Home or away, the fees are the same

By JUHA SAARINEN

Internet customers paying for overseas traffic may be receiving the data from local links - but are still charged international data rates.

The data may also count towards their international data traffic caps, even though it is local.

Internet providers say this is a common practice.

TelstraClear spokeswoman Ady Schwartfeger says the company "charges at international rates for cacheing, which is in line with charges by other New Zealand ISPs".

Not Telecom Xtra, says its head of internet and online marketing, Chris Thompson.

Its only product with separate accounting for international/national data is the Jetstream Starter DSL service, says Thompson, but the billing system counts cached international data as local.

The technical rationale for cacheing data from distant servers is sound - delivering content directly from local servers greatly improves performance for customers.

For providers, cacheing reduces load on expensive international circuits and saves them money.

Cacheing is usually "transparent" for internet customers. Web traffic is intercepted by a proxy server that checks if it has the content requested.

If it does, the proxy server delivers the content rather than passing the request on to the remote network.

Some content, such as Windows Update, is available only from local caches such as Akamai systems.

So is it fair to charge international data rates for what is essentially local traffic?

The network manager at a medium-sized internet provider who wished remain anonymous says it is. "If we took our caches out," he says, "we would have to increase our international pricing by 43 per cent to cover the additional cost of bandwidth."

As well, service to customers would deteriorate greatly.

The network manager says New Zealand is one of the few countries with domestic and international data accounting. "

Sending overseas data directly to users is not practical, says the director of a smaller ISP who also wished to be unnamed.

He said that "without cacheing, even 128Kbit Jetstart accounts would cost $200 a month".

Network operator Simon Lyall says that "transparent proxying of content is a pain", and providers wouldn't do it "if it didn't save them heaps of bandwidth and money".


The Consumer Institute's chief executive, David Russell, says the legitimacy of charging international rates for local data depends on what representations are made to customers.

"If customers have been told the data comes from abroad and are charged accordingly when it arrives from local caches, there could be an issue under the Fair Trading Act," Russell says.

But if customers were paying a general fee to get data, then there was no case under the act.