On Fertile Grounds

The Indian broadband policy envisaged Internet subscribers in the country at
around 40 mn by 2010 from 18 mn in 2007. It estimated broadband subscribers at
around 20 mn from 9 mn in the same time period. But, the mid 2008 numbers
reported by Trai are 11.66 mn Internet subscribe (excluding mobile subscribers
with access to wireless data) and 4.38 mn broadband subscribers (with a download
speed of 256 Kbps or more). Not only do the numbers fall below the envisioned
target the reported quarterly growth rate of 5.09% for Internet subscription and
13.18% for broadband subscription need to meet higher expectations.

Broadband Gap

The Indian Internet and broadband market assesed at Rs 5,359 crore in FY
2007-08 still has a large untapped potential, as the increasing purchasing power
of people should logically enable greater broadband and PC penetration. Also,
the top ten among the seventy-two broadband service providers account for 97% of
total subscribers leaving substantial room for higher competition.

The increase in broadband penetration rate would not only require favorable
government policy but also significant action from service providers. For
example, the announcement by the Ministry of Communication and IT to garner $2
bn to set up 112,000 rural broadband enabled community centers, rolling-out of
technologies like WiMax, Wi-Fi, Wireless LMDS and metro Ethernet by Indian
service providers to broadband enable the subscribers and offer to provide free
branded laptops with its Reliance NetConnect hi-speed Internet data card service
are the step in the right direction.

Applications over Broadband

The broadband shall enable not only popular applications like Internet
telephony, gaming, online TV, IPTV and social networking but also vital
applications relevant to India like localized content delivery, e-commerce, and
videoconferencing for telemedicine, surveillance, distant education, agriculture
information, e-governance and information kiosks.

The relatively new phenomenon like Peer-to-Peer (P2P) is fast getting adopted
among the users of broadband and shall be the driving force behind the increased
Internet traffic. The increased adoption of P2P network plus file sharing,
entertainment and lifestyle applications is further fueling the demand for
broadband.

This global phenomenon holds relevance in the Indian context since
empirically the P2P registration and use actually outpaces broadband adoption.
Globally, as P2P networks evolved from Napster to Gnutella to KaZaA and WinMX,
we see increasing data traffic across broadband networks (Sandvine, 2003).

Peer-to-Peer Networks

P2P is essentially a communication structure for users to interact directly,
without going through a centralized system. The expected benefits are enhanced
workgroup productivity and support to community activity.

The first generation P2P utilized the centralized server-client model. All
users are connected to a server which performs functions like maintaining
directory of users connected to the system along with their current address,
performing centralized search mechanism and seldom used content delivery e.g.
messenger and Napster. The more robust second generation P2P utilizes the
decentralized model (without a server) where all nodes on the network are equal
in their feature sets. The network like Freenet and Gnutella are agnostic about
number, address and content shared by the current users on the network. The
third generation P2P uses a hybrid of the central-server and fully decentralized
frameworks e.g. FastTrack, KaZaA, Goove and current Gnutella clients. Beside,
information sharing these networks also enables sharing of spare computing power
and storage of data among member nodes.

P2P Network Usage

As per the 2004 Blue Coat research, the P2P dominates the bandwidth usage by
residential Internet subscribers; amounting up-to thirty percent of network
bandwidth usage of some service providers. Eg for a UK ISP the P2P traffic
amounts to 12.2TB a day in 2008, and now makes up only 25.9 % of total traffic.

KazAa and Fastrack quoted 1.5 mn and 5.5 mn simultaneous users in 2003 and
BitTorrrent indexer is currently cataloging approximately 1.1 petabyte of
information. The market research firm Big Champagne quoted the simultaneous P2P
users as 9.67 mn for January, 2006. Market research firm, MultiMedia
Intelligence projects a 400% increase in P2P Internet traffic between 2007-2012
equating to 8 petabytes of traffic per month, and surprisingly it's P2P's lawful
uses that are seeing the biggest growth.

The availability of broadband and cd/dvd burning technologies is promoting
the user move from audio to video file resulting in higher average file size
e.g. one in five young US file sharers downloaded a movie in 2003. Though, the
non-commercial downloading is posing a serious threat to the sale of media via
new applications like video-on-demand.

Commercial Exchange

As the free network exchanges get increased subscription from Indian users,
it would make economic sense for few Indian service providers to roll out
commercial exchanges providing values like convenience, selection, ease of use,
price, trust, value added services and catering to personal preferences. The
commercial exchange can provide the functionalities of free exchanges (Open
Storage Format, membership, file sharing, payment and competition) while
providing higher quality content and more efficient distribution e.g.
peer-to-peer file sharing system which filters content based on list of
identifying fields. The users share whatever files from their hard drive but
search results returns 'official' versions of matched content from the legal
owner of those materials. The exact match, availability and quality have to be
ensured by the exchange. Similarly, an interesting P2P model named P4P is
deployed by Comcast in USA to 'localize' peer-to-peer transfers, using a server
to keep data transfers within an ISP's own network. Aim is to increase download
speed while reducing the peering-point loads.

Such initiatives, especially when industry is in nascent stage shall provide
the necessary P2P avenue for the intellectual property driven Indian companies
engaged in software, audio, video and gaming.

P2P Applications

Today the P2P file sharing has moved to the next level and used for on-line
information, data distribution, and grid computing and distributed file systems.
The OECD report on P2P networks provides the following examples:

• Free and paid high-quality Internet telephony service e.g. Skype, Reliance
  iCall etc.
• Solutions for real-time multimedia broadcast, radio, news broadcast, web
  conferencing, games and online collaboration. E.g. MetaASOs' mermaid suite of
  applications
• Data transfer between bank branches. P2P platforms are used for sharing
  proprietary information and distributing data in banking, insurance and other
  industries.
• Software sales via P2P networks at discounted price by Lindows (a Linux
  company). The number of simultaneous downloads are increased and lower
  networking costs are passed to the customers
• Administrative file sharing by government e.g. Use of P2P technology to
  exchange statistics and information between computers of government agencies
  by US government and federal agencies
• Distributed Computing via decentralizes computation tasks and reduces
  project cost and administration.
• Grid Computing where a grid links personal computers to form a virtual
  super computer using 'Globus' middleware. It enables users to create an
  infrastructure that allows them to share data, applications, processing power
  and storage.

P2P Service Providers

Beside the major P2P network mentioned previously, the few emerging global
and Indian startups in this space include:

• Reliance iCall is the beta version of Internet telephony software created
  by in-house team of Reliance Communications. It allows free PC-PC and PC-PSTN
  calling through its client for a small charge. Beside voice calling it also
  provides personalized features like address book, social networking
  capabilities and avatars.
• Mermaid product suite by Metaaso, created by young Indian technopreneurs.
  The software is used to broadcast news, real time video, web conferencing and
  other things. This software absolutely doesn't use any servers and can be
  concurrently used by billions around the globe. The expanding portfolio of
  products currently used for corporate trainings, meetings, broadcasting
  surgical procedures, broadcasting video files and file transfer by reporters
  from remote locations. Amongst early enterprise adopters are telecom and media
  companies, who want to extend their network, reach online and use the IPTV/News/Radio
  Broadcast features from Mermaid.
• FAROO implements web search based on peer-to-peer technology. It has
  distributed crawler that stores search data on users' computers.
• 39 Peers project is implementing open-source peer-to-peer Internet
  telephony software using the Session Initiation Protocol (P2P-SIP) in the
  Python programming language.
• Shareaza is a free P2P application running on the Gnutella network with
  great features and stability. Generally you can expect Shareaza's frequent new
  version releases to have cutting-edge features that will take other P2P apps
  months to catch up to.
• Indian start-up mCliques has launched the Cellmate, a J2ME based
  downloadable mobile client that enables users to start the peer to peer
  conversation on the cell itself.
• Obopay is an India mobile P2P payment and remittance service provider.
• Vuze has launched Vuze 4.0, a self-contained application where the
  searching and downloading of HD formats is done from one client.

The predominant revenue model for such service providers is via the
advertisements (Ads.) display on the site, Ads. attachment to client and Ads.
display on the free software. Additional revenue stream is from any user
requested feature / code customizations or branding. Commercial exchanges have
additional revenue stream via the transaction fee.

P2P Adoption in India

Peer-to-peer computing focuses on the networking as the key concept of the
business case. The P2P adoption is ramped up by the availability of enhanced
services features like structured classification and listing, verification and
certification of shared information backed by effective content distribution
schemes and security. Such features need to be made available by potential
Indian P2P application providers. The fact that sixty two percent of Indian use
Internet for chatting and approximately fifty one use it for visiting social
networking sites; provide a fertile ground for P2P service providers.

People interest and willingness to share information with others varies by
type of good being shared. According to an MIT report, the interest and
willingness to share is high for recordings and gaming software, medium for
motion pictures and news articles; and low for business software and books.
Given India originated content availability and interest among Indian users,
other two factors that shall boost the broadband traffic are minimized legal
risk and safeguarding the monetary value of shared item on P2P networks. Trai
shall start addressing these issues at an early stage to avoid problem at later
stage.

P2P further gets the boost from size of the network in terms of number of
people connected and titles available on the network. The Indian ISPs shall
encourage such communities on their network so as to boost traffic.

Critical Issues

The large scale sharing of content on the P2P networks raises the new
challenge for the regulator and corporate. The issues for corporate involves
reduced average bandwidth availability of the corporate network, lost worker
productivity and the legal risk via other's copyright information on their
networks. The IPR owners fear the loss of revenue via the non-commercial
redistribution of their works and regulators are struck between what portions of
such activity is illegal and what laws and safeguards need to be enforced,
adjusted or enacted to reduce illegal activities.

Looking at the benefits provided by such networks, Trai should not order
blocking of such networks by ISPs. Let bandwidth management or traffic shaping
remain an ISP issue. For copyright protection, Trai shall encourage use of
digital rights management (DRM) on the P2P networks similar to what has been the
practice in the software industry.

Furthermore, the Indian telcos shall deploy symmetrical communication channel
with better QoS to promote P2P traffic. The Indian P2P network shall use the
mechanism of feedback based performance score for improved connection
reliability and content quality. Furthermore, the P2P service providers shall
make their network secure from viruses via proper network security and user
authentication.

P2P as the Next Frontier

P2P concept started as a technical solution with messenger, file sharing
evolved to internet telephony, web conferencing and video broadcast and now seen
in non technical areas like P2P banking and Insurance and selling electricity
via P2P networks.

The Indian market is ripe for the P2P activities to kick start and calls for
many new start ups both as application providers as commercial exchange
intermediaries. The market research for US and OECD countries has indicated a
positive relationship between P2P file sharing adoption, size of file, intensity
of sharing and broadband availability. Even P2P network availability and trials
have influenced the young users to upgrade their Internet connection to
broadband. This is a significant finding for the country like India that is
encouraging the broadband adoption. The innovative P2P applications and local
content offerings backed by new breed of start-ups and favorable P2P network
regulations from TRAI will further accelerate the broadband subscriptions in
connected India.

Sanjay Chaudhary

The author is additional GM, global business, Reliance Communications

vadmail@cybermedia.co.in