ISPs take aim at cutting filesharing costs

"ISPs take aim at cutting filesharing costs"

File-sharing Internet junkies, the scourge of media companies everywhere, have become a headache for Internet service providers (ISPs) too.

The proliferation of high-speed broadband Internet access has created an explosion in file-trading, an activity that hogs bandwidth and racks up big network costs for access providers.

Major music labels and Hollywood blame the emergence of file-sharing networks such as Grokster, Kazaa and eDonkey for opening up a black market trade of copyrighted materials that's eating into their business.

Now ISPs say that as much as 60 percent of data traffic zipping around their networks is in the form of large music, movies and software files. For a large ISP, the bandwidth costs needed to accommodate the traffic could run into the millions, if not tens of millions of dollars per year, experts say.

British technology start-up CacheLogic estimates the global cost of file-sharing to ISPs will top 828 million pounds in 2003, an expense that will nearly triple next year.

"What the ISPs are spending on bandwidth is one of their greatest capital expenditures," said Andrew Parker, a co-founder of CacheLogic.

The escalating bandwidth costs associated with file-sharing are not sending the ISPs' broadband services into the red, but the firms are anxious to bring it under control.

"It is a potential problem. It's something that we need to manage quite sensitively," said Pierre Danon, chief executive of BT Retail, a division of BT.

DOUBLE-EDGED SWORD

And yet it's the popularity of sharing music, film and game files with other computer users that is drawing many customers to high-speed broadband Internet services in the first place.

A variety of ISPs including Europe's third largest, Tiscali, even promote their broadband services on peer-to-peer networks to woo users with slower connections.

But many industry watchers say the "all-you-can-eat" formula for selling broadband is coming to an end. According to Jupiter Research, nearly 60 percent of European ISPs either have instituted or are considering instituting bandwidth limits on data-hogging customers.

Holding some of them back is a concern among some firms that a cap on user's data allotment would anger customers who already pay roughly 50 euros in Europe per month for broadband access.

A TECHNOLOGICAL BAND-AID?

A few start-ups including CacheLogic and Canada's Sandvine Inc. have developed technological stop-gaps aimed at cutting down on costs without imposing drastic usage measures.

CacheLogic's Parker said many European ISPs are trialing a new computer server that it has developed, which places limits on file-sharing traffic flow.

The server, which operates on Linux software, largely confines file-sharing activities to customers of the same ISP, resulting in big potential cost savings.

ISPs tend to rack up high bandwidth costs when a customer trades files with a customer at an outside ISP. The costs escalate further when a user in the UK trades a file with somebody in, say, Asia.

"That's probably where the bulk of the cost is," said Fergal Butler, Internet technical consultant for UK cable company/ISP Telewest, referring to the longer-distance connections. "That's what you have to keep under control."


Source: Reuters, London