CloudFlare co-founder and CEO Matthew Prince has said that Australia's transit network pricing for supplying peering services to the country is "out of whack" with the rest of the world, due in large part to Telstra's dominance in the market.
In a blog post today, Prince compared the cost of CloudFlare buying bandwidth across a number of different areas from the United States, Europe, Asia, and Australia.
Prince said that in Australia, CloudFlare peers with almost every internet service provider except for Telstra, which "charges some of the highest transit pricing in the world", at 20 times the benchmark of $100 per Mbps.
The cost of peering in Australia is the most expensive for anywhere in the world, according to Prince, with prices in Australia each month amounting to what the company pays to serve all of Europe, even though Europe has around 33 times the population of Australia.
"If Australians wonder why internet and many other services are more expensive in their country than anywhere else in the world, they need only look to Telstra. What's interesting is that Telstra maintains their high pricing even if only delivering traffic inside the country," Prince said.
"Given that Australia is one large landmass with relatively concentrated population centres, it's difficult to justify the pricing based on anything other than Telstra's market power. In regions like North America, where there is increasing consolidation of networks, Australia's experience with Telstra provides a cautionary tale."
Despite the large cost difference in providing transit to Australia, Prince said that the CloudFlare price of directing traffic to Australia would remain the same.
"We'll continue to work to decrease our transit pricing, and increasing our peering in order to offer the best possible service at the lowest possible price. In the meantime, if you're an ISP who wants to offer better connectivity to the increasing portion of the internet behind CloudFlare's network, we have an open policy and are always happy to peer," he said.
A Telstra spokesperson said CloudFlare's claims were well above what Telstra charges.
"Cloudfare's figures are factually incorrect and are far in excess of Telstra's actual charges. For a customer in Australia wanting gigabyte bandwidths around the benchmark Cloudfare are using, they are overstating our charges by a factor of ten," the spokesperson told ZDNet.
Last week, Vodafone Australia CEO Inaki Berroeta also said that the high cost of transit links to regional locations of Australia made it very expensive for mobile telecommunications companies other than Telstra to expand their network. Vodafone has lobbied NBN Co for over a year to make its fibre links available to mobile telecommunications companies to improve their mobile networks.