Anthony Doesburg: Across the Tasman, two cables better than one

Page 1 of 2 View as a single page 4:00AM Friday April 25, 2008
By Anthony Doesburg

Best of business analysis

• Stock Takes: Misstep in the right direction
• Brian Fallow: Bollard leaves out a 'significant' word

When state-owned Kordia said this month that it was working on a plan for a fibre optic cable across the Tasman, its significance was less to do with faster international internet access than with security.

Contrary to what many might think, we don't suffer from inadequate international capacity, believes Keith Davidson, head of InternetNZ, the body in charge of internet governance.

"The most important thing to us is that another cable would provide a divergent pathway."

Internet users are vulnerable to failure of the existing Southern Cross cable. When that link was commissioned in 2000, 50 per cent owner Telecom said it was engineered for 99.999 per cent availability, equating to a maximum of 50 minutes of network downtime every 10 years.

In reality, if the cable suffered a physical break - and Davidson is sure that's a matter of when, not if - repairs would take a little longer than a few minutes. "Southern Cross will break one day and it could be several days or weeks before it is restored."

The risk is not just of the cable being sliced through. Davidson says determined "script kiddies", or hackers, have the potential to launch a denial of service attack that could cripple the Southern Cross cable.

If a new link also put pricing pressure on Southern Cross, Davidson wouldn't complain. However, he sees some risk that a second transtasman bandwidth provider could take its place in the kind of cosy duopoly that exists between Telecom and Vodafone in the mobile phone market.

It might at least introduce a little transparency to pricing which, with Southern Cross registered in the Bahamas, is lacking at present.

Kordia, which provides transmission services to most broadcasters and also owns internet service provider Orcon, has signed a memorandum of understanding with Australian company Pipe International to collaborate on the transtasman link.

But details are sketchy. Pipe is in the process of laying fibre from Sydney to Guam, a link it is calling PPC-1. PPC-1 has been designed with a branching unit in waters 120km east of Sydney for connecting with a cable from Auckland, PPC-2.

The Sydney-Guam cable is expected to be in operation by June next year, says Pipe managing director Bevan Slattery. He can't say when work on PPC-2 will get under way, nor how the project cost and cable ownership will be divided up with Kordia, except that Kordia will be the majority owner. The two companies were independently working on transtasman cable plans when they were brought to each other's notice by a third party six months ago, Slattery said.

Whether the Kordia-Pipe deal would survive a change of government is a key question. Davidson doubts National would put the kibosh on the plan.