The technology, provided by Los Gatos, Calif., company Audible Magic, isn't yet blocking individual file trades. But that's the next step. As the company begins testing its service with more universities, corporations and small Internet service providers during next few weeks and months, this peer-to-peer monitoring and blocking technology threatens to open the next front in the online piracy wars.

With the capacity to look inside every bit of data that flows over a network--whether it's part of a song being illegally traded or a personal e-mail--this new generation of antipiracy technology is sure to prove controversial. But some administrators at universities and corporations--deluged by peer-to-peer traffic that continues to overwhelm their networks--say they're ready for this sweeping step.

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