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Peer-to-peer networks go legit

/ Source: The Associated Press

The technology best known for pirating movies, music and software online is increasingly being adopted by businesses as a cheap way to get video content to customers.

A number of startups are embracing so-called peer-to-peer technology and have convinced some big-name media companies to use them to deliver legal content.

"In 2005 when we met with content owners, 'peer-to-peer' was a dirty word," said Robert Levitan, chief executive of file-sharing company Pando Networks Inc. "In 2007, finally, content owners came and said 'Yeah, we think there's a role for P2P.'"

Levitan was speaking Friday at the first "P2P Market Conference" of the Distributed Computing Industry Association, a trade group with more than 100 members.

Pando is a prime example of mainstream acceptance: It's providing the means for NBC to provide DVD-quality downloads of its shows, including "The Tonight Show" with Jay Leno.

But 90 percent of P2P downloads are still of illegally copied content, according to David Hahn, vice president of product management at SafeNet Inc., which tracks the networks.

Hahn said 12 million to 15 million people are file-sharing across the world at any one time, mainly on the BitTorrent and eDonkey networks. The attraction of file-sharing is not just that it's free — there's also content available that can't be had by legal means, like TV shows that haven't aired in Europe.

The BitTorrent software was invented and set free on the Net in 2002 by Bram Cohen. He later started a company to profit from the technology. In 2005, BitTorrent Inc. stopped providing links to copyright content in 2005 and now helps studios distribute movies.

Overall, acceptance of P2P technology is higher in Western Europe, where piracy using the technology also happens to be especially rampant, according to SafeNet.

The British Broadcasting Corp. uses P2P technology from Verisign Inc. for its iPlayer, which streams some of its most popular shows. French TV channels are using software from 1-Click Media, which claims 1 million users per day. The Norwegian public broadcasting service recently started using BitTorrent software to get its shows out.

Media companies don't need P2P technology to provide video over the Internet. They can hire so-called content delivery networks, or CDNs, to get the media to their customers, at a cost of about 25 to 35 cents per gigabyte. Doug Walker, chief executive of BitTorrent Inc., put the size of this market at $680 million this year.

But P2P technology can offload much of the work of the CDNs by having subscribers who have downloaded the data already send it to subscribers who haven't. That cuts the cost of delivery by anywhere from 50 to 90 percent, according to several of the companies presenting at the conference.

The P2P programs used by Pando and Verisign are quite different from BitTorrent and eDonkey. They don't let consumers distribute their own content. What comes down the pipe is strictly from the media companies that contract with the P2P companies. The consumers may not even know they're using P2P software — all they know is that they've installed video player software on the computer.

So far, Internet service providers have been left out of the equation even though they're saddled with the burden of conveying all the extra traffic. Some of them have partially blocked or slowed down P2P traffic to keep it from swamping their networks.

But the adversarial relationship is changing: At the conference, Verizon Communications Inc. presented results of a test that showed that by sharing information on its network with Pando so it could optimize downloads, the companies were able to speed downloads and reduce Verizon's cost of carrying the traffic.

However, not all Internet service providers are likely to get on board with that solution. It may work well for phone companies, but cable companies have a different structure to their networks, and it may not address their concerns.