The allegations sound distinctly familiar - a cable company intentionally interfered with the ability of its broadband subscribers to use peer-to-peer transmissions.
It's not Comcast Corp., which earlier this month won a landmark victory at the D.C. Circuit against the Federal Communications Commission in a similar case.
This time, it’s RCN Corp.
The Herndon, Va.-based company yesterday notified its broadband Internet subscribers of a proposed class action settlement involving its network management practices. [Disclosure: this reporter was one of those subscribers.]
In a suit filed in the U.S. District Court for the Southern District of New York in 2008, plaintiffs allege that RCN intentionally interfered with its subscribers’ ability to use the Internet by delaying or blocking their Internet use and transmission.
Specifically, plaintiffs say RCN “hindered or barred RCN broadband Internet subscribers’ ability to engage in peer-to-peer transmissions."
Public Knowledge president Gigi Sohn in a statement said she was “appalled” at the RCN case, calling it “yet another example showing why the Federal Communications Commission needs to be given the authority over Internet access service. As of now, there is no federal cop on the beat to protect consumers.”
Plaintiffs counsel Michael Reese of Reese Richman in New York did not return a call seeking comment.
RCN ”vigorously denies” the allegations, and agreed to settle the case without admitting any liability or wrongdoing. The company provides telecom service in the D.C. area, Boston, Chicago, New York, Philadelphia, and Lehigh Valley, and had revenue of $764 million last year.
RCN was represented by Bingham McCutchen partner Peter Neger. “RCN settled the case because it was in RCN’s best business interest to do so, to avoid the potentially significant legal expenses associated with class action litigation,” he said. “RCN has denied and continues to deny violating any laws or breaching any agreement with its customers.”
The terms of the settlement call for RCN to cease and desist all peer-to-peer (P2P) network management practices for 18 months.
The effective date is retroactive -- May 1, 2009, or “the date that RCN ceased P2P Network Management Practices,” according to the settlement. That means the 18-month period expires in November. An independent monitor will ensure RCN compliance.
In August 2008, the FCC sanctioned Comcast for throttling P2P traffic. Comcast sued the FCC, charging that the agency lacked the regulatory authority to do so. On April 6, the D.C. Circuit unanimously agreed, leaving the FCC's Internet jurisdiction in limbo.
In the RCN settlement, the company also agreed as of April 1, 2008 not to engage in any network management practices involving other forms of Internet traffic for 18 months.
It's a curious concession, considering the time period was up in October 2009 - in other words, RCN has promised not to do something it already didn't do. Neger explained that the preliminary settlement agreement was reached in July 2009, when the provision was still applicable (albeit for three months).
The settlement awards class counsel fees of up to $520,000, plus $20,000 in expenses. The named plaintiff, Sabrina Chin, gets $3,000.
The settlement must be approved by Judge Richard Sullivan.