Current Peer-to-Peer (P2P) systems were developed and

implemented as a result of a direct requirement/demand without an

overall functional architecture. This makes the performance of the

resulting systems far from optimal because other aspects of a

complete system have not received sufficient attention. Moreover,

the lack of standardization in functional architectures of P2P

systems will also restrict the interoperability amongst the systems

thereby reducing tangible benefits for Internet users. Inspired by

the TCP/IP model, this paper introduces PARM: a Physically-

Aware Reference Model for Overlay Internetworking. PARM

divides major functional P2P system tasks into components in a

layered structure to enable a more modular communications

approach so that each task can be tackled individually and

efficiently. Simulation results indicate that PARM helps to produce

better performance overlays with desirable features such as

decentralization, self-organization, and minimal delay penalty.