Peering criteria increase transparency in the internet interconnection market

23 October 2018

The ACCC says recent developments in the wholesale market for internet interconnection services will boost competition in the supply of internet connectivity and hosted services to corporate and government customers and lead to a better online experience for end-users.

Optus, Telstra, and TPG have recently published the criteria on which they will consider peering with other internet service providers (ISPs), detailing the requirements other providers need to achieve in order to directly interconnect with them on a settlement free basis.

Telstra has already entered into such a peering relationship with Vocus.

“We welcome the recent agreement between Telstra and Vocus to enter into a peering arrangement,” ACCC Chair Rod Sims said.

“Gaining peering with other networks enables carriers to provide more competitive wholesale ‘transit’ services to other ISPs, which should have positive impacts in downstream markets including the corporate internet market.”

“It is important that the big ISPs in particular publicise and apply their criteria in good faith so that other providers have a transparent pathway to peering status as they attain additional scale with the rollout of the NBN and other next generation fixed and mobile networks,” Mr Sims said.

The ACCC has also issued an update on its assessment of whether access to internet interconnection services is available on competitive terms at ACCC assessment of internet interconnection arrangements.

 

Background

Peering arrangements are agreements between ISPs to physically connect to other networks in order to exchange internet traffic, often without payment being exchanged.

Optus, Telstra, and TPG have long-established peering relationships with each other (and Verizon). To date, other ISPs have had limited visibility over the criteria these large providers apply in determining whether or not to enter into a peering agreement.

Peering criteria identify the requisite attributes of a prospective peering partner including geographic network reach, location of exchange points, minimum capacity requirements and symmetry and volume of traffic exchanged. These metrics are used to determine whether both parties would receive roughly equal value from entering into a peering arrangement.

Optus, Telstra and TPG also offer paid internet interconnection services known as ‘transit’ to other providers that enable them to gain full connectivity to the wider internet.

The ACCC considered internet interconnection arrangements as part of its communications market sector study which concluded in April 2018. The ACCC raised concerns in the final report of the market study that the static peering arrangements in Australia appeared to be resulting in weak competitive incentives in relation to the supply of internet interconnection to smaller internet service providers.

 

Release number: 
214/18
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