Smaller ISPs want payments to big boys regulated

After six years of paying what they call "protection money" to the two major telcos, smaller Internet service providers (ISPs) here are making a last-ditch plea for the big boys to be reined in - arguing that Singapore's ambition to be a content hub will be jeopardised otherwise.

Their call comes after the authorities proposed recently that they would not regulate the payments that give customers of smaller ISPs like M1, ViewQwest, MyRepublic and SuperInternet the shortest path - and fastest access - to websites hosted locally.

The ISPs have complained that these local links cost two to three times more than the price of international links charged by international telcos.

"These costs hit smaller players disproportionately hard, increasing the barrier to entry for new players," said a spokesman for MyRepublic, who called for the authorities to stop the "anti-competitive behaviour".

"It's like protection money, where the bigger players show everyone who's in charge."

Mr Benjamin Tan, managing director of SuperInternet, agreed: "If the police do not act, gangsters will rule."

Mr Patrick Scodeller, M1's chief operating and technical officer, urged the authorities to mandate "peering" - or the free exchange of local Internet traffic among local ISPs - which is practised in Hong Kong.

Mr Scodeller is also the chairman of the Singapore Internet Exchange, which promotes peering.

Mr Vignesa Moorthy, chief executive of local ISP ViewQwest, said the situation is hindering Singapore's plan to become a content and media hub.

"It may reach a point where the streaming experience for content hosted outside Singapore gives a better experience than content hosted by Singtel or StarHub."

Their murmurs started as early as 2009. Early efforts by the Infocomm Development Authority (IDA) to address their concerns resulted in the launch of the Singapore Internet Exchange in June 2010.

Yet today, only half of its 50 members - comprising ISPs, content providers and data centre operators - are peering.

But IDA wants to retain its light-touch treatment. In its consultation paper released on Feb 13, it said that regulation was not necessary as there had been "no evidence" of market failure, such as the abuse of dominance by Singtel or StarHub.

This is because smaller ISPs are not denied connectivity as they can still pay for the links. Consumers also do not suffer due to these payment arrangements.

The regulator cited the availability of 1Gbps fibre broadband plans, which sell for as little as $50 a month.

Such low prices were unheard of in 2009 when a 100Mbps plan - which was 10 times slower - cost at least $70 a month.

The IDA also noted that only 5 per cent of all locally bound traffic from local users is routed overseas, presumably to save on such local direct connection fees.

A Singtel spokesman said: "Peering between ISPs is a commercial arrangement and there are internationally accepted norms that Singapore conforms to. We will provide our feedback to IDA on the consultation."

A StarHub spokesman said the company would study the IDA consultation paper and provide comments "in due course".

itham@sph.com.sg

This article was first published on Feb 24, 2015.
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