McMaster University, 2001. Ontario, Canada.
The school took a novel approach to combat this. "Rez-x" was a file sharing system that was limited to the school's subnet. It didn't prevent you from using Napster, but by providing p2p access on the local (fast!) network, people just used it instead. So, rather than blocking the main pipe, they just gave a way more appealing local option (in a time where dialup was still somewhat common).
Back in the day I remember tweaking and repackaging a Gnutella client which was preset to restricted its traffic to the university LAN.
It didn't take off though: The first-mover advantage of "that one guy who runs a Direct Connect server which you can also chat on" was too strong. (I just disagreed with the centralization.)
