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” â€” but also suggests that it hadn’t had much success selling it.
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.