Comcast-BitTorrent: The Net's finally growing up

(Fortune) -- Something remarkable happened on Thursday - an Internet service provider and a peer-to-peer software company announced a collaboration and agreed to work together.

Such companies have been all but at war for the past few years. This détente almost certainly portends broader cross-industry collaboration to insure that the Internet can become what it was not originally designed to be - a way to distribute and consume media. Internet experts are impressed.

Comcast (CMCSA) - the nation's biggest broadband provider - made a joint announcement with BitTorrent - the peer-to-peer software and services company whose tools have notoriously been used to download illegal music and TV shows. Comcast was outed last year by Internet activists and by the Associated Press, which documented that it was interfering with certain sorts of traffic on its network, notably BitTorrent file uploads, which consume a large amount of bandwidth.

Thursday the two companies said they were now working together to insure that Comcast's legitimate efforts to manage its network did not unfairly single out any applications. Comcast promised by the end of 2008 to only restrict bandwidth for individual users, and then only at peak usage periods when not to do so would cause service disruptions for others.

BitTorrent, for its part, said it was revamping its software to improve efficiency, and that it would work with Comcast to make the software and network function better together. BitTorrent currently aims to make money by serving as a legitimate distribution tool for media companies, even as its software continues to be used widely for illegal distribution.

The two companies also said they would work with other ISPs and technology companies to broaden the partnership to make the entire Net more efficient.

Said Jonathan Zittrain, professor of Internet regulation and governance at Oxford University: "It sounds like progress. If you can cook up something that allows you to allocate the burden of congestion fairly among users as it happens, that's the way to go. I can imagine someone saying instead you should please broaden the highway. But Comcast says they're going to do that, too."

The giant cable and Internet access company announced that in conjunction with the changes it will be continuing an "aggressive deployment" of new technology to give its customers even faster Internet access. Another expert I spoke to was Kevin Werbach, professor of legal studies at the Wharton School. "Whatever one thinks about the unauthorized file sharing the goes on on networks," he said, "peer-to-peer is clearly here to stay. Network operators have to stop fighting the technology. Comcast seems to understand that they screwed up. They're taking a fairly enlightened view."

Kevin Martin, chairman of the FCC, who has been threatening Comcast with penalties over the BitTorrent restrictions, was less charitable. While he said in a statement that he was "pleased that Comcast has reversed course" he also said it is not reasonable to "arbitrarily block certain applications." And he further complained about the pace of Comcast's announced change.

Tony Werner, Comcast's chief technology officer, said that Martin has got it wrong. "The only thing that we did," he said, "was that during times of peak network congestion we limited peer to peer protocols. There was never any blocking." As for the timing of the transition, he says "we're not ending it today at 5:00 because we can't transition that quickly."

Comcast must still overcome skepticism among other Internet activists. Says John Palfrey, executive director of the Berkman Center for Internet & Society at Harvard: "It was helpful for the sword of Damocles, in the form of the FCC, to be hanging over the whole affair. But I'm cautious because there has been optimism about what Comcast would do relative to network management and disappointment about what they've actually done. This is a chance for them to make good on a lot of their pronouncements."

As more and more legitimate content moves to peer-to-peer distribution, ISPs face growing pressure - from, for example, TV networks - to find a way to make it work.

BitTorrent is not the only company that has been talking with Comcast. Pando Networks has a meeting with Comcast next week. Pando CEO Robert Levitan says his company has created software which in tests with Verizon (VZ, Fortune 500) and Telefonica has shown significantly improved delivery speeds for customers even as it reduces the necessary bandwidth.

Pando, through a body it helped form called P4P, plans to make that software available to any peer-to-peer provider or ISP. Comcast and BitTorrent are taking similar steps. They say they will make any innovations freely available.

"We're committed as we go forward to being as transparent as we can," says Comcast's Werner. "There's nothing we want to do that would be proprietary or closed."

Palfrey, Martin and others will be watching closely. But it looks like Thursday was a good day for ordinary Internet users.