Peering criteria to promote interconnect competition: ACCC

The ACCC has welcomed a decision by Optus, Telstra and TPG to publish the criteria they use to consider whether to enter into an unpaid internet peering agreement with another ISP.

According to the regulator, the development is expected to eliminate the need for regulatory action into interconnection services.

Internet peering agreements involve physically connecting the networks of competing providers to exchange traffic, often without payment.

While Optus, Telstra and TPG have long-established peering relationships with each other, smaller providers have faced difficulty negotiating similar agreements with the large providers due in part to lack of clarity over the criteria they use to evaluate whether peering arrangements are reciprocal enough to be worthwhile.

The ACCC's recent telecommunications market study, which concluded in April, had raised concerns that the internet interconnection market — consisting of peering agreements and paid internet transit services — is stagnating due to a lack of healthy competition.

Although transit prices have been steadily declining, pricing inefficiencies appear to have forced some ISPs to make trade-offs between the quality and cost of interconnection, the regulator said.

The ACCC had been considering designating internet interconnection services as declared services, meaning they would need to comply with certain mandated criteria such as potential price caps.

But with the major providers now giving clarity into their peering criteria, and with Telstra and Vocus Group having already established a new peering agreement, the ACCC no longer believes there to be a case for launching an inquiry into whether a declaration is needed.

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

“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.”

Image credit: ©stock.adobe.com/au/peshkova

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