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A trans-Pacific cable hurrah

Hawaiki's planned US$300 million submarine cable linking New Zealand, Australia and the United States looks more likely.

The Dominion-Post's Tom Pullar-Strecker reports the project will soon confirm equity partner funding from the Todd Corporation. He also reports Communications Minister Amy Adams telling Parliament the government is working with Hawaiki.

I asked Pullar-Strecker what odds he now puts on the project succeeding. He told me 'about 70 percent' and that he put the earlier Pacific Fibre project's chances at 50 percent.

This seems about right to me if the Todd Corporation confirms its involvement.

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 barely 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. I'm also not convinced this is 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. Actually building a network, as opposed to planning one, will mean more competitive pressure 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 hangs by a single thread, well actually two physical cables, but a single cable operator. Given our entire economy depends on these links adding a third link means there's a smaller risk of everything falling over at once.

  • Newness. 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. I've no idea if this means a new cable would be technically better — if you have knowledge on this please get in touch. And it's true that Southern Cross can continue to  update the kit on the ends of its cable. Nevertheless, I suspect engineers have learnt new useful things since that network was built.

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