How to limit accessibility to users.

Hi all, I have an employee who keep giggling, as I am suspecting him either downloading movies or actually playing movies on his cd-rom. I am taking care of the cd-rom accessibility because he doesn’t really need it. But my question is, how can I limit his accessibility to sites which he shouldn’t be perusing around in?

I know my router offers filtering and URL blocking, but I am confused as to blocking ports for him to prevent him from using P2P sharing programs and music downloading.

Thanks all!