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While the IP unicast service has proven successful, extending end-to-end adaptation to multicast has been a difficult problem. Unlike the unicast case, multicast protocols must support large and heterogeneous receiver sets. While proposed approaches to scaling multicast transports attempt to localize problems and/or organize receivers into a hierarchy through a divide-and-conquer approach, this approach succeeds only if the resulting hierarchy is congruent with the underlying routing tree topology. This implies the need for some level of topological information at the end systems which the IP multicast service deliberately hides. In this paper we present a group formation protocol (GFP) whereby receivers dynamically organize themselves into a multilevel hierarchy of multicast groups that corresponds to the underlying routing tree. GFP can serve as a core component across a wide range of multicast applications and protocols such as local recovery for reliable multicast, self organized transcoding, self-organizing web caches, the optimal and dynamic placement of proxies, repeaters, designated receivers, recorders and so forth.