Asian telcos to bypass US Internet routing fees

A consortium of Asian telecommunications carriers is to set up its own Internet exchange in the US, the carriers have announced.

Officials from the telcos said the move will avoid the millions of dollars of "inequitable" routing fees that US carriers currently charge.

The Asia-Pacific Internet Community (APIC) comprises South Korea's Dacom Corp, Kokusai Denshin Denwa (KDD) of Japan, Cable & Wireless HKT of Hong Kong, Singapore Telecommunications and Australia's Telstra.

APIC will establish a joint Internet router at the Palo Alto Internet Exchange (PAIX) in the US, said John Hibbard, Telstra managing director for global wholesale operations.

"The current situation where non-US carriers are paying the cost of carrying significant amounts of trans-Pacific Internet traffic into and out of the US, while the US carriers pay nothing, is inequitable," Hibbard said. "It does not, in our view, represent commercial reality in a truly competitive global environment."

The router will be ready early August and will be able to transmit more than 1.3Gbits/sec (bps) of Internet traffic, officials from the companies said. APIC members account for around 30 per cent of the Asia-Pacific Internet market.

The router will serve as an interconnection point with the top-level Internet backbones in the US and will provide equal access for APIC members and US carriers alike, Telstra officials said.

The fees paid by Asian carriers to their US counterparts -- up to $US250,000 a month -- to route their Internet traffic in the US has been a point of disagreement for some time. In addition to the monthly fee, Asian carriers pay for the leased lines to the US under a deal whereby Asian ISPs (Internet service providers) pay for circuit costs to the US. Attempts by Asian carriers to get their US counterparts to pay some of this cost have consistently been unsuccessful.

"We have experienced explosive growth of Internet traffic over the past three years in all our markets and foresee continuing exponential growth in the years ahead," Hibbard said.

"APIC members play a significant role in the regional and global Internet communities, and this joint initiative is likely to be just the beginning of asserting our presence in the US market."

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