What is Peer 2 Peer blocking in Cisco WLC?

--> Peer 2 Peer blocking is a feature that blocks direct communication between wireless clients that present on the WLAN on the same Wireless LAN Controller.

--> Peer-to-peer blocking does not block multicast traffic, it only blocks unicast traffic.

--> Peer-to-peer blocking is applied to individual WLANs, and each client gets the peer-to-peer blocking setting of the WLAN to which it is associated.

-->  Peer-to-Peer enables you to have more control over how traffic is directed.

--> For example, you can choose to have traffic bridged locally within the controller, dropped by the controller, or forwarded to the upstream VLAN.

--> With Peer-to-Peer we have three options,

i) Disable 

--> Disables peer-to-peer blocking and forwards traffic locally within the controller whenever possible.

--> This is the default value on Cisco WLC.

--> Traffic is never bridged across VLANs in the controller.

ii) Drop

--> Causes the controller to discard the packets within the same VLAN.

--> Does not drop the traffic between the clients of two different VLAN's.

iii) Forward-UpStream

--> Causes the packets to be forwarded on the upstream VLAN.

--> The device above the controller decides what action to take regarding the packets.

--> The device can be Router or Layer 3 Switch.

Ref: Cisco.com