Finally some progress on internet peering

After several years of nonsense during which the country's biggest internet providers stopped cooperating on internet peering, it seems Telecom is about to set up a new peering system that will effectively be run free of charge for those internet providers making the effort to connect to the system.
Peering was in place in New Zealand up until 2004 and it allowed internet providers to hand traffic between each other at central exchange points in Auckland and Wellington. The ISPs didn't charge each other for handing over internet traffic, so it wasn't a very complicated system to run. It meant that internet traffic could get to its intended destination in a relatively direct route. If a web business was on TelstraClear and its customers were connecting via Telecom the traffic was simply handed between the two companies and distributed.
But the plug was pulled on that arrangement in 2004 when Telecom and TelstraClear de-peered from those exchanges. Why did they do it? Because it cost the telcos less money to de-peer.
They pointed to big content providers like Trade Me and the country's various media portals and said peering favoured these companies because the telcos had to invest in infrastructure to make sure internet peering ran smoothly as internet traffic increased.
But critics of the telcos pointed out that internet users were in fact being charged to access the internet and if they wanted to use Trade Me or the Herald Online, the telcos had an obligation to offer that access in the most efficient way.
Anyway, it all fell apart in 2004 with the Telecom and TelstraClear withdrawing into their shells amid howls of protest from the rest of the industry. Soon the big content generators were negotiating alternative routes to get traffic around the country, which in many cases involved sending traffic overseas. Obviously that chewed up more precious international capacity and led to greater latency in connections so reduced performance for customers.
Telecom is now planning to set up 29 peering points around the country. There are cost details to be worked out and already the smaller ISPs are worried about this. But still, it is a start. There hasn't been any movement on peering in four years so the trials of peering getting under way this month are a real sign that the attitude of Telecom is softening.