Australia Investigates Peering Practices

Anonymous Sniper writes "The Australian Competition and Consumer Commission today announced that it will hold a public inquiry into whether an Internet interconnection [peering] service should be regulated. This would mean the big National ISPs would have to pay smaller ISPs for traffic originating within their networks, which means everyone's routing tables would become more efficient, and cheaper for the smaller ISPs. This would also set a significant international precedent. Horray for the ACCC and Allan Fels - the same people who made Region-Free DVD players legal here."

Comments

I didnt get this

[RTPMatt]

I know i didnt get this, so i think this is the important info:
"There are some apparent curiosities with current interconnection arrangements. If I am connected to a smaller ISP and I send an email to my friend at one of the four larger ISPs, the larger ISP will generally charge my smaller ISP for sending the email. However, when my friend at the larger ISP sends me a return email, my smaller ISP will have to pay the larger ISP once again".
ya, that dosnt sound real fair

Re:Uhhh... one thing you're forgetting

[cperciva]

You don't GET PAID driving down a toll road one way, do you? :-)

No, but you usually don't have to pay to get off the road either. The complaint here is that each packet is charged twice -- once to the ingress network, and once to the egress network.

Re:ghuh?

[Sad Loser]

Australia is notoriously regulation happy (yesterday sent off $100 fine for NOT voting in the election - that's how regulated we are.)

However we have a champion of the poor dispossessed geek in Allan Fels. The ACCC is the counterbalance to the Australian authoritarianism and big business, and actually works quite well, as it has teeth and a fearless leader.

All credit to the ACCC for taking on a difficult and messy problem.

Re:What happened to BGP?

[newt]

BGP already provides some of these benefits for smaller ISPs by allowing peering relationships. Let's say there is a parent ISP A, with smaller ISPs B and C in a transit relationship to A (in other words, they pay A). If B wants to send to C, it normally has to go through A, and both B and C end up paying for it. If there is significant traffic between B and C, they may decide to set up a peering relationship, sending packets directly between one another and bypassing A. Many peering relationships are set up such that B and C don't pay each other anything, since they both end up saving money by bypassing A.

The situation in Australia is that A is "Telstra", and B and C are "everyone else".

Telstra also owns 100% of the installed base of copper lines in Australia, and about 90% of the installed base of fibre optic capacity, so if B and C decide that they want to talk to each other directly they almost always have to lease carrier services from Telstra... which has set the tarrifs so that the cost of directly linking is very similar to the cost of sending transit through Telstra in the first place.

The monopoly sitation with respect to installed telecommunications infrastructure distorts the way the peering arrangements you have described occur. The Australian situation is similar to what you would have had in the US if AT&T were never broken up.

For long-haul and metropolitan peering, US ISPs can obtain competitive bids from any of a number of CLECs and national carriers, or they can dig-up the sidewalks and install their own fibre. In Australia, digging up the sidewalk for laying cable is illegal without a Government-sanctioned carrier license, and there is very little in the way of competitive telecommunications infrastructure, so Telstra effectively becomes the sole provider.

The situation is slowly changing, but it's a very fragile ecosystem at the moment. Almost all of the Telstra competitors are either in the infancy or in bankruptcy... so if you were a major ISP, would you think that peering was an economically viable long-term option?

Finally, Telstra themselves never peer with anyone -- As far as they're concerned, every single other ISP in Australia, including the likes of Worldcom, falls into the "customer" category. Oh, hang on, there is one exception: about five years ago, the ACCC forced Telstra into peering arrangements with OzEmail and Optus (the number-2 and number-3 ISPs at the time). The terms of those arrangements remain a commercial secret, and no further peering arrangements have ever been entered by Telstra.

- mark