Trading small 5 megabyte songs doesn’t considerably hamper a ISPs bandwidth, yet 4.5 gigabyte DVD rips shared among millions of people does. Internet Service Providers aren’t stupid, and realize the success of the broadband revolution is largely attributable to the activities transpiring on P2P and file-sharing networks.

To some extent ISPs have in effect become victims of their own success. With a majority of their traffic absorbed by file-sharing, ISPs are in a continuous state of upgrading and investing their networks – a very costly affair. To mitigate these costs, ISPs have two choices; block P2P traffic or cache P2P traffic.

Blocking P2P traffic has proven to be wildly unpopular among customers, leading to widespread defections and condemnation throughout various Internet communities. This is particularly so on BroadBandReports.com, a site that holds considerable weight in the ISP decision making process.

Rather then being scorned and lose customers, many ISPs are choosing to cache P2P traffic. Caching works by keeping P2P traffic off a ISPs network by retaining popular query results on a server farm. For example, let’s say the BitTorrent protocol is taking up 70% of Verizon’s network. It can implement a P2P cache server that will retain the most popular of search query results, thereby lessening the amount of traffic that must transpire on their network. Instead of downloading a popular song or movie from a customer on AT&T’s network, the information will download from Verizon’s cache server.

This concept appears to be picking up steam, as several large ISPs are experimenting with the idea. NTL, a British broadband firm, has partnered with CacheLogic and BitTorrent in a bid to alleviate their bandwidth consumption.

Thailand’s True Internet, the country’s largest ISP, is also claiming success with PeerApp. PeerApp provides a technology very similar in nature to CacheLogic, where P2P traffic is routed to server farms rather than throughout the network. This has been an apparent success, as PeerApp claims that 60% of the ISPs traffic has been reduced.

“In addition to controlling its bandwidth costs, True is now able to manage peak and seasonal P2P traffic, and prepare for future P2P traffic growth…Return on investment is realized within a matter of months”, says Robert Mayer, CEO of PeerApp.

Although the release is a “look at me” type publication, it demonstrates the growing emphasis ISPs are placing on caching rather than blocking. It’s a significant step forward for True Internet, which services a country of over 60 million people.