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Bulk-data peer-to-peer systems have been promoted as reducing the cost of content distribution. Unfortunately, this isn't generally true. Rather, bulk-data P2P shifts the costs of delivery from the content provider to the ISPs or content recipients. A very simple economic model of content delivery shows how this occurs and that, under some conditions, P2P can grossly magnify costs. Even with localization this cost increase may still occur. However, if the P2P system includes the notion of in network caches, the economics change greatly. A P2P caching infrastructure allows both content providers and ISPs to realize significant cost savings, and the benefit is maximized when the caches are free to use.
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