 Arbitrage is routing traffic via an intermediate country to take advantage of the differences in settlement rates.If country B has much lower settlement rates with country C than with country A, it might be cheaper for country A to send its traffic for country B via country C. One of the first larger arbitrage routes was for traffic between Australia and the US, which was cheaper if sent via New Zealand and Canada.Arbitrage is and was practiced even before the spread of de-regulation.