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

Good thing

[Anonymous Coward]

Anything that goes to help out the smaller guys is a good thing. After all, the big guys gobble the little ones up, and then give crappy service for an ever increasing price.

Perhaps this will let these beloved little IPSs survive just a little bit longer.

Anything to keep the internet how it should be is a good idea, and it is nice to see the Aussie gov't protecting capitolism by leveling the playing field. After all, more compeition = better experience for every consumer.

Re:Good thing

[arvindn]

I agree. And another thing: an internet with more number of smaller players is more stable than one with fewer, larger players. Remember the speculations when worldcom went down? Ideally there shouldn't be any such thing as backbones. While we can't say that of today's internet, its certainly better now than in the past.

Old issue! Remember Africa?

[npendleton]

Remember the slashdot story on African ISPs having to foot the connection bill? The fundamental problem is that peripheral networks foot the bill to connect to larger networks, which foot the bill to connect to themselves (via backbones) and which connect to yet larger networks.

So why should governments regulate this? What kind of abuse is going on? If the edge players did not buy the connection, they would die.

Large players (e.g. AOL and MCI) are the ones vulnerable to bankruptcy for spending too heavily on infrastructure, that is quickly out of date.

Mac Refugee, paper MCSE, linux wanna be

Re:Old issue! Remember Africa?

[thogard]

Last year you could buy a 155mb link from Calif to Sydney for about AU$60,000/mo (US$25k). Since there are now several other compaines that have upgraded their lines, the costs have gone down.

However years ago, Telstra (the phone compnay) set the rate for 64k ISND link to be about AU$.20/megabyte. When they did that, the rate to get a US carrier to call Australia and ship a 64k stream over was about the same. Also for that 64 K channel, you get to pay about au$300/mo if you transfer 0 bytes. The result of their high prices is that no one else would need cut their prices so the "discount" services are now charging amounts about the same. Now that Telstra has cut prices, the discount services are typically more expensive than going with the monoploy.

Today the prices are dropping. The Kiwis (who share the link to the US) now can get 2 mb shared unlimited services for a only about NZ$500/mo (us$200ish).

What happened to BGP?

[umofomia]

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.

Umm... this was the way BGP (Border Gateway Protocol: the protocol that basically routes the entire Internet, more info here) was designed to work. It's what gives ISPs incentive to cooperate yet still compete with one another. I don't see how the Australian government can do anything to change this since under BGP, there is no incentive to charge depending on which way information is flowing.

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.

Also, if you think about it, if A charges B for anything going from B to A and B charges A for anything going from A to B, you end up cancelling much of the money they make from one another. Granted, the larger ISP will most likely come out ahead, but it still needs to pay its bills. So it raise prices anyway in order to recoup the money that was cancelled out. In effect, the amount that the larger ISP charges will be unchanged, but there is extra work involved in keeping track of all this information. To make an analogy, does it make sense for you to charge your ISP for packets that go one way and not the other? No, you're paying them for the connection that they provide.

Finally, how do we determine in what situations do charges apply? If an e-mail goes from A to B, it seems logical that A should pay. But if B makes a request for a web page and the web page is transferred from A to B, should A still pay? If we make different payment rules for different protocols, this will become a mess.

In summary, I don't see how this regulation will effect anything except to make everyones lives harder.

Build a exchange point

[Openadvocate]

Kids, when I got on the internet here in Denmark, there was no world wide web. You paid for an expensive account on a unix box you could dial into. You could then access Gopher, Veronica, etc. Not that it made it less interesting, because the noise-floor on the "sigal" was very low

Anyway, there were only one place to get connected in the beginning, then came providers and the problem that our local(inside the country) traffic, got routed half across Europe only to end up on the other side of the street. Then in 1994 came the DIX, Danish Internet eXchange point. Horray. So all a provider has to do, is to get a connection to the DIX and they can make peering agreements with other providers to route to each other networks via the DIX.
Now if you visit their site, you can see the prices clearly stated on the page(divide by 7 to get $(damn is going down)).

I(of course) can't see how the entire network in Australia is built, but I'd say a Exchange point would be good. I can't imagine forcing someone to pay for traffic the way the article mentions here, can be good.
But if you set up a exchange point in a major city where everybody is represented, and the cost to get connected to it, is the cable and a small fee to keep it running. Even smaller ISP's can join.
But then again I can't get the complete picture by just reading one article.

Re:Build a exchange point

[Bishop]

The first problem is that Australia is much much bigger then Denmark. The second (and bigger) problem is that for two smaller ISPs to peer they usually must buy a link from the monopoly Telstra at a cost where basically the two smaller companies would pay for every bit twice.

We are starting to see some exchange points similar to DIX in Canada. Finally. We used to have similar problems to you where traffic going to your next door neighbour could travel a thousand kms, across timezones, and through the US.

I'm from the government and I am here to help

[MerlynEmrys67]

Can someone show me a single example of the government regulating a service and the cost going DOWN. I know quite a few that the government has STOPPED regulating and the cost has gone down (see airlines, power - except for california's Dumbassed approach, banking, phones) contrast that with my cable service that seems to have a rate increase 3-4 times a year, or local phone service

Oh well

Re:I'm from the government and I am here to help

[Xtifr]

Actually, phones and banks are both examples of cases where government regulation worked. Maybe you don't remember the days when you had to pay a license fee for each phone extension in your house, and when long-distance calls cost an arm and a leg, but I sure do. The government came in and broke up AT&T, and, after some initial confusion (partly caused because they nearly waited too long), prices went down. Then, after competition was established in the phone market, the gummit pulled back some of the regulations, exactly as they should have done, and prices went down again. Astonishingly (at least to anti-gummit conspiracy theorists), the gummit did the right thing in both cases, and the whole thing worked pretty damn well.

As for banks, I'm too young to remember 1929, but I know the lessons of 1929, and the only reason I'm willing to keep any of my money in banks these days is that the banks are still heavily regulated!

What about the medical profession? Do you think it's a bad thing that anyone who wants can no longer hang up a shingle, claim to be a doctor, and dispense alcohol- and cocaine-laced syrups as all-purpose nostrums? Oh, sure, you could probably save money, but at what cost? What about the automobile industry? Do you think it's bad that we no longer have cars that explode at a tap? I could go on and on.

The fact is that the so-called "free market" of classical economics works by positive feedback. Anyone who's studied any basic engineering should be able to point out the flaw in such a scheme, but somehow, the lassez-faire crowd are able to ignore a few divide-by-zero cases (monopolies and cartels, where the competition is zero) in their calculations.

Do I think overregulation is bad? Yes, it's like an overengineered solution, it's too expensive. Do I think underregulation is bad? Yes, it's like an underengineered solution, fragile, and likely to break apart in a heavy wind. Do I think the proper balance is difficult to find? Yes. Do I think that means we should give up and dump all government regulations? What kind of idiot are you?

Re:booo

[CrosbieSmith]

Why is market regulation a necessity? Your analogy with policing is a false one. The best reason for policing is to stop people from interfering with my life, e.g., through theft and murder, whereas market regulation interferes with my life. Not only are these things different, they're opposed. One increases my freedom to live my life unhindered and the other actually decreases it.

deregulate and cost goes up

[wadiwood]

Just ask anyone with a deregulated, privatised electricity supply. Adelaide Australia (electricity up by more than 30% for Christmas), and California.

And I don't think deregulating our airlines (Australia) helped either. They're either about to drop out the sky like they do in the USA or we're only going to have Qantas and only football teams are going to be able to afford to fly, because the airline sponsors the competition. The internet tickets may be cheaper but the I have to fly now/tomorrow tickets, which used to be the cheapest are now more expensive than ever before.

And banking, how that has gone to shit in Australia. The banks are making huge profits, laying off lots of staff and slugging the hell out of their customers with less than multimillion turnovers. The only way to get your money out of them is to become a director or exec and then quit. Sigh. Even the shareholders are getting a raw deal out of this highway robbery.
Bring back regulation, I say!

My understanding with Australian internet traffic is that there are already different rates/costs and limits for upload traffic than for download traffic, especially if you have a "permanent" connection. (anyone else get dropouts on their adsl?)

Also when I was in NZ they had a different rate for traffic downloaded from outside the country ie USA or Australia to traffic racked up within the country.

I think some web site hosting cost more if lots of people download (upload from your server)your site too. That's why you see some sites with pleading messages not to directly link to their url, ie they'd prefer you copied their picture to your site and let your website incur the cost of people sucking onto their computers.

actually I'm having a hard time thinking of anything where regulation has made the cost go up, as much as deregulation or privatisation has. Even our bus tickets are more expensive. And don't get me started on the UK Rail system. Yikes.

cost of living up, take home pay down.

A big fat maybe...

[Goonie]

It does mean that politicians are less able to skew their policies towards those more likely to vote, which is a good thing IMHO.

As to pork barrelling, that still occurs, but pork is aimed differently to that in the US. Our arliamentary system, particularly when you throw in proportional representation in the Senate and IRV in the lower house, are quite different to the US's presidential system, and trying to explain the different dynamics to people who've never had exposure to it is kind of complex.

Re:ghuh?

[Rip!ey]

No. You are the one with the mis-conception.

I can, if I choose, place all voting slips in the bin provided on the way out. I don't have to fill them out. I don't have to put them in the boxes provided. There is no electoral offence that I can be charged with if I choose to do this. It is counted as a vote.

And yes, I have done this. I even smiled at the scrutineers and electoral officials as I did so. They can't do anything about it and they know it. I don't hide behind an informal donkey vote (forms submitted but not valid) by virtue of guaranteed confidentiality. I do it in an obvious manner, in plain view of multiple witnesses. And they can't touch me.

Please, take your attitude and **** off. If I am ever in the position again where I look at the candidates and find myself choosing the lesser of two evils, I will do the same again. No political party shall ever be given a 'mandate' by me because they were simply the best of the worst.