Peer-to-peer (P2P) networks are often called the Internet’s “dark side.” In many ways, this is a fair characterization—but it isn’t the fault of the technology that gives P2P a bad rap. It’s because the telecom and entertainment industries have yet to develop business models to make money from it.
This article looks at P2P technology, legitimate and illegitimate uses of it, and how the OSS/BSS community might just play a critical role in helping telecoms to monetize P2P.
Legitimate P2P Networks
Peer-to-peer networks are collections of end systems that “peer” with each other to exchange application information. The communications paradigm is remarkably powerful, and often superior to traditional client-server models for certain applications. (For a quick introduction to P2P networks, please Click Here.)
The first “killer” P2P application is file sharing. As discussed in the sidebar, P2P technology is ideally suited for file sharing, because it is very efficient and offers low-latency download speeds. Today a number of peer file sharing networks (such as Gnutella and BitTorrent) are used by researchers, software developers and IT folks to distribute open source code, software images, patches and other large data sets.
Enterprises have adapted P2P technology to develop private content delivery networks. For example, CacheLogic and Kontiki (recently acquired by VeriSign) use P2P technology to help enterprises distribute large files, such as software images and video training materials. This is particularly attractive for global organizations, or for applications that require wide-area content distribution, because it reduces their wide-area networking costs.
The second killer app is voice and instant messaging. For example, Skype uses peer-to-peer technology to bypass telco infrastructure (circuit, VoIP or otherwise) and instead allows clients to communicate directly via IP. Likewise, some instant messaging applications don’t rely on a central server to relay messages but instead peer directly.
And there are other uses of the technology. In fact, the largest distributed system in the world—the Domain Name System (DNS)—is peer-peer technology. Also see the recent “virtual cable” announcements (for example, by Veoh Networks) in which P2P distribution protocols are used to bypass cable and IPTV infrastructure to deliver paid programming.
The Dark Side
The question is, are these applications of P2P technology good for operators? The answer is no. Since Skype and other peer telephony products bypass public switching infrastructure, obviously the carriers lose that revenue stream.
But it is worse than that. Recent studies have shown that 30 to 70 percent of broadband usage is P2P traffic. That’s a staggering number—even if only 30 percent—and difficult to accept. If you think about it, though, P2P is used primarily for exchanging large file types such as multimedia content and software releases. Given that these media types are several orders of magnitude larger that typical web browsing content, VPN traffic and emails, the overhead figure is conceivable and represents a staggering cost to the service providers. To make matters worse, P2P protocols are disrupting access networks, because the latter were designed for downloads, not uploads. This is not good for either operators or broadband consumers.
The next big question: Are P2P networks good for the entertainment industry? Definitely not. The issue with modern P2P networks is that they have no inherent control mechanism. Unlike first-generation P2P networks such as Napster, they have no central directory, or control point, where content can be cataloged, filtered, or tracked. Therefore, in public P2P networks, it is nearly impossible to manage what material can be distributed on the network. There is no governing entity to sue or shut down, and users operate in a very stealthy manner. This makes P2P networks ideal for distributing copyrighted material.
The reality today is that just about all copyrighted material finds its way onto P2P networks. At the click of a button you can find, or distribute, any digital good—a motion picture, music, entertainment programming, software, information products—at virtually no cost (other than your broadband connection). What more could a thief ask?
This reality is, of course, horrific for the entertainment industry. It is estimated today that nearly 100 million files are exchanged on P2P networks each day. Assuming 10 percent of that traffic could be monetized (meaning that 10 percent of the users would pay for it), then at $1 per item the entertainment industry is losing $10 million daily.
Finally, what about consumers? Are P2P networks good for the rest of us? Yes and no. Yes, if you use the network for legal file downloads. Otherwise no, because the negative uses of P2P technology actually stymie innovation, which is at the very heart of the Internet. Ask yourself, why would content aggregators and developers embrace technologies that are used primarily to steal their goods? Why should developers expose themselves to the risk that their applications might be used for illegal purposes? Why should network operators invest in network infrastructure, when as much as 70 percent of the bandwidth used today is for content theft—in other words, theft of their service? They would and will not. The conclusion is that everyone loses, except for those who are comfortable with pirating copyrighted material.
What Can Be Done?
The industry has tried a few approaches. The first is to sue the developers of P2P applications and services. There is some basis for this, because if you can show that the primary use of a particular product is for the theft of goods, then courts are willing to shut that business down (consider the Grokster decision and, of course, Napster for examples). The problem, however, is that modern P2P networks are fully distributed, so they don’t rely on a central source to catalog content. Who, therefore, can the recording and entertainment industries go after? They cannot blame the protocol developers, such as BitTorrent, because its P2P technology has legitimate uses.
The second option is for the carriers to block P2P traffic outright. This is problematic, because net neutrality and privacy come into play. Operators that try this invite a PR nightmare, possible lawsuits and consumer backlash. This battle was hashed out already, when Madison River blocked Vonage. Besides, any attempts to block P2P traffic will certainly prompt the development community to encrypt the signaling and data transport, which will only make the problem worse.
Regardless, it’s not certain that operators would choose to fight that battle anyhow. Yes, network overhead is problematic. But if the operators can’t get a slice of the revenue for every iTunes download or YouTube view, then why should they install control mechanisms to help those businesses make more money?
Another view is that network saturation can work to an operator’s advantage, because it drives revenue via bigger pipes and helps the operator differentiate its own QoS-based services, such as VoIP. For example, a network with error rates of even a few percent and moderate delay will devastate the quality of Vonage service. But it wouldn’t impact cable’s VoIP offerings, because the QoS enabled by DOCSIS ensures that its VoIP traffic gets through unharmed. So why not let P2P take its destructive toll on third-party VoIP providers?
The other approach is to work something out at the media or application layer via DRM solutions. But CDs aren’t encoded with DRM. iTunes and Microsoft’s DRM technologies are closed solutions that require media coding at the source. This limits interoperability and drives users nuts. Even Steve Jobs admits the solution has failed—ironic, given the success of iTunes, which uses Apple’s FairPlay DRM technology.
Digital Rights Realities
On the one hand, MySpace and YouTube prove that user-generated, independent and amateur content can generate significant commercial opportunities that create huge value. On the other hand, no single industry constituency can solve the piracy problem. The content industry can’t, via DRM. The recording industry can’t sue everyone (although it seems to be trying). The telecom industry can’t, by blocking or degrading P2P traffic. Content aggregators can’t, though they haven’t really cared to try, and this might change as copyright owners demand that aggregators remove their copyrighted information (just as Viacom made YouTube remove its content).
The Digital Property Global Registry
It comes down to this: the industry needs to put forth meaningful ways to identify, promote and commercialize digital assets while protecting copyright holders. If it doesn’t, all stakeholders will miss out on the opportunity to generate revenue from IP-based entertainment distribution.
So how does one solve this protection problem? Many argue that if content is going to make it onto the network (which it will), and if DRM solutions are going to fail (which they have), then our thinking needs to shift toward an open rights assertion solution.
Such a solution starts with a directory that catalogs all of the content, and its various derivative descriptions. This can take the form of a hash value of the file (a hash is an algorithm-generated “number” that is close to a unique identifier of that file). Or it can include more sophisticated characteristics of the media, including fingerprinting, layered hashes, pattern matching and more.
The second element is a rights and ownership “assertion” interface that allows the copyright owners to declare distribution properties associated with its content. For example, these rights assertions might stipulate no distribution, or limit distribution to certain applications, or establish playback rights, etc. Such a description does not have to be static. It can include playback rules, such as limiting how long the user can access the media, the number of uses, and pricing and settlement rules.
The third element is the APIs, which allow the elements in the distribution chain to interface with the public rights directory. The system determines whether a file or media object conforms with the rights definition; reports on or blocks violations; and takes action based on the rights definition such as announcing the rights, promoting the file, or referring users to a web site.
This approach is roughly illustrated in Figure 3. Here, copyright owners submit lists of infringing hash values to the directory (interface not shown). The rights assertion database holds the rights and content description, and uses a web-services interface to approved content filtering points such as applications, content aggregators, network operators, and network or user devices.
Figure 3—Rights assertion, distribution and enforcement.
Once a digital registry is in place, the industry can implement any policy or business logic for any conceivable electronic distribution model (P2P, web, FTP and others). For example, using deep-packet inspection technology, network operators can monitor file exchange (P2P or otherwise), identify content traversing the network, and take certain actions such as blocking the traffic, sending a violation warning or notice, informing the copyright holder, issuing a payment request, and more. Likewise, application developers (browsers, audio players, search tools and the like) and content aggregators can implement the same approach.
Can a Digital Rights Registry Work?
Technically a digital rights registry could work, but pragmatically it is a tough challenge, because it involves significant cooperative effort and a major change in attitude by some key players:
The entertainment industry has to sign on and accept a non-DRM-based approach. It might. It might not.
Operators have to believe that there is money in it for them. There is, but only if the content providers give them financial incentive. Again, they might. They might not.
Privacy groups would have to allow the operators to inspect network traffic to determine whether digital goods are copyright material. This might not happen without legislative action, but operators and software vendors could make it a condition of use.
Operators would need to deploy the deep packet inspection infrastructure to do the filtering. Cisco and others have the technology, but it isn’t free.
Copyright holders have to invest the energy to assert their content rights in the directory, and maintain those rights (constantly watch for derivative content, etc.). This is attainable, but not without issues.
P2P protocol developers would have to cooperate, and leave encryption on the sidelines.
Most importantly, the OSS/BSS community would have to bring the pieces together and make the solution work. This is not trivial. Interfaces would have to be developed to perform the real-time content authorization and conformance-compliance, and to execute the business rules or policies relating to blocking, warning and so forth. Billing interfaces would need to be in place to work out payments and settlements. CRM interfaces would need to support ordering, product management, packaging, pay per content and more.
The specialized support structure that would be needed is somewhat daunting, but there is just no easy solution to piracy and digital rights. The stakes are extremely high, though, and the current approach isn’t working. At this point, most feel it is not a question of whether, but when, the industry will have to come together to work out a pragmatic rights management solution. We’ll keep you posted.
If you are interested in learning more about an initiative called DPGR (Digital Property Global Registry), a non-profit group that is working on a rights assertion standard, please contact the author, Dr. Matthew Lucas, by email at: mlucas@telestrategies.com.
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