the ruling "makes it more difficult to win the case, absolutely."

What about the common complaint about class actions, that they disburse tiny amounts of money to victims but concentrate large sums on a single law firm? "There was an enormous amount of work" on this case, Somers said, pointing out that his firm has fronted the money on this case since the beginning and that it fought to keep its own award from coming out of the general class settlement fund.

After creating the $16 million pot of cash, Somers now wants to see people claim it: "I don't think anyone's going to do any better than that."