Internode boss details NBN interconnect complaint

We’re without peer: that’s the problem

Simon Hackett, head of Adelaide-based ISP Internode and Tesla enthusiast, has called for fair and enforceable peering arrangements for Australia’s National Broadband Network.

In a discussion paper published on the company’s blog, Hackett says the lack of symmetrical peering arrangements for both voice and data traffic could become a bottleneck on the NBN.

In many countries, peering – the exchange of traffic between service provider networks – follow a “sender keeps all” model, he writes. Two ISPs creating a peer connection pay all of their own costs to achieve interconnect, and retain all the revenue from the traffic they swap.

In Australia, a historical quirk means there are only four peers at the top tier of the Internet, and of these he says only Telstra and Optus are of significant scale. These, however, control so much Internet traffic (along with access to many international links) that they distort the market and have no incentive to peer with providers outside the club, whose other two members are AAPT and Verizon Business.

(The so-called “Gang of Four” was created by a late-1990s Australian Competition and Consumer Commission decision. A later ACCC inquiry into Internet peering was abandoned due to a lack of cooperation from other ISPs – El Reg.)

Other ISPs cannot demand peering relationships with the four, but instead need to “purchase connectivity to and from their networks at commercial (transit) IP carriage rates”. To minimize costs, he says, these links tend to be under-provisioned and cope badly with peak periods.

In the voice network, he notes that current switching-based interconnect models will be rendered obsolete by the NBN, because IP-based calling will complete the retirement of today’s circuit-switched interconnect models.

Under current peering models, Hackett argues, old peering models will be bottlenecks that inhibit network performance: “a lack of sufficient peering capacity … will rapidly impede commerce and consumer utility for high bandwidth applications”, he writes.

Hackett’s paper calls for four components in a new peering regime: NBN legislation should require economically efficient sender-keeps-all peering models for both voice and data; the network operator, NBN Co, should require peering as part of its access contracts; the ACCC should intervene to open up the peering club; and peering should be part of the deal currently under negotiation between NBN Co and Telstra under which the copper network is to be closed down.

The full paper was first published in the Telecommunications Journal of Australia and is available here.

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