ISPs drawn into illegal file sharing blame game

Peer-to-peer traffic is one of the biggest headaches for internet service providers, but now a Swedish company says it has developed technology that can help handle the load.

Last week, Stockholm-based Joltid said three major service providers in Europe licensed its PeerCache technology - software designed to reduce costs of network traffic by caching frequently traded digital files within file-swapping systems.

PeerCache is built to work for FastTrack, one of the most widely used P2P protocols and the underpinnings of such popular applications as Kazaa and iMesh. Joltid said its traffic on FastTrack protocols can account for nearly 70 per cent of the network's total bandwidth. PeerCache plugs in to the ISP network and temporarily caches FastTrack P2P traffic, helping to lessen the bandwidth burden.

But the technology could prove controversial, by putting ISPs in the hot seat in the internet piracy debate. One indicator of this potential is that Joltid's European partners have not publicly disclosed their association with the company.

In the US, copyright laws protect ISPs from liability for their users' activities. With PeerCache software, ISPs would cache, or temporarily hold, digital copies of pirated files on their servers so they're more easily accessible to traders on Kazaa and other FastTrack systems. But holding copies of copyrighted material could make ISPs accomplices in illegal file trading, at least according to an early survey by one recording industry trade association.

According to a statement from the IFPI, the trade association representing the international recording industry: "Just using the word 'caching' doesn't mean that the service is automatically exempt from copyright liability."

"It's not clear what Joltid and its customers are actually doing," the statement added. "We are looking into the service and will then decide on any further action."

Joltid founder Niklas Zennstrom, who co-founded Kazaa, defended PeerCache and the ISPs using it by saying that European Union laws allow service providers to temporarily cache traffic on their servers regardless of the legality of the file.

"One should bear in mind that [whether] an ISP is caching a file or not does not make the file more or less available for end users," he said. "It only impact[s] the load on the ISP's network.

"Thus, by caching P2P traffic, ISPs are not encouraging or (discouraging) users to download files," he said. "It is just a way for the ISP to organise their network."

He added that the alternative for ISPs is to buy more expensive routers or upgrade their cable facilities. "No one is arguing that it is illegal for an ISP to buy bigger Cisco routers to deal with increased P2P traffic," he said. Zennstrom said that numerous other ISPs are currently testing the software in Europe.

Stefanie Olsen writes for CNET News.com