Agreed, unless of course the Telco has made the business decision to zero rate the likes of Netflix at which point you have to say that the business decision was flawed. From: nznog-bounces(a)list.waikato.ac.nz [mailto:nznog-bounces(a)list.waikato.ac.nz] On Behalf Of Sam Russell Sent: Monday, September 24, 2012 10:21 AM To: Juha Saarinen Cc: nznog(a)list.waikato.ac.nz Subject: Re: [nznog] ETNO SPNP proposal The ISP customers pay to be connected to anything in the world, so they've already paid for the traffic that they're requesting. This is just another example of telcos trying to drag us back to the dark ages so they can continue to extract rent from us for things we don't want Sent from my iPhone On Sep 24, 2012, at 10:07 AM, Juha Saarinen wrote: Wrote this earlier today: http://www.itnews.com.au/News/316593,eu-telcos-seek-end-to-settlement-free-p... Would be interested to hear what the local view on mandatory SPNP. Hei konā mai, -- Juha Saarinen AITTP juha.saarinen.org http://twitter.com/juhasaarinen Description: Image removed by sender. http://twitter.com/juhasaarinen Twitter Description: Image removed by sender. _______________________________________________ NZNOG mailing list NZNOG(a)list.waikato.ac.nz http://list.waikato.ac.nz/mailman/listinfo/nznog

-----BEGIN PGP SIGNED MESSAGE----- Hash: SHA1 On 24/09/2012 10:31, Sam Russell wrote:

That's a good point.

Didn't the old "free dialup internet" plans come about as a way to deal with SPNP? The version I heard was that Clear had to pay lots to Telecom because more calls went from Clear to Telecom than the other way, so getting Telecom customers to dial into Clear (and it was dodgy so you'd have to dial up when it dropped out every half hour or do) meant Clear could get money back from Telecom.

If telcos had done settlement free peering instead of this rent-seeking SPNP that's designed to squash out smaller players, then smaller players wouldn't have to resort to such contrived tactics to stay afloat, and could focus on providing better value to their paying customers

I'm sure others who were around at the time will correct any mistakes, but the way that the likes of i4free and zfree came about was that Telecom charged Clear a lot more for interconnect termination than they were prepared to pay for the reverse. The volume of minutes was irrelevant, Telecom maintained that their vastly-larger customer base entitled them to this monopoly rent because it was more valuable to Clear customers to be permitted to call into Telecom's network than vice versa. However, because dialup internet calls tend to be for very long periods of time the per-minute nature of interconnect charging meant that if Clear could be the destination for a whole lot of Telecom landline customers' internet calls they would make money out of interconnect. So they got other ISPs to use Clear ISDN tails, meaning the calls were terminated into Clear's PSTN network for interconnection purposes, and gave the ISPs a cut (or, in the case of zfree, kept it all). Voila i4free, followed shortly thereafter by 0867. The whole debacle came about because Telecom were allowed to get away with being a predatory monopoly courtesy of a non-existent regulatory environment, so there was zero chance that settlement-free peering would've happened. That Telecom got away with introducing 0867 as a way of terminating the market for interconnection arbitrage demonstrates how impossible it would've been for any kind of market-neutral system to have developed. - -- Matthew Poole "Don't use force. Get a bigger hammer." -----BEGIN PGP SIGNATURE----- Version: GnuPG v2.0.17 (MingW32) Comment: Using GnuPG with Mozilla - http://www.enigmail.net/ iEYEARECAAYFAlBfj84ACgkQTdEtTmUCdpx2IQCfQtydz5C623RTv8vDpxCP58Kl tQUAnjZhdPPrHlJZ6gf60OdUVzUCJd02 =ukbZ -----END PGP SIGNATURE-----

On 24 September 2012 10:40, Matthew Poole wrote:

The version I heard was that Clear had to pay lots to Telecom because more calls went from Clear to Telecom than the other way, so getting Telecom customers to dial into Clear (and it was dodgy so you'd have to dial up when it dropped out every half hour or do) meant Clear could get money back from Telecom.

My understanding is that Telecom would pay on calls into Clear (expected to be toll calls) and Clear would pay Telecom on calls that came back out at the far end into Telecom's network and terminate. What ISPs, and call centres, provided for Clear was a call sink where the call stayed in Clear's network and Clear kept the money. The small toll-bypass fee for long-distance carriage that Telecom expected to pay most of the time suddenly turned into long-hold local calls terminating in Clear. Quel horreur. Hoist on their own petard Telecom did what any counterfactual argument would predict, changed the rules. That only a market dominant incumbent would have the coercive power to demand this didn't seem to penetrate the judicial assessment of the case. The interconnect hand-waving is a complete farrago. We pay to receive as well as call, in the PSTN and elsewhere (except postal, where this all began), and so the delivering network has no justification for additional fees. The payment is even more explicit wrt to the Internet, ISPs meter up and down and are paid, well. Interconnect fees (for termination, not the toll-bypass (transit?) example) are simply well-argued, by market dominant incumbents, anti-competitive barriers to entry. It will be interesting to see how our new Telecommunications Commissioner with a background including credit card interconnect will regard these tantrums: "Visa and Mastercard Case – Progress so Far In 2006, the Commerce Commission and a group of major retailers issued civil proceedings against Visa and MasterCard and against participating banks. The allegation is that the schemes’ interchange fees and rules breach the restrictive trade practices provisions of the Commerce Act 1986. In August this year, the Commission settled with Visa and MasterCard, agreeing on some changes to fee setting procedures and to the rules. At the time of writing this outline, the Commission has not settled with the banks, nor have the retailers settled with either of the card schemes or with the banks. Any remaining claims will be heard at the High Court in Auckland, starting in October this year. This conference session will update the progress with the case and summarise the economics of payments schemes. Stephen Gale, Director & Ben Gerritsen CASTALIA ADVISORS" http://www.brightstar.co.nz/content/brochures/2009/BC032.pdf Hamish. -- http://hamish.kiwi.me