TelstraClear says it has no plans to charge ISPs for peering with its network despite rumours that say the opposite.
Peering allows ISPs to pass national traffic directly between themselves rather than having it transferred overseas first.
However one system administrator who contacted Computerworld Online says TelstraClear is re-defining "peering" to force most of New Zealand's ISPs to pay for connection to the TelstraClear network.
"Nobody meets their definition of what a peer is, apart from Telecom," says the administrator who did not wish to be named.
TelstraClear's head of wholesale Ray O'Brien says peering occurs only between networks of similar size.
"If you look at the US there are a number of tier one carriers that include the likes of MCI, AT&T and some others. They peer between themselves and don't charge each other for the exchange of traffic. They charge everyone else for access to their transport network. It's the same in almost every country."
O'Brien says in New Zealand there are only two carriers with national networks, Telecom and TelstraClear and they peer directly between each other. Other smaller ISPs, however, have been charged for connectivity with TelstraClear's network all along, says O'Brien.
He says TelstraClear constantly reviews its pricing in an "evolutionary" manner and that may affect peering arrangements in the future.
According to Keith Davidson, president of InternetNZ and owner of Masterton-based ISP Wise Net, the benefits of peering arrangements are that all parties involved make more efficient use of their network connections rather than having to pay international traffic charges.
A large number of ISPs in New Zealand peer with one another via two exchanges - the Wellington Internet Exchange (WIX) and the Auckland Peering Exchange (APE) and, apart from a flat monthly fee to maintain the premises, charging is kept to a minimum.
Davidson says he would connect to WIX if it extended out as far as Masterton.
"We'd love to connect to either WIX or APE if we had the chance but we're too far away."
Davidson says peering arrangements through exchanges like WIX and APE help keep the cost of national traffic down for end users as well.
Those ISPs that cannot reach APE or WIX, or who chose to connect directly with another ISP, may pay a commercial agreement, however a large percentage of New Zealand's national traffic is carried between networks via APE or WIX at no extra cost.
A number of system administrators who have spoken to Computerworld Online have voiced concerns about any additional charging by either TelstraClear or Telecom. None were willing to be named for fear of souring relations between their own companies and the carriers. However, all are adamant that any income TelstraClear would make from such a charging regime would not offset the additional costs and network inefficiencies caused by ISPs refusing to peer with TelstraClear.
"There's been talk of a ban on peering with them if they introduce some kind of charge. AT&T tried it when they came here and nobody would pay and eventually they stopped," one administrator said. Such a ban would mean any traffic to and from TelstraClear from a non-peering ISP would possibly have to travel internationally to get to its destination.
CityLink manager Neil de Wit describes the move as something only a telco would come up with.
"The rest of us are quite happy to connect without charging each other. It's more efficient. It means traffic passes through without any problem and everyone benefits. They want to charge for network space because that's the model they've come over from in the telco world."
One of the system administrators says the move is being driven by "bean counters" in Australia.
"Telstra charges for peering in Australia so someone's obviously said 'thou shalt do so in New Zealand also' without actually looking at the New Zealand model."
O'Brien says no company can afford to build a network and not charge for traffic over it.
"The dot coms all fell over because they believed in free access. That can't be the case because people won't invest."