FCC bandwidth subsidy doesn’t help BitTorrent, Inc.

The recent FCC order requiring ISPs to donate bandwidth to peer-to-peer services was supposed to protect the Innovative-New-Application from competitive duress, but BitTorrent, Inc. didn’t get the memo:

BitTorrent Inc., the file-sharing startup whose underlying technology is responsible for much of the piracy that plagues Hollywood, is laying off its sales and marketing department. The immediate cause of the layoffs: A failure to sell the Torrent Entertainment Network, BitTorrent’s attempt at an online media store, to Best Buy for a rumored $15 million. That deal fell apart, a BitTorrent insider believes, because of a recent FCC ruling on file sharing. CEO Doug Walker, who replaced troubled founder Bram Cohen last fall, had hinted at a rethink of the store in March. Walker’s also said to be rethinking BitTorrent’s “DNA” service, which sought to offer businesses a cut-rate online content-deliver service, using file-sharing technology to undercut Limelight and Akamai’s prices. BitTorrent is now thinking about making the service free, which would certainly count as “cut-rate” — but also suggests that it hadn’t had much success selling it.

While this has been going on, the good folks at Vuze have been trying to save their own bacon by facilitating piracy by searching The Pirate Bay and Mininova.

Maybe P2P has problems so deep that even Kevin Martin’s bandwidth subsidy can’t cure them. This has the feel of a developing story.

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2 Responses to FCC bandwidth subsidy doesn’t help BitTorrent, Inc.

  1. Brett Glass says:

    Interesting. Why would BitTorrent’s deal to sell its network to Best Buy fall through in the wake of an FCC ruling that favored BitTorrent by preventing ISPs from targeting BitTorrent’s bandwidth-hogging software for throttling… no matter how deserving it was of such treatment?

    Because, in the ruling, the FCC gave tacit approval to ISP pricing schemes which meter data by the bit and/or cap users’ total bandwidth consumption in a so-called “protocol-agnostic” way. (It’s a shame that the FCC did not allow equipment to use the most effective throttling method for each abusive application, because this optimizes the experience. But if it had done that, it wouldn’t have had anything to slam Comcast for.)

    In any event, it appears that any ruling which did not allow BitTorrent to shift absolutely unlimited costs from content providers to ISPs was sufficient to sink the deal. Which only goes to show that (a) cost shifting is BitTorrent’s only use for non-pirates, and (b) more traditional CDNs are better if you’re a content provider who is actually paying for your own bandwidth.

  2. George Ou says:

    CDNs can deliver your data in order for video on demand with some measure of predictability. P2P can’t deliver data in order and it’s not always predictable. There’s no way that someone paying $5 for a movie download is going to put up with a P2P download. People are ok with out-of-order downloads with variable predictability when they’re paying nothing for the content; especially when it’s copyrighted content.

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