Peer-to-peer (P2P) file sharing accounts for a very significant part of the Internet's traffic, translating into significant peering costs for ISPs. It has been noticed that, just like WWW traffic, P2P file sharing traffic shows locality properties, which are not exploited by current P2P file sharing protocols. We propose a novel peer selection algorithm, adaptive search radius (ASR), whose primary goal is to reduce ISPs' peering costs, where peers exploit locality by only downloading from those other peers which are nearest (in network hops). Simulation studies, using the eMule protocol, show that ASR benefits both ISPs, by globally reducing P2P file sharing traffic, and users, who experience faster downloads.