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P4P Working Group wants to improve the way peer-to-peer Web sharing works, thus helping the entire internet to grow. The group is composed of major tech industry players including Verizon, Pando and Yale University, in whose labs the idea originated.

P4P (not to be confused with pay-for-placement, an advertising term) refers to a network management technology that will help Internet service providers route P2P traffic. P2P applications work by sharing files directly between user's computers. They generally allow traffic to route randomly, meaning you're as likely to be connected to a peer in Beijing as to one in Birmingham. However, distance matters, even on the internet.

A more intelligent system could reduce costs, speed traffic and make it easier for P2P-based applications to thrive. Joost, one of the most well-known Web 2.0 services to use P2P sharing, has joined the testing, and the group plans to propose its system as an international standard in late November.

A potential solution couldn't come at a better time. Taken together, the popularity and inefficiency of P2P sharing have seen it rise to account for more than half of all internet traffic, clogging networks and reducing the profit margins of internet service providers, which have to buy more network equipment simply to keep traffic flowing at the same speeds.

The P4P solution centers around those ISPs that have been forced to limit the transfer rates of peer sharers, or close connections entirely -- heavy-handed tactics that infuriate their customers. Traffic shaping, which is similar in that it assigns importance levels to different types of traffic, is also used at times.

ISPs that adopt P4P's standards will be able to install software to route traffic more efficiently, connecting people who are geographically closer and improving how all P2P traffic is routed across the internet. In preliminary tests, download speeds for users have as much as doubled, and link utilization has similarly improved, which could help reduce the traffic load on ISPs.

The tracking servers that P2P sharing applications use would also have to adopt the standards, which will be free of any license and open for anyone to use. Such servers can be owned by a company like Pando, or operated by a sharing site like Demonoid (recently in the news for having briefly been shut down).

Where P4P seems to fall short is in improving the flow of traffic when there aren't many peers seeking to download the same file. Laird Popkin, chief technology officer at Pando, told us that files without a large audience might not benefit, saying, "It's something where you have tens of thousands of people."

This implies P4P will favor commercial services like Joost, while not doing much for homegrown sharing networks with only a few dozen people seeking to download any given file. That would include most illicit file sharing services.

When we asked Popkin whether ISPs would use P4P for filtering out traffic that can't make use of the standard, he said that they probably wouldn't interfere, both for legal reasons and because of a widely-accepted principle called net neutrality.

Similarly, the routing software keeps sharers anonymous, only assisting in peer connection.

The P4P group, which is part of the Distributed Computing Industry Association, will present the new standard to an industry audience on November 27th, at the European Peering Forum in Barcelona.