Kim Dotcom put the idea of a fresh submarine cable linking New Zealand to the West Coast of the USA back in the news last week. Chris Keall reports on Dotcom’s plans at the NBR.
Dotcom’s plan simply isn’t going to happen. At least not in the form he proposes. The reason is simple, rightly or wrongly Dotcom’s name is poison with at least two of the groups that hold the keys to a trans-Pacific cable:
- The US government hates Dotcom. It needs to give landing rights permission. Given many American officials still want to throw Dotcom in jail, this isn’t going to happen so long as Dotcom’s name is attached to the project. They will see the cable as a pipe designed to suck all the profits and eventually the lifeblood, out of the US film and music industries.
- Few Institutional Investors will touch Dotcom. They thought Pacific Fibre too risky. Dotcom is worse.
Is the New Zealand government on this list. Dotcom is something of a folk hero, that doesn’t mean government likes or wants him. In a minor way he threatens our trade relationships. Dotcom needs government permission for local landing rights, he also needs government departments to commit to buying fibre capacity.
Pacific Fibre couldn’t make a compelling business case to build a fresh cable. At least not one that investors would buy. That project has some of the country’s best business brains. They are well-connected and wealthy. There aren’t question marks hanging over them.
If Pacific Fibre couldn’t do it, it is unlikely anyone else can.
Dotcom’s plan to build a giant server farm using hydro electricity is clever. It could generate the traffic needed to make a cable viable. Branding it with New Zealand’s clean, green image could work as a lure. Keeping it outside the ambit of US Patriot Act legislation that allows spooks to pry into data at the drop of the hat is also a big plus. There’s also a case for backing up data in a small. democratic country in a tucked away part of the world.
But we’re back to risk. Putting data in a small, remote country with only a handful of fibre links may not look attractive to big corporations – especially if that server is associated with someone like Dotcom.
This isn’t about whether I think Dotcom is guilty or flaky – until he has had his day in court we won’t know how to judge the man. This about how others see him. When it comes to dealing with business risk perception can be as important as reality.