View Full Version : Data Peering

01-06-2004, 09:00 PM
Does this mean that dial up and broadband access will now get a lot dearer.
This could mean a big slow down in internet takeup.

Juha Sarrinen: Paying the price of peer pressure

01.06.2004 - COMMENT
How would you like an internet where your neighbour can watch webcasts of the latest Peter Jackson film premiere in Wellington, but you can't?

Let's imagine that you come up with a Kiwi version of online auction site Ebay. It is a big success but you have to pay your customers' internet provider for them to get to it.

This is already happening in New Zealand thanks to Telecom and TelstraClear using "peering" as a business weapon.

In simple terms, peering means network operators agree to exchange data instead of swapping cheques for bandwidth charges.

Peering usually takes place in well-connected exchanges (there are two in New Zealand: the Auckland Peering Exchange and the Wellington Internet Exchange) and is a cheap and effective way to boost the performance of the internet.

As Citylink's Neil de Wit says, it's the internet equivalent of creating a big local-call area for New Zealand instead of making everyone dial long-distance.

So effective is peering that the Indian Government is building four internet exchanges and plans to connect all providers in the country to them.

In New Zealand, peering is entirely voluntary, which has worked well - until now.

Take this example. Last December, Citylink set up a webcast of The Return of the King premiere. New Zealanders with broadband connections could see Jackson and the Rings gang on their computer screens, live from Wellington.

But Xtra customers could not see the webcast because Telecom didn't peer with Citylink for it.

Likewise, popular online auction site Trademe found out the hard way just last month how important peering is.

That's when Xtra, without warning, stopped peering at the Wellington Internet Exchange. Trademe's bandwidth charges tripled as data went via Auckland instead and its 200,000 subscribers with Xtra accounts were served either slowly or not at all during the site's peak hours.

TelstraClear officially put paid to peering last week, telling customers that it will no longer peer with them for domestic traffic from November 1. That's rich, because Clear was a driving force behind New Zealand peering before Telstra's acquisition.

So why do TelstraClear's bean-counters want to tear down the network connections to the peering exchanges? Because it can make more money by de-peering, even if it means degraded performance and increased costs for internet users.

If it had simply been a matter of paying for peering, most providers could have worn it. But TelstraClear is quitting the peering exchanges completely.

Instead, future peering arrangements will have to be set up elsewhere, with providers buying expensive circuits to TelstraClear's network, plus paying traffic charges. Providers who buy international bandwidth from TelstraClear have to pay for national as well if they want to send data to the telco's customers. That's the business case in a nutshell, and the reason TelstraClear doesn't want to peer.

Playing peering games is safe, because it's quite hard for customers at the end of networks to see what's going on with their traffic. Users are more likely to assume the problem is with the site they are trying to get to, and not the network connection. Guess whose help desk gets the complaints?

Some of the arguments against peering centre on "content generators" such as Trademe, Nzoom and Herald Online that send a lot of traffic, but don't receive anywhere near as much.

TelstraClear argues that this is equivalent to giving providers free access to its network and that it has to spend money on expanding capacity to accommodate the increasing incoming data.

Fair enough, it seems, except that it's TelstraClear customers who request the data in the first place.

And TelstraClear already charges them for traffic, make no mistake about that.

The content generators also pay their network operators, so there is no free ride for anyone here.

Will Telecom, never an enthusiastic peer, follow TelstraClear's example? Tim Lusk, general manager of wholesale services, declined to give a simple yes or no answer to that question, but spoke of "a series of ad-hoc arrangements for the exchange of IP traffic" in New Zealand.

He said they were "proving inadequate", without explaining why. Any changes would be implemented early next year, after discussions with customers and a look at international practice, Lusk said.

The Trademe incident and Lusk's comments point to Telecom following TelstraClear's example, and ditching peering at some point.

If that happens, the New Zealand-wide "local calling area" will be gone and it will be the norm for national data charges to be passed on to users. The fast and affordable national connectivity we're used to will be gone, so forget about stuff such as internet radio and free resources.

Trademe is already considering moving overseas to avoid paying the "telco tax" and other content providers will follow it, unless they can strike a deal to get access to TelstraClear and Telecom customers.

What can smaller providers do? Regulation is likely to be a failure. Across the Tasman, the Australian Competition and Consumer Commission had a go at regulating peering in 1998, but succeeded only in creating a monopoly after it allowed the gang of four - Telstra, Optus, AAPT and OzEmail - to exchange data with one another, but exclude everyone else.

The commission is revisiting the issue this year, and may take a more heavyhanded approach in regulating peering.

Not content with waiting for the commission, however, smaller internet providers in Australia have banded together and built independent peering exchanges. These now carry more than half of the country's internet traffic, without any involvement from the big four.

New Zealand providers may well want to take a leaf out of the Aussies' book and start similar work now to avoid being held to ransom by the twin-telcos. After November it will be too late.

* juha@saarinen.org

©Copyright 2004, NZ Herald

Will Providers Provide Equally?

By Jonathan Krim

Thursday, May 27, 2004; Page E01

Among the many things the Internet does with incredible efficiency is breed conspiracy theories.

So as the great network has evolved, concerns about whether the companies that control the Internet's pipes might one day discriminate among what Web sites you could see, or whose movies you could download, have often been dismissed as silly, impossible or both.

The response from network owners, particularly the cable-television companies that provide increasing percentages of high-speed Internet connections, has always been: "Is there evidence that we've ever done this?"

For the most part, no. But the concept of "network neutrality" has not just been a worry of the usual lineup of consumer groups and liberal Internet think tanks.

Large tech companies such as Amazon.com, Yahoo Inc. and Microsoft Corp. raised the alarm last year, asking the Federal Communications Commission to consider establishing principles that would help ensure that the Internet grows up as a place that allows basic consumer choice.

Their view is that the Internet is such a vital component of life that it should resemble, in a small but crucial way, the electrical grid. One can imagine the chaos if your power company could take money from Sony Corp. so that its appliances got a higher quality of juice -- and thus worked a tad better -- than those of Mitsubishi Corp.

The power system wasn't built that way, but high-speed Internet service providers have that very capability. Technology now exists that enables network operators to recognize the data packets that move across their systems, and to prioritize them. This is, in fact, how some universities are spotting and cracking down on music file-sharing over campus networks.

Would Internet service providers exercise that control? Some intriguing speculation came recently from the Yankee Group, a market research firm that services major corporations.

In a controversial report issued early this month, Yankee analysts looked at one of today's hottest technologies, voice service over the Internet, also known as VoIP. Specifically, the analysts were pessimistic that the biggest VoIP player today, New Jersey-based Vonage Corp., could survive once the cable and telephone companies that provide most broadband Internet connections jump into the VoIP game, as they are beginning to do.

Primarily, the analysts said, the Internet operators would effectively bundle VoIP with other offerings, making it hard for independents such as Vonage to compete. But the analysts also said this:

"It may seem like a dodgy competitive tactic, but broadband network providers could slow down Vonage's service. As subscribers increase their use of latency sensitive and graphic rich . . . traffic, broadband providers could give network precedence to their own revenue-generating services. Unless Vonage pays fees to the network provider, there is no reason the operator should not make the service a lower priority on the network."

This is a bit chilling to Vonage chief executive Jeffrey Citron.

"If that happens in this world, the value of the Internet would instantaneously be massively devalued," he said, because it could happen with any kind of content or application. Although Vonage has seen no actions to degrade its service in the United States, its engineers are suspicious about some complaints it has received from customers in Canada.

Citron said network operators might not choose to impede some services. They could achieve the same thing by having companies pay to have their content or services delivered faster, or first.

Yankee Group analyst Lindsay Schroth considers that reasonable. Why shouldn't the companies that built and run the Internet pipes feeding the home be able to capitalize on their investments? In her view, Internet service providers will begin to provide add-on services, such as higher speed movie downloads, or enhanced online gaming, for additional fees paid by consumers.

Link Hoewing, a Verizon Corp. vice president in charge of Internet policy, said he does not think consumers or businesses would tolerate active discrimination by ISPs. But he said providers need to be able to make money on services beyond the basic connection fee.

Citron said he hates government regulation in general, but this is one case where it might be needed. He said the government should spell out what constitutes a minimum level of broadband service. At least then, he said, Internet users could always receive a baseline level of service, and could pay more to upgrade if they wanted.

The cable industry's trade arm dismisses this as needless regulation, a solution in search of a problem. National Cable Television Association spokesman Brian Dietz said it is hardly in cable's interest to meddle with VoIP quality, because more VoIP users means more broadband customers.

And if customers don't like the Internet service they are getting on cable, they can switch to high-speed DSL from a phone company, he said.

AT&T, which also is jumping into the VoIP market, says it is taking the cable industry at its word that it will not discriminate. But the company is watching carefully and worries that the potential for mischief increases as the country increasingly moves toward a broadband duopoly of the large phone and cable operators.

At the FCC, Chairman Michael K. Powell has endorsed the notion of neutrality and challenged the industry to uphold it.

But no rules proceedings are in the works, pending a court case that could change the rules governing cable Internet service.

In the meantime, though, technology marches on.

.Com columnist Leslie Walker is away and her column will resume when she returns. Jonathan Krim can be reached at krimj@washpost.com.

© 2004 The Washington Post