A trans-Pacific cable hurrah

Bill Bennett -

Hawaiki's planned US$300 million trans-Pacific submarine cable linking New Zealand, Australia and the United States looks likely to go ahead.

At The Dominion-Post, Tom Pullar-Strecker reports the project will soon confirm equity partner funding from the Todd Corporation. He says Communications Minister Amy Adams tells Parliament the government is working with Hawaiki.

Pullar-Strecker says the project has "about 70 per cent" chance of going ahead. He put the earlier Pacific Fibre project's chances at 50 per cent.

This seems right if the Todd Corporation confirms its involvement.

A second trans-Pacific cable

Supporters of a second trans-Pacific cable network to compete with the Southern Cross Cable Network offer many arguments. Some are better than others:

  • Capacity is not an issue. Today we use only a fraction of Southern Cross's existing capacity. While demand continues to increase, so does that network’s ability to boost capacity. What’s more, the internet centre of gravity is shifting from the US to Asia. If anything future capacity constraints will be west of New Zealand, not to the east.
  • Improved latency. Pacific Fibre planned a direct cable which would offer reduced trans-Pacific ping times. It’s not clear to me that Hawaiki’s ping times would be shorter than those on Southern Cross. This may not be important for anyone other than gamers. Most important cloud services have hosts closer to home and local caching eliminates latency problems for many other services. Latency is an issue for a minority.
  • Lower cost. This argument says Southern Cross has a monopoly and charges New Zealanders too much. There is something in this, but every time a competitor gets momentum Southern Cross sharpens its prices as it tries to see off the newcomer. Building a network, as opposed to planning one, means more competition and lower margins. But don’t expect huge price drops when a rival network starts.
  • Security is the best argument of all. New Zealand’s entire communications hang by a single thread, well two physical cables, but a single cable operator. Given our entire economy depends on these links adding the third link means there’s a smaller risk of everything falling over at once.
  • New. Southern Cross is now 14 years old. That means it’s roughly halfway through its expected life. Although there’s every chance it will last many more years, at some point we need to think about a replacement and that has to be in place long before the existing cable runs out of steam.
  • Technology. On a similar note, technology has marched on in the past 14 years.  While Southern Cross can update the kit running its cable, engineers have learnt new things since building that network.