Telecom giant KPU Telecom has agreed to pay nearly $500 million to settle a class action lawsuit alleging it violated the Communications Act by failing to protect consumers’ rights to internet access and the right to free speech online.KPU is a unit of Telecom India, India’s largest telecommunications company, which is a subsidiary of Bharti Airtel.
In a statement released on Monday, the company said it had paid the $1.3 billion settlement.KP Telecom will pay $2.6 billion to resolve the class action and will reimburse consumers for $200 million in expenses, it said.
The $500-million settlement comes as a result of the government’s recent move to remove net neutrality protections from the Communications (Amendment) Act.
“We are very pleased to reach this settlement and the opportunity to bring relief to our customers,” said Rajendra Keshavan, KP Telecom chairman and CEO.
“This is a positive outcome for our shareholders, the public and the environment.”
The group of consumers and Internet service providers (ISPs) represented by the California-based class action said in a filing with the court that KPU violated consumer rights under the Communications Decency Act, the Telecommunications Act and the Communications Protection Act by not protecting consumers’ ability to access the internet.
They also said KPU failed to provide broadband services and other consumer services at the level required under the act.
The lawsuit was filed in October by consumers in San Francisco and Los Angeles who alleged that KP’s wireless services and wireless internet service failed to comply with the requirements of the act, the Consumer Product Safety Commission (CPSC) and the FCC.
The complaint alleged that the company did not ensure that broadband internet access was available to its customers or that the service providers did not block access to websites.
In the court filing, KUPU said it will make a payment of $1 billion in damages to consumers in the settlement.
“The parties have reached an agreement on the final terms of the settlement and we look forward to working with the CPSC and the Federal Trade Commission to enforce it,” KUPD Telecom said in the filing.KUPD said it would also be “providing refunds for consumers who had their service interrupted or terminated” because of the alleged violations.
The group said it has reached an $8 million payment agreement with the FCC and will work with them to ensure that other internet service providers are also required to pay to redress any violations.