Although ISP’s in the US are resisting record labels' demands to release the names of individuals who illegally distribute copyright music, it seems they too may be losing out to the Napster style peer-to-peer networks. A study by Canadian network management firm Sandvine claims sharing files over the internet is increasing running costs for ISPs because they have to ‘access the internet infrastructure’ more often and for longer, for which they incur a network access charge from the company who owns said infrastructure.
Many ISPs ‘cache’ (store copies) of popular websites on their own servers so that users do not access the web infrastructure so often – but this is not possible with peer to peer exchange. For those ISPs who offer ‘anytime’ access for a set fee the increase in expensive file sharing can threaten their profit margins. "By inflating the financial pressure on service providers' already low margins, P2P is quickly undermining the business model for basic internet access," the report says.
How ISPs will react to this finding is unclear. A Freeserve spokeswoman, who admitted P2P exchanging accounting for 60% of the traffic on their networks, told the BBC: "It is up to customers what they do online but it does use up large amounts of costly bandwidth and the cost has to be shared by all consumers." But some fear that if ISPs increase subscription fees to cover their new costs those customers who only use their internet access for simple emails and web browsing will lose out. Some ISPs have floated the idea of having a tiered pricing system, barring P2P activity on cheaper packages. But others fear such moves would create bad PR: "These approaches can easily be positioned as punitive by internet lobby groups and competitors, generating dissatisfaction amongst subscribers," the report says.
But it is more likely ISPs will look for a way of turning the popularity of P2P networking into an commercial opportunity, rather than discouraging it. Quite how, though, remains to be seen.