So what has Delivery Optimization to do with Teredo?

Unlike technologies such as BranchCache which utilizes multicast messages with a TTL of 1 to find machines with requested data, Delivery Optimization contacts a cloud service for a list of peers. This service uses HTTPS to *.do.dsp.mp.microsoft.com (communication to this service has to be allowed outbound to the Internet even if only local sharing is enabled).

Delivery Optimization then leverages port 7680 to listen for incoming connections from peers. Port 3544 is a Teredo port that Delivery Optimization is using for NAT traversal to connect to Internet peers. So what happens if you turn it off?

Does disabling Teredo disable all Delivery Optimization options? Some network people really don’t like Teredo, and it’s a technology that can cause more issues than it fixes.

If customers don’t allow Teredo, they can allow port 7680 (TCP & UDP) and then Teredo can be disabled. Delivery Optimization always tries to use Teredo, on IPv4 too, but only when Delivery Optimization tries to connect to Internet peers. But if it’s not available it will still try 7680, but this can be blocked by NAT & Firewalls.

For LAN peers Delivery Optimization won’t try Teredo.