KEY POINTS:
Telecom has tabled a proposal to send internet traffic across local areas for free, opening the opportunity for improved performance.
Telecom's wholesale arm plans to create 29 "peering points" aimed at keeping local internet traffic local rather than sending it via an internet exchange in Auckland.
Internet Service Provider Association spokesman Jamie Baddeley said at present any internet data or email sent between customers outside Auckland on two different service providers would always go via Auckland.
"Connecting locally to exchange local traffic makes perfect sense and exchanging it a long way away is kind of mad," he said.
Local peering will mean internet traffic can be shared between service providers over higher bandwidths in local areas - up to a gigabit per second assuming the ISPs have networks "up to the task".
"It's possible that you could have a business customer who is connected to their preferred choice of ISP and throw data at someone at the other end of a Telecom network as hard and fast as they possibly can," Baddeley said. "From a business perspective, that's a huge productivity boost."
Baddeley said a more efficient local network and vibrant internet community could lead to export success for local content and software developers.
"If we've got a good fabric for communication we develop interesting applications. If they're interesting and worthwhile to New Zealand businesses then there is a good chance they could be of interest to the rest of the world," he said.
Paul Hayes, Telecom Wholesale's head of product management, said as well as better performance, local peering was part of a push to create a level playing field among New Zealand internet service providers.
"If local content grows a lot, it's obviously preventing a lot of traffic going over a national backbone where it doesn't need to go," said Hayes. "As an industry as a whole in New Zealand you get a better economic situation."
Hayes said Telecom will focus initially on peering internet traffic from its retail brand Xtra with other internet service providers.
"Ultimately what we're doing here is we're laying down the kind of infrastructure that allows the [internet] service providers to develop their services and we have to start somewhere," said Hayes.
"Once we've put it in place, and we've focused on Xtra because it's the largest number of users that you get access to, then we'll look at all the other products that won't necessarily benefit from day one."
The ability to form a local connection to Telecom's network at the 29 peering points would not be restricted to internet service providers, but open to any company which saw a business case for peering, said Hayes.
The 29 peering points tie in with Telecom's plans for its next generation network which will provide high speed internet and a voice over internet protocol (VoIP) phone service to replace the current phone system.
STAYING LOCAL
*Telecom plans to create 29 "peering points" aimed at keeping local internet traffic local rather than sending it via Auckland.
* Telecom says this is to help create a level playing field among New Zealand internet service providers.
