The Australian Competition and Consumer Commission (ACCC) will hold a public inquiry into whether Internet interconnection services should be regulated under the Trade Practices Act.

The inquiry – which will take at least six months – follows requests made to the ACCC from the telecommunications industry to look into whether or not there are anti-competitive agreements covering Internet network interconnections. “Whilst consumers can already send emails to almost anyone they desire and visit websites located in far flung destinations all over the world, the ACCC is concerned to ensure that the arrangements between domestic ISPs that allow consumers to do this are competitive,” said Ross Jones, acting ACCC chairman.

He said there are some “apparent curiosities” with current interconnection arrangements. “If I am connected to a smaller ISP and I send an email to my friend at one of the four larger ISPs, the larger ISP will generally charge my smaller ISP for sending the email. However, when my friend at the larger ISP send me a return email, my smaller ISP will have to pay the larger ISP once again,” he said.

He said the ACCC wants to determine to what extent the way in which Internet traffic moves may inhibit competition and whether in the long term, consumers will be better off if the ACCC is “more directly involved.”

Jones said: “If an Internet interconnection service was declared, the carrier or network owner that provided Internet access would be required to allow another network owner to connect to its network on terms and conditions that may ultimately be set by the ACCC.”

Speaking to iTnews, Michael Cosgrave, general manager, telecommunications at the ACCC, said over the next few weeks, the ACCC will be releasing a discussion paper and will make a public announcement.

He said the ACCC is calling for written submissions around whether there is a problem with the way ISPs are dealing with each other in the marketplace and may also consider holding public hearings if necessary.

Cosgrave said the ACCC is giving the industry “an opportunity to sort this out.” He said ACCC would like to see a “sensible mechanism in place” for carriers of different sizes [to resolve] issues relating to payment for ISP services that are delivered across multiple [carrier] networks. “There should be some reciprocal arrangements that re-ignite the value of each network,” he said.