Online Video: Data Tidal Wave?

Software whiz Bram Cohen released BitTorrent for free on the Internet in 2002 so his hippie friends could swap concert videos. The first big success was a Grateful Dead concert.

Today, Cohen's peer-to-peer technology is so popular and powerful that it accounts at times for 50 percent of Internet data traffic, and has the potential to alter the economics of broadband Internet for companies like Comcast Corp. and millions of consumers.

"Television is going to get phased out," Cohen, 32, a formerly out-of-work computer programmer, said in a phone interview from San Francisco. The future, he said, is Internet video at home. "People get broadband because they want to get stuff. That's the whole point of broadband."

But Comcast Corp. says the Internet is a limited commodity and that BitTorrent video users hog bandwidth, many times with pirated movies, and slow speeds for others.

Some Internet video leads to congested nodes on Comcast's network, and the company has admitted to interfering with BitTorrent traffic to ease jams. It says a small number of BitTorrent users abuse the Internet. A federal government agency is investigating Comcast's actions.

Comcast and BitTorrent Inc., which have clashed publicly for months, were in negotiations to settle their disagreements late last week, sources from both sides said on condition they not be identified. An announcement could come this week, they say.

The Comcast-BitTorrent dispute is an early indicator of the stresses and opportunities of online video, a rapidly growing market. Cable companies are considering how to bill for it, the government is trying to figure out whether it should be regulated, companies are developing new technologies for it, and network operators are adding equipment to handle it.

Time Warner Cable, the nation's second-largest cable company, will experiment this year with consumption-based, or metered, pricing for broadband in Beaumont, Texas. The company notes that 5 percent of its customers use 50 percent of the bandwidth in some areas of the network. Comcast executives are watching the experiment.

Projecting the size of the video explosion has become its own industry. Technology researchers warn that many exabytes of video - an exaflood - will surge over the Internet with high-definition movie downloads, interactive phones, games, virtual online worlds, amateur video, and Internet TV.

One exabyte of data contains the text and pictures of one trillion big books that, stacked one on top of the other, would reach 13 million miles into the heavens.

Bret Swanson and George Gilder of the Discovery Institute, a nonpartisan public-policy think tank based in Seattle, project the Internet will grow by 50 times by 2015. Swanson estimated that network operators will have to spend $100 billion in the U.S. Internet by 2012 to keep pace.

After slowing earlier in the decade, Internet capacity needs are growing 80 percent to 100 percent a year, said Philippe Morin, an executive with Nortel Networks, a networks-equipment manufacturing firm. Consumers, he said, "have this want for everything HD."

Christopher S. Yoo, professor of law and communication at the University of Pennsylvania, said, "The predictions about video are quite real." Some people, Yoo said, "are afraid of how big it will be."

In Washington, the Federal Communications Commission is investigating Comcast's practices managing BitTorrent's Internet traffic.

BitTorrent and Vuze Inc., another California peer-to-peer company, say Comcast has degraded viewers' experiences by disrupting their Internet video. By doing so, Comcast boosts the customer experience for its own video products, officials at the California companies say.

Vuze general counsel Jay Monahan said Comcast's interference is "a threat to innovation and a threat to our business." Vuze uses a variation of the BitTorrent program.

Peer-to-peer computing breaks digital content into many parts and stores those parts on different computers, or peers. The software reassembles the parts during viewing. There are heavy uploads and downloads. In traditional computing, the video is mostly downloaded from one site.

Comcast says the BitTorrent traffic takes resources from other users. "Our decision to manage the network is not based on any competitive concerns we have about peer-to-peer providers," said David L. Cohen, Comcast executive vice president. He estimated that 80 percent to 90 percent of BitTorrent's traffic is for pirated intellectual property.

Other Comcast competitors - Vonage Internet phone service, movie-rental firm Netflix, NBC Universal or News Corp. - use the company's network and haven't complained about anticompetitive behavior, Cohen said.

Comcast helps peer-to-peer services by easing Internet congestion, he added. "We are choosing the most limited way to manage the network for the benefit of all consumers," Cohen said.

The FCC has scheduled a second public hearing in the investigation into the issue for April 17 at Stanford University. FCC Chairman Kevin Martin is expected to reach a decision by midyear on whether Comcast's actions were "reasonable" network management.

Doug Walker, chief executive of BitTorrent, said network operators such as Comcast should expand bandwidth on the Internet for video. He estimates that in four years there could be the equivalent of 20 million years of TV programming on the Internet that's not there now.

"This is a company making a lot of dough, and it is not keeping up on a global scale," Walker said of Comcast. "The issue is that people want rich media. It's not our company or our software filling up the Internet, it's people who want rich media and are using our software to do it."

Comcast's Cohen finds the comments "an almost laughable assertion." Comcast and cable companies have "turbocharged" the Internet with cable modems and their investments, he said.

The United States, Cohen said, has "capacity-rich broadband networks that were paid for exclusively by private funds" - unlike the Internet in many other countries that was financed by public dollars.