ACCC decides against peering inquiry

With Telstra, Optus, and TPG abiding by its recent recommendation to publish peering criteria and policies online, the ACCC has said it will not kick off a declaration inquiry into internet interconnection services.

The Australian Competition and Consumer Commission (ACCC) has published its findings on the nation's internet interconnection arrangements, saying ISPs' compliance with its recent recommendations means competition will improve in services being supplied to corporate and government customers.

As a result of its communications industry market study, concluded in April, the ACCC had said Optus, Telstra, TPG, and Verizon should publish on their websites their peering criteria and policies, and said it would continue assessing the competitiveness of internet interconnection services in Australia.

The ACCC assessment of internet interconnection arrangements [PDF], released Tuesday morning, said Telstra, TPG, and Optus have all now published their peering criteria online, which the watchdog said will increase transparency.

"As there are equipment, circuit, and management costs associated with establishing direct interconnection arrangements, the peering criteria identify the requisite attributes of a prospective peering partner including geographic network reach, exchange points, minimum capacity requirements, and symmetry of traffic exchanged," the assessment said.

"Going forward, we expect large internet service providers who enter into bilateral peering arrangements with each other to also publish their peering criteria."

"It is important that the big ISPs in particular publicise and apply their criteria in good faith so that other providers have a transparent pathway to peering status as they attain additional scale with the rollout of the NBN and other next generation fixed and mobile networks," ACCC Chair Rod Sims added.

While acknowledging that Telstra, Optus, and TPG "hold some market power" in the internet interconnection market, the ACCC said it did not find evidence of anti-competitive conduct.

It had also been concerned that "stasis" in peering arrangements pointed to an "apparent market failure" and lack of competition, but said the recent deal between Telstra and Vocus was welcomed as progress for downstream markets.

"This should improve the ability of Vocus to provide competitive wholesale transit services to other providers, with positive flow-on impacts in downstream markets including the corporate internet market," the ACCC said.

"We consider that ISPs now have a transparent pathway to obtain peering with Optus, Telstra, and TPG by attaining the necessary network scale to meet their peering criteria. In light of the above, we do not consider there is a case for commencing a declaration inquiry into internet interconnection services."

The ACCC had kicked off its communications industry market study more than two years ago, with its draft report a year ago likewise saying that Telstra, Optus, TPG, and Verizon should "maintain on their website a comprehensive set of criteria and any other relevant policies to which they have regard when assessing peering requests from other networks".

The study had also suggested that the privatisation of the National Broadband Network (NBN) in future should result in the "horizontal disaggregation of NBN Co by different network technologies or areas of coverage", as well as saying non-commercial NBN services should be funded directly from the federal Budget.

"The disaggregated parts would need to be able to contest each other's customer base. In our view, this form of infrastructure-based competition would encourage ongoing investment in network upgrades and deliver price benefits and improved services to consumers over time," the ACCC said.

The ACCC has promoted the eventual separation of NBN for years, with Sims saying in late 2014 that it should be split into three different businesses. The Vertigan panel had in early 2014 similarly recommended disaggregation, citing a boost to competition. However, this had been immediately kyboshed by then-Communications Minister Malcolm Turnbull.

"While disaggregation of NBN Co's business units (as the panel recommends) after the network is complete cannot be ruled out, now is not the time," the former prime minister said at the time.

"Breaking up NBN Co would distract its management, and delay the provision of high-speed broadband to all Australians."

The ACCC's investigation into the Australian telecommunications market also saw it kick off a consultation into whether to continue regulating the service allowing consumers to send and receive calls and messages between mobile phone networks in August.

According to the ACCC, its domestic mobile terminating access service (MTAS) declaration may need to be amended or revoked because the mobile industry has "changed significantly" since 2014, thanks to the increasing use of over-the-top (OTT) services.

"Among the most significant changes are the rollout of the NBN, closure of 2G mobile networks and increased investment in 4G/LTE networks, forthcoming deployment of 5G mobile networks, and the imminent entry of a new MNO, TPG Telecom," the ACCC said.

"Other developments include the continuing growth of OTT services, and the current pricing of retail mobile services, including calls and SMS."

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