Comcast has decided to settle one of the lawsuits brought about over their use of the Sandvine BitTorrent throttling hardware to 'manage' their network. For those who were affected, there is the possibility of receiving a payment from a $16 million fund set up by the Internet service provider.

The Comcast BitTorrent throttling story is one of the major case studies for net neutrality. More than two years have passed since we broke the story that led to an FCC investigation and even lawsuits from affected users.

In one of the class action suits that were brought about from the long-running incident, Comcast has now agreed to settle, meaning those affected may be eligible for compensation.

About two and a half years ago, reports surfaced on what appeared to be the throttling of BitTorrent connections by Comcast. The throttling, first discovered by Rob Toplowski, was confirmed by TorrentFreak, and was first reported in August 2007. Other news agencies picked it up later, especially after tests by the EFF and Associated Press confirmed events and included reports that other network based activity was also affected.

Comcast long-denied any wrongdoing, but a leaked memo revealed that the company went as far as instructing its front-line staff to lie about the issue. Then the FCC got involved and things deteriorated. At a hearing at Harvard, Comcast packed the venue with people they bussed in, but it didn’t stop the BitTorrent throttling practice being termed a ‘hacker technique’.

Eventually, some assurances were made, and the FCC ordered Comcast to stop using Sandvine. Meanwhile lawsuits had been filed. One of these, Hart vs Comcast of Alameda, attained class action status, and there is now a proposed settlement.

Comcast has agreed to put $16M into a fund to pay BitTorrent users that were inconvenienced by the ‘network management’.

The downside is the size of the settlement. If you qualify, you can receive a maximum of $16, yet still Comcast refuses to accept it did anything wrong. The administrators of the settlement have set up a website to deal with questions about the case which can be found at www.p2pcongestionsettlement.com

It’s not hard to imagine that some customers will feel this doesn’t go far enough, and undoubtedly the discussion on this topic will continue. For the affected Comcast users there is still time to decide how to proceed – the deadline for claims is August 14th 2010. Meanwhile, network neutrality remains a pipe dream for most people.