Internet interconnection allows customers -- business, residential or others -- that are connected to one Internet network to send and receive e-mails, access Web sites and exchange information with users connected to other Internet networks.
Internet interconnection also enables business and other consumers to make the content they store on the Internet accessible to other users.
The competition watchdog issued its final report today on whether there is a need to regulate Internet interconnection services in Australia.
The ACCC's decision confirms its earlier draft finding that a case has not been made for regulation at this stage, but that there are "sufficient concerns to warrant the implementation of a rigorous but carefully targeted monitoring program".
The ACCC said it sought the views of members of the industry to determine whether declaration is the most appropriate vehicle to address concerns.
The ACCC added that as a result of its inquiries, it has decided that "while interconnection is an essential feature of providing Internet services to consumers, there does not appear to be a bottleneck associated with the supply of such services."
"While there are serious concerns that the market may be subject to the use of market power, the absence of empirical data prevents the Commission from being able to determine whether current interconnection arrangements optimally reflect the relative values and costs of providing interconnection".
The ACCC said it does not have sufficient information at this time to decide whether or not declaration of an Internet interconnection service would be in the long-term interests of end-users. However, the ACCC assured that it will monitor the industry "to gain the requisite amount of information to allow it to act quickly, if required".
The details of the monitoring regime are currently being developed and will be finalised early this year.
On 21 February 2003, the ACCC announced it would conduct a formal inquiry into whether or not an Internet interconnection service should be declared. The inquiry is in response to requests from a number of sources for the ACCC to examine the impact of Internet interconnection arrangements in the Australian industry.
In addition to continuing complaints from smaller ISPs and aspirant peers, the recommendations of the Broadband Advisory Group said that the government should ask the ACCC to investigate and report on industry concerns about domestic peering arrangements.