RealTime IT News

APEC Moves on Data Deficit

The Australian Government has endorsed a set of principles on international Internet charging arrangements which aim to break down the "de facto monopoly" on the cost of data traffic between the US and Asia Pacific Economic Countries (APEC).

The principles, reached at the fourth meeting of telecommunications ministers in Mexico, maintain that international Internet charges should reflect the contribution by each country to communication activity on a user pays basis.

The principles advocate that Internet charging arrangements between network service providers should be commercially negotiable and determined through use by each party of the interconnected network resources and the end to end costs of international transport link capacity.

"While the principles make it clear that government need not intervene in private business arrangement on international Internet charging, they state that where there are dominant players or de facto monopolies, government must play a role in promoting competition," the Minister for Communications, Information Technology and the Arts, Senator Richard Alston.

Currently, the cost of Internet access sourced from the US has effectively been paid for by other countries, including Australia.

"It is estimated that the annual opportunity cost of the existing arrangement for Australia runs into the hundreds of millions of dollars," he said. "While per-megabit international Internet charges are falling rapidly, the current charging arrangements have meant that Australian Internet users pay more for Internet access than they would under a more competitive regime."

Senator Alston said that the current 30 per cent of traffic between the US and Australia which emanated from the States should be reflected in commercial cost-sharing agreements.

"Affordable Internet access prices are critical to the widespread uptake of electronic commerce by business and the wider community, and this decision provides the opportunity to lower Australia's already internationally competitive Internet access rates," said Senator Alston.

Despite the agreement, national ISP peering cooperative Ausbone has warned that the oligopoly which exists in the Australian Internet industry may prevent the price reductions from being passed on to smaller ISPs, and in turn to Internet users.

Ausbone chief executive officer Paul Montgomery said that in the past, smaller ISPs have had to rely on government regulators like the Australia Competition and Consumer Commission (ACCC) to gain benefits from competition in the telecommunications industry.

The majority of wholesale data access is dictated by four carriers: Telstra, Optus, UUNet and AAPT. Smaller ISPs have so far had to deal with these ISPs for data capacity.

"Our fear is that smaller ISPs will be left out of the exclusive inner circle of the oligopoly," said Montgomery. "This would not only be a slap in the face to the lower tiers of the industry and their customers, but it would entrench the dominance of the larger providers".