Monday, March 08, 2010

Internet Quality of Service and peering/transit - big EC decision

Toothsome EC decision on Internet transit and peering for your delectation...Note Poland is weird because the incumbent actually refuses to interconnect at the POP for the Polish Internet exchange but instead routes its traffic through its PARENT - France Telecom! It gives absolutely no visibility of its contracts. Was the regulator was trying to force the incumbent to interconnect IN Poland via the Internet exchange (reading between the lines)? That would give some transparency...
"(42) There is further evidence that the delays, if any, in data transmission experienced by ISPs relying on international IP transit are not considered problematic for the delivery of retail broadband services to end-users. In this respect, UKE was not able to provide evidence that the quality of service offered by UPC to its customers was seriously degraded. The Commission notes that UPC offers services to a large number of retail broadband customers and that UPC should have lost customers if the quality of service was considered insufficient by those end-users. This is, however, not the case. On the contrary, UPC is one of the most successful operators in the Polish broadband market. Furthermore, by suggesting that the quality of internet data decreases in proportion to distance, UKE disregards without further analysis the existence of superfast
fibre optic connections allowing end-users to send and download IP traffic between continents with an acceptable quality of service."
This is about local IP traffic from the Internet exchange to Telekom Polska or cable rival UPC's residential customers - yet they blather about fibre...and I suspect the Polish regulator UKE was talking about hops to the end-user, not 'distance'...
Here's what really concerns me in the EC's judgment: This may be France Telecom's test case for the rest of Europe? If I may add, and remember this is POLAND not London or Boston, the EC heavily relies on theoretical competition, whereas the regulator has previously fined and imposed end-to-end conditions on Polska Telekom which now has a long charge-sheet of previous offences:
"Footnote 21: In 2007 the Competition Authority imposed a fine on TP for abuse of a dominant position in the market for the provision of access to end-users of the internet connected to public telecommunication networks. In 2006 UKE imposed non-discrimination and transparency obligations in order to ensure end-to-end connectivity for IP traffic exchange, based on Article 5 of the Access Directive.
(50) As far as downgrading is concerned, the parties exchanging IP traffic are interested in both the reception and provision of high-quality data conveyance services. Hence, the incentive of any operator to discriminate against IP traffic exchange partners in terms of quality is limited. Such a practice would result in retaliatory action or cancellation of direct contractual relationships.
(52) With regard to the lack of a peering policy, which, in UKE’s view, should list clear conditions under which operators in Poland could exchange traffic with TP, the Commission takes the view that this in itself does not point to the existence of SMP. More generally, with the growth of the internet, the diversity of AS has increased. Content-heavy ISPs and large content providers are interacting with ISPs providing mainly broadband access service to end-users, which tend to download rather than upload large volumes of traffic. These changes lead to traffic patterns that are highly asymmetric and impact on how IP traffic exchange agreements are negotiated, i.e. whether a price is charged for the exchange of traffic or whether a (free) peering solution is acceptable to both parties. Peering policies range from open to very restrictive, and would, in any case, permit the negotiation of terms and conditions of IP traffic exchange which are specific to the exchange partners. The Commission finds that UKE does not sufficiently explore the relationships between the relevant actors in Poland, especially when it comes to assessing the outcome of negotiations between content-heavy ISPs and large content providers vis-à-vis TP. Without prejudging the outcome of a future analysis of contractual relationships in the Polish market, it is in principle not unusual that smaller networks or content-heavy networks conclude transit (rather than peering) agreements with larger networks and agree to pay the larger providers to deliver their traffic."
Nick Economides or Emanuele Giovanetti or Bill Lehr might be able to help me out here?

1 comment:

Zed said...

"(50) As far as downgrading is concerned, the parties exchanging IP traffic are interested in
both the reception and provision of high-quality data conveyance services. Hence, the
incentive of any operator to discriminate against IP traffic exchange partners in terms
of quality is limited. Such a practice would result in retaliatory action or cancellation
of direct contractual relationships."

The mind just boggles. The only thing that can be concluded from this is that the EU commission is either stupid, incompetent or bought by private interests. Have these guys no insight into the market dynamics of incumbents, alternative operators and content providers?

Of course it is in the interest of an incumbent to both deny interconnection to newcomers and to heavily oversubscribe any existing interconnects.

This strategy hurts competitors with smaller market shares and third party content providers much more than it inconviniences the incumbent.

Since interconnectio to third parties is crap, the incumbent gets to promote its own on-net services (as over the top services are unusable) and gets to market its own network as "better" (as competitors find it impossible to communicate at full speed to the incumbent's end users).