• by Wendy Davis  @wendyndavis, December 22, 2009

Comcast has agreed to pay up to $16 million to settle litigation about the company's former online traffic-shaping practices. The cable giant did not admit to wrongdoing as part of the deal, which would resolve seven potential class-action lawsuits stemming from its prior practice of impeding peer-to-peer traffic.

In a ruling issued last week, U.S. District Court Judge Legrome Davis in the eastern district of Pennsylvania granted preliminary approval to the agreement. Davis will hold a hearing in June to determine whether to finalize the settlement.

Comcast said in a statement that it believes its prior practices were "appropriate," but nonetheless agreed to settle in order "to put this matter behind us and avoid a potentially lengthy and distracting legal dispute that would serve no useful purpose."

Last August, the Federal Communications Commission sanctioned Comcast for singling out peer-to-peer traffic for unfavorable treatment. The FCC said Comcast's approach violated a 2005 Internet policy statement providing that consumers are entitled to access all lawful applications and content.

Comcast is currently appealing that ruling on the grounds that the FCC had no authority to enforce its neutrality principles, which were never made into regulations.

The proposed lawsuit settlement provides for account credits of up to $16 to affected subscribers, including consumers who were unable to use peer-to-peer services between April 1, 2006 and the end of last year. The settlement does not include an injunction banning Comcast from throttling peer-to-peer traffic in the future.

Comcast recently revised its network management practices and now uses protocol-neutral techniques. A spokesperson says the company intends to continue to use its current system for the foreseeable future.

Several consumers who sued Comcast for throttling traffic objected to the potential settlement, arguing that total damages of no more than $16 million are too low, and that any agreement should include an order banning Comcast from engaging in the type of traffic shaping that resulted in the lawsuits.

Among the opponents was software tester Robb Topolski, who first reported about Comcast's blocking of peer-to-peer traffic.

Davis rejected the critics' concerns in his preliminary approval order. "A proposed settlement of up to $16 per claimant, for damages that may not be easily proven or quantifiable, appears reasonable," the judge wrote. He likewise rebuffed complaints that the deal should include an injunction, writing that Comcast "has voluntarily ceased its allegedly problematic conduct," and that the settlement still allows people to bring new challenges if the company uses problematic techniques in the future.