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When Microsoft released the eagerly awaited Xbox 360 game Halo 3 last month, fans waited through the night outside stores to get their hands on the first copies. How much more convenient it would have been if the game had simply arrived on their computers as soon as it was released. 鈥淚f we had a delivery service, we could deliver the content electronically and maybe offer a discount,鈥� says Jin Li of Microsoft Research in Redmond, Washington.

Unfortunately that wasn鈥檛 possible. Microsoft鈥檚 connections to the internet would have been overwhelmed had they needed to send out more than a million copies of the game. That could soon change if the company decides to deliver games using a peer-to-peer (P2P) delivery system, which alleviates such bandwidth burdens.

While the workings of P2P systems differ between applications, it could go something like this: instead of every customer downloading the game directly from Microsoft鈥檚 servers, the software would first be distributed to a small number of computers. These 鈥渟eed鈥� computers would transmit the game to purchasers, who would in turn pass the game to other purchasers, or peers, all in a legal and accountable manner. Microsoft itself would need far less bandwidth to deliver the software in this manner than if everyone connected directly to its servers.

Microsoft is not alone. P2P networks were first popularised as the technology behind music file-sharing network Napster. They now look to be the future of high-quality content delivery. Warner Brothers in the US is using the BitTorrent P2P system to deliver video, the Canadian Broadcasting Corporation (CBC) is banking on P2P software to deliver live TV, and universities are building P2P systems to boost robustness at the core of the internet (see 鈥淪pread it around鈥�).

But while P2P applications remove the data bottleneck for the organisation that originates the content, the surge in data exchange between ordinary users鈥� computers is consuming huge swathes of internet bandwidth (see Graph). The business models of the internet service providers (ISPs) that supply that bandwidth have yet to account for this growth in use. Feeling the pinch, some are fighting back, and the way this plays out will determine whether P2P can realise its potential in delivering high-quality video and software directly to our PCs.

For most of us, most of the time, the internet operates according to a 鈥渃lient-server鈥� model. Each time you want to download a web page, for example, an individual copy of that page is sent from the web server to your computer. This has worked well for reading news, accessing email, listening to radio and even viewing low-quality video, since these applications require relatively small amounts of data. But as the internet gears up to deliver high-quality video and television, the client-server model is beginning to creak.

Take the problem faced by the CBC. To upload content to users it has to buy bandwidth, which can cost about $150,000 per year for a 45 megabits/second 鈥減ipe鈥�. Under a client-server model, this could stream high-quality video to up to 60 computers simultaneously, so servicing the CBC鈥檚 6 million customers would be prohibitively expensive, not to mention technically challenging.

Like the researchers at Microsoft, to get around these problems, Mohamed Hefeeda and colleagues at Simon Fraser University in Burnaby, British Columbia, Canada, is building a P2P network for the CBC. Great news for the broadcaster, but what about the ISPs that transport the content between peers?

Home computer users with broadband connections typically buy their bandwidth from an ISP at a monthly flat rate. That connection tends to lie unused most of the time: 鈥淭he internet service providers are counting on that,鈥� says Dan Wallach, a P2P expert at Rice University in Houston, Texas. In contrast, P2P networks are designed to squeeze every last drop of the network bandwidth available to them. 鈥淥nce you actually start using P2P networks, you break the business model of the ISPs,鈥� says Wallach.

鈥淥nce you actually start using P2P networks, you break the business model of the ISPs鈥�

P2P data now accounts for 60 per cent of daytime internet traffic and 90 per cent at night, according to Klaus Mochalski of German internet-traffic management firm Ipoque, so it is a serious problem for ISPs. Mobile bandwidth providers are especially concerned, he says, because their networks are smaller.

Call to arms

So what options do ISPs have? Metering bandwidth and charging users who exceed a certain limit is an option, but is unpopular with customers, who prefer to pay a flat rate. To conserve its bandwidth, an ISP can also choose to cut a customer off if they are generating levels of P2P-like traffic that exceed conditions of fair use for a home broadband connection. Or they can restrict the bandwidth available to that user 鈥� an action euphemistically called 鈥渢raffic shaping鈥�. The P2P software developers aren鈥檛 taking this sitting down, of course. 鈥淭here is sort of an arms race going on,鈥� says Wallach.

It used to be that P2P applications were easy to detect, because they always used a particular 鈥減ort鈥� on the computer to communicate. Later, P2P software developers got smarter, constantly shifting the ports they used. In response, Sandvine, Ipoque and other companies that produce programs to detect P2P activity have resorted to something called 鈥渄eep packet inspection鈥�, a technique that allows them to examine the contents of internet data packets and determine if they belong to a P2P application. In retaliation, P2P software developers are trying to ensure that the data they send does not show any characteristic patterns, a technique called protocol obfuscation.

To make P2P packets even harder to detect, several P2P software providers, including BitTorrent and eDonkey, have more recently moved to total encryption of the packets, according to Mochalski. 鈥淚t鈥檚 a cat-and-mouse game,鈥� he says.

While the battle rages, researchers are working on ways to minimise P2P networks鈥� impact on ISPs. Hefeeda鈥檚 team, for example, is looking to cut the financial burden on ISPs. Peer-to-peer traffic mostly shuttles between a multitude of ISP networks, and such transfers cost the ISPs money. By developing 鈥渓ocation aware鈥� P2P applications that allow computers to recognise which network they are on 鈥� and instruct them to share data within their own network as much as possible 鈥� Hefeeda hopes to lessen the cost to ISPs. 鈥淲e try to find the local sender closest to me, not just within the network, but also with the least number of links,鈥� he says, to reduce the load on the internet to the minimum.

Li is researching another type of location-aware P2P network. Instead of keeping traffic within an ISP鈥檚 network, his P2P solutions allow computers to exchange data only within a home or office network. Once a computer within a network has downloaded a software update or game from Microsoft, say, it only passes it to computers on its network, bypassing the ISP entirely.

There should be a way to keep everyone happy. Content providers want P2P because they can use it to deliver high-quality content and charge extra for it. With such a burgeoning demand for their services, ISPs will inevitably profit from the bandwidth explosion 鈥� the devil lies in figuring out how to charge for it, and how much.