InternetNZ to look at economics of 'peering'

By PAUL BRISLEN

The Internet Society, InternetNZ, will produce an issues paper on the economic side of the peering debate to help the country's internet providers better understand the problem.

Peering is the technical term for connections between internet service providers who exchange data traffic between networks without charging each other.

TelstraClear has said it will not connect to the country's two peering exchanges from November onwards and will build one-on-one commercial relationships with internet providers instead.

The internet providers are up in arms over the move which they say will increase costs for all concerned and introduce unwanted complexity to the delivery of internet access.

TelstraClear has argued that internet providers have been beneficiaries of a free ride on its national network and the time has come to address the issue. Telecom is also considering its position on peering and has already disconnected one server from the Wellington peering exchange.

InternetNZ executive director Peter Macaulay said the society was willing to fund the paper because of the issue's importance.

"We all understand the technical issues but the economic models are less well understood. We want to work with all parties to create a model that shows where the money moves and we hope that will help the industry" resolve the matter.

Macaulay said the society hoped to show the two main network providers, Telecom and TelstraClear, that it was economically more efficient to peer with the internet providers than to try to charge for connection.

"The provider pays to host the data, the customer pays to receive it so we want to find out what the issue really is for the providers."