The present invention relates to a system and method for controlling peer-to-peer connections in a Peer-to-Peer (P2P) streaming application for individual Internet Service Provider (ISP) networks over a localized overlay. The system may include a tracker local to a first ISP network configured to select edge peers among local peers of the first ISP network. The selected edge peers have external connections to peers outside the first ISP network in order to transfer sub-streams to or from the first ISP network, and the local peers not selected as edge peers have internal connections to other local peers within the first ISP network to transfer the sub-streams over the localized overlay.