A few people have asked for a copy of my recent Mediawatch comment on the Internet peering controversy. Given that the old Mediawatch site is frozen pending a transfer to a new home on the revamped Radio New Zealand site, I thought it would be useful to post the text of the comment here (and in keeping with an informal tradition of posting geeky stuff on Thursdays). So far as I can see, nothing's happened to require an update, so here is the original text:
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You may think that getting access to the Internet is, in a commercial sense, fairly straightforward. You decide what kind of connection you want, you pay an ISP - Internet service provider - and off you go, visiting any website you wish.
Not so fast.
Would it surprise you to know that the country's two biggest telecommunications companies, Telecom and TelstraClear, also want website owners to pay them to deliver you the content you're paying them to receive?
It wasn't always thus. This time last year, both companies connected to the Wellington Internet Exchange and the Auckland Peering Exchange; the WIX and the APE as they're commonly called.
Traffic flows freely and directly between operators connected to these exchanges, but is not actually free. If you connect to the Internet and use, say, Trade Me, the website owner carries the cost of the first leg of the journey - from his web server to the exchange. You, through your account with your ISP, pay for the second leg - from the exchange to you.
But not any more if you're a customer of Xtra, Paradise or Clear Net, or you use a Telecom JetStream connection sold to you by another ISP. That's because Telecom and TelstraClear want to charge both you and the website owner for that second leg.
Metaphorically, it's like a supermarket taking delivery of sausages from a sausage supplier. The supplier pays for the journey to the supermarket's back door. And you, because you can't get to the market, pay the supermarket to have those sausages delivered to your door.
But now the supermarket wants to charge the sausage supplier for delivery to your door too.
Specfically, the telcos want other operators to buy a dedicated connection from them, in order to connect to their networks. They regard this demand for payment as no more than a justifiable return on their substantial investment in their networks. They have spent billions between them on fibreoptic cables and other hardware. We couldn't do without them. Why should they not clip the ticket wherever they can?
But most of the organisations connected to the peering exchanges aren't paying up. And now a web page sent from Trade Me in Wellington to your computer in Wellington - which used to pass directly across the exchange - is now likely to go via Auckland.
Depending on the circumstances, it is quite possible for such traffic to take a path right out of the country and back again. This is what Internet engineers call a "perverse routing decision".
There is, of course, nothing in this new charge for you, the retail customer. Your Internet bill will not decrease as a result of it - that is calculated largely on the cost of getting data to you across the ocean from outside New Zealand. And furthermore, your Internet experience may not be as advertised.
You may find some websites are slower to use: especially in the case of the kind of audio and video content offered by TVNZ and, lately, Radio New Zealand. RNZ guarantees only a slow "base service" to customers of those ISPs owned by Telecom and TelstraClear. The broadband version isn't guaranteed. Your taxes are paying for content you can't get.
And that's not all. Various government agencies connect to the WIX in Wellington. They're not paying up either. As a result, traffic between a ministry and someone on an affected Internet connection within - literally, if you wish - spitting distance can go via Australia. That this may actually breach the law has not escaped the notice of the e-government unit at State Services.
It's quite likely that many content providers would decide that hosting their New Zealand websites for New Zealanders in America made more economic sense than staying here and paying more. But what if they did just fork over? Would that fix everything? No.
The key idea of peering is keeping local traffic local, because that means better performance. The way the telcos want to run things, it would still be quite possible for traffic between you and a website in the same town to go via Auckland. Remember that phrase: perverse routing decision.
It's the great old Internet argument: geeks versus suits, and it's fair to say that minds are set on both sides. There's certainly a degree of fervour amongst the pro-peering lobby led by the Wellington network company CityLink, which operates the exchanges as a public good. A recent seminar on the issue had the atmosphere of a revival meeting.
Part of the problem is that there's no overseas precedent for this. In Wellington, CityLink has lowered the cost of entry so much that some end users - website owners, companies and public agencies - are simply connecting directly to the exchange, rather than going through an ISP. That doesn't happen at exchanges overseas.
This is great for users, especially if they want to communicate directly with each other, but it also cuts the big ISPs out of the picture.
So what we have now is a standoff. But it's one that might soon be broken.
CityLink is establishing a national network of Internet exchanges - in Palmerston North, Hamilton, Christchurch, Dunedin and Southland. At each of those exchanges, a group of media companies - TVNZ, Radio New Zealand and probably APN, Fairfax and others - will install mirror servers, each containing a copy of their web content. You'll get your media stuff quickly from the exchange nearest to you.
Unless, of course you are an Xtra, Clear Net, Paradise or Telecom JetStream customer. You'll get yours from the other mirror being established - the one in California.
The capacity to bring all this data across the ocean from America will represent a genuine cost to Telecom and Telstra Clear. If they were picking up the traffic directly from local exchanges New Zealand the cost would be negligible.
Their determination to push for sales income at an expense both to them and their customers may end up looking very perverse indeed.