TelstraClear is rejecting suggestions that it ever offered free peering to Auckland-based ISP ICONZ, saying the companies had a commercial agreement that including "traffic exchange."
Spokesman Mathew Bolland says ICONZ received free traffic exchange between the two companies as long as it was buying national or international traffic.
"Two and a half months ago ICONZ advised it would be terminating its international connectivity agreement with TelstraClear. We acted on this request and also reminded it that if it still wanted national connectivity and traffic exchange, it would need to enter into a national connectivity agreement."
Bolland says ICONZ was given plenty of notice that the traffic exchange deal was coming to an end.
He also says TelstraClear is seeking outstanding payments owed by ICONZ.
"While we cannot go into the detail of confidential commercial arrangements with ICONZ, it should be noted that we are in commercial dispute over outstanding payments owing to TelstraClear and other issues under the terminated agreement."
ICONZ general manager Sean Weekes was not immediately available for comment.
The dispute over peering arrangements boiled over yesterday.
TelstraClear ceased peering with ICONZ on Friday night after ICONZ had chosen another international bandwidth provider.
ICONZ network manager John Russell posted an angry email to the New Zealand Network Operators Group (NZNOG) mailing list slamming the decision.
"[TelstraClear] have decided that since ICONZ no longer buy international bandwidth from them, and we don't meet "current policy", they're going to drop all domestic peering with us".
Traffic between the two ISPs will be routed internationally and end users charged accordingly without a domestic arrangement in place.
Russell also baulked at the price TelstraClear is offering for domestic traffic.
"We have been offered the option of buying domestic-only peering from TelstraClear for the meagre sum of $25 per 64Kbits/sec per month. We've got 100Mbits/sec to APE, so that means we'll only be charged $40,000/month for TelstraClear to get one of their techs to add a "neighbour a.b.c.d" line to their router so that we (and [TelstraClear]) can use the links that we both already have in place".
Russell also questions the motive for not peering with ICONZ.
"ICONZ is a major NZ ISP, we have a nationwide network, multiple POPS, we're peered at APE, WIX, we've got a bunch of major web presences hosted with us ... if we don't meet TC's peering criteria, then who the hell does?"
Computerworld Online understands ICONZ is seeking advice from the Commerce Commissioner as to whether this move is anti-competitive.
The ISP code of practice, put together by InternetNZ in 1999, clearly addresses this issue.
"In acknowledgement of the co-operative nature of the Internet, all members of the Internet Code of Practice who provide Internet Access services agree to the principal of unrestricted and open interconnection between members," the code says.
Only Clear Communications is listed on the InternetNZ site as a signatory to the code. InternetNZ is currently trying to build support for a new code of practice to replace the existing, usually ignored, code.
InternetNZ executive director Peter Macaulay hopes the disagreement will be sorted out in as short a time as possible.
"We don't want to see traffic being diverted to Australia when it should be domestic. That's not acceptable to anyone I don't think."
Macaulay says he would hope TelstraClear would see the bigger picture on this matter.
"They're certainly within their rights as a commercial organisation to charge a commercial rate, but they're not acting within the spirit of how things have been done in the past. I think if they were to review that policy what little bit of money they might lose in the short term they'd more than make up from support and reduced costs in the long term."