Telecoms incumbent Telkom and local Internet service provider (ISP) MWeb have yet to reach any resolution regarding MWeb's unilateral demands for open peering.
Despite MWeb's good intentions for competition in the industry, analysts suggest the ISP may have to compromise on its standpoint first in order to break the stalemate with Telkom.
MWeb says discussion with Telkom regarding peering is ongoing. However, Telkom says: “MWeb's request for peering was considered by Telkom. At this stage, the request was refused in terms of Telkom's current peering policy.”
Meanwhile, transit links between the companies' networks remain severed while MWeb re-routes its traffic across international networks at the risk of high latency connection to its customers.
Peering is the arrangement of traffic exchange between ISPs. Larger ISPs with their own backbone networks agree to allow traffic from other large ISPs in exchange for traffic on their backbones.
ISPs may opt to enter a peering arrangement if they can justify similar content volumes and, by extension, similar traffic patterns between their networks. However, larger ISPs usually opt to charge the smaller players for transit links, because the traffic patterns between the two networks are inevitably unequal.
Deadlock
MWeb has stood firm on its demands, arguing its decision will aid competition in the industry and will lower the cost of the Internet for the consumer. Smaller ISPs, including Vodacom and MTN, have heeded MWeb's demands, but Telkom refuses to budge on the issue.
The operator previously slammed MWeb's demands, arguing that peering is not meant to amount to free provisioning of network infrastructure by one party to another, since someone has to cover the capital expenditure of the network.
Frost & Sullivan senior analyst Vitalis Ozianyi explains that MWeb may be on the losing end of this argument.
“Given the size and architecture of Telkom's network, currently all ISPs in SA depend on Telkom for IP transit to some degree. For this reason, Telkom transports more traffic for each ISP as compared to the volume of Telkom's traffic an ISP like MWeb transports. In Internet economics, full peering is only feasible when the volume of traffic exchanged by ISPs is comparative,” he explains.
However, World Wide Worx MD Arthur Goldstuck argues that MWeb is fully justified in its fight, given that it is the second largest consumer ISP in the country and on a par with Telkom in terms of consumer traffic.
“It's not in the interest of consumers, ISPs or the industry, as a whole, for traffic to be routed internationally when we have an increasingly first world network infrastructure in this country,” he continues.
“We have the absurdity that MWeb is buying capacity on SAT3, the undersea cable controlled by Telkom, and yet the latter will not peer locally. That does not strike one as the attitude of a good corporate citizen,” argues Goldstuck.
Compromise required
Ozianyi explains that the only feasible solution for the stalemate is partial peering based on location and traffic quotas.
“This basically means MWeb and Telkom could agree to enforce peering to the extent to which traffic exchanged across their networks equalises, and then charge for the extra traffic above that quota,” he offers.
Telkom previously said it wishes to engage in alternate content distribution mechanisms with mutual benefits to the MWeb and Telkom subscriber bases. MWeb has previously been informed accordingly, Telkom stated.
However, explains Ozianyi, this method will experience some hiccups due to the way Internet traffic flows. That is why the quota-based peering may not work on a national scale, but for selected peering points.
Despite Goldstuck's argument about Telkom's lack of compliance, he concedes that MWeb also needs to be open to compromise.
“It is not entirely unlikely that Telkom has been sent into the bunkers by the belligerent tone of MWeb's stance on this matter,” he concludes.
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