This policy setting determines if the Background Intelligent Transfer Service (BITS) Peercaching feature is enabled on a specific computer. By default, the files in a BITS job are downloaded only from the origin server specified by the job's owner.
If BITS Peercaching is enabled, BITS will cache downloaded files and make them available to other BITS peers. When transferring a download job, BITS will first request the files for the job from its peers in the same IP subnet. If none of the peers in the subnet have the requested files, BITS will download them from the origin server.
If you enable this policy setting, BITS will download files from peers, cache the files, and respond to content requests from peers. Using the "Do not allow the computer to act as a BITS Peercaching server" and "Do not allow the computer to act as a BITS Peercaching client" policy settings, it is possible to control BITS Peercaching functionality at a more detailed level. However, it should be noted that the "Allow BITS Peercaching" policy setting must be enabled for the other two policy settings to have any effect.
If you disable or do not configure this policy setting, the BITS Peercaching feature will be disabled, and BITS will download files directly from the origin server.