No need to regulate ISP peering arrangements, ACCC says

The Australian Competition and Consumer Commission (ACCC) has welcomed moves by Telstra, Optus and TPG — which along with Verizon are sometimes dubbed the ‘gang of four’ — to publish the criteria which they use to assess requests by other ISPs to enter peering arrangements.

The ACCC’s communications market sector study, published in April, said that the commission would “continue to assess and report on whether access to internet interconnection services is available on competitive terms to support effective competition in the downstream markets, with a particular focus on the market for the supply of services to corporate customers”.

It also said that Telstra, TPG, Optus and Verizon (TTOV) “should maintain on their website a comprehensive set of criteria and any other relevant policies to which they have regard when assessing peering requests from other networks. This would provide prospective peering parties some guidance on the criteria they are required to meet with each of the TTOV networks.”

“Due to the size and number of end users on TTOV, smaller broadband service providers seek to interconnect directly with at least one of TTOV to supply retail broadband services (which they may also do via an aggregator such as Vocus,” the report noted.

“Direct interconnection with one of TTOV provides access to all four of TTOV networks through their peering relationships. This arrangement reflects international practice for internet interconnection but may give TTOV networks a cost advantage over smaller service providers. It may also allow these larger networks to set price and non-price terms to their advantage.”

In a statement released today, the ACCC said that in the future it expects large ISPs that “enter into bilateral peering arrangements with each other to also publish their peering criteria”.

“It is important that ISPs set their peering criteria in good faith, provide as much public transparency as possible and evaluate any prospective peering party’s conformance with their criteria in a reasonable, non-discriminatory and non-exclusionary manner,” the ACCC said.

Telstra has recently entered into a peering agreement with Vocus, the competition watchdog 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,” said ACCC chair Rod Sims.

“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 said it had not identified “any clear evidence of anticompetitive conduct by Optus, Telstra or TPG in the supply of internet interconnection services” and as a result does not consider it appropriate to launch an inquiry into potentially regulating Internet interconnections services.

(“Verizon’s participation in the peering arrangements has recently diminished and that Verizon no longer actively competes in the supply of transit services,” the ACCC noted.)