  As ISPs begin to cooperate to expose their network locality information as
services, e.g., P4P, solutions based on locality information provision for P2P
traffic localization will soon approach their capability limits. A natural
question is: can we do any better provided that no further locality information
improvement can be made? This paper shows how the utility of locality
information could be limited by conventional P2P data scheduling algorithms,
even as sophisticated as the local rarest first policy.
  Network coding's simplified data scheduling makes it competent for improving
P2P application's throughput. Instead of only using locality information in the
topology construction, this paper proposes the locality-aware network coding
(LANC) that uses locality information in both the topology construction and
downloading decision, and demonstrates its exceptional ability for P2P traffic
localization. The randomization introduced by network coding enhances the
chance for a peer to find innovative blocks in its neighborhood. Aided by
proper locality-awareness, the probability for a peer to get innovative blocks
from its proximity will increase as well, resulting in more efficient use of
network resources. Extensive simulation results show that LANC can
significantly reduce P2P traffic redundancy without sacrificing
application-level performance. Aided by the same locality knowledge, the
traffic redundancies of LANC in most cases are less than 50\% of the current
best approach that does not use network coding.
