Regulator Tries to Fix Australian Peering

The government body charged with acting
against anti-competitive conduct in Australia, the Australian Competition & Consumer
, has proposed some radical solutions to the vexing problem
of peering, which has been a thorn in the side of the ISP industry for
several years.

In this context, peering refers to the practice by ISPs which connect to
each others’ networks of entering into pricing structures which recognise
the value of both networks’ content, instead of a straight seller/buyer

Instead of a small ISP paying a larger one for bandwidth, ISPs which
peer recognise that their networks are similar in size, and thus a retail
model is discarded in favour of “settlement” which takes into account
traffic which is flowing both in and out of each others’ networks.

In a discussion paper on its Web site, the Commission suggested that it “declare” peering as a listed carriage service – meaning that the federal Government agency would have to approve a standard peering settlement agreement, and would gain the power to arbitrate in disputes between ISPs.

“With increasing commercialisation, larger companies have had an incentive
to impose their own network accounting on smaller, and sometimes less
experienced, ISPs,” the ACCC said in the paper.

Other options canvassed in the paper include the ACCC using its existing
legislated power to seek injunctions against anti-competitive conduct, or
the introduction of a voluntary industry code.

“Such a code could be promulgated through the various industry associations
or through ACIF [Australian Communications Industry Forum] with ISPs who
sign the code becoming eligible for some kind of certification as code
members,” the Commission said.

“This option may be extended to have the ACA
[Australian Communications Authority] register the code.”

The issue of peering came to a head 18 months ago when the four largest
ISPs in Australia – Telstra, Cable & Wireless Optus, AAPT (then and Uunet (then OzEmail) – were forced by the ACCC to enter
into peering agreements with each other.

However, the benefits to the 800
other ISPs in Australia which the ACCC said at the time it hoped would
“trickle down”, were not passed on.

The ACCC is taking submissions on the suggestions in the paper.

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