The state of New Zealand’s internet

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I watched with some amusement a few months ago at the outcry in America when several ISPs introduced download caps — a system which New Zealander’s are well used to by now, having had caps against our DSL plans since the dawn of time. The case I was particularly watching was Comcast introducing a 250GB cap on all downloads; roughly 10 times that of the average NZ internet plan. For Americans used to not having any sort of cap, and being able to download as much as they liked, this concept seemed foreign, and there was a general outpouring of distaste at the decision.

Naturally, this got me thinking about little old New Zealand, who seem fairly content with their measly 20GB caps, and it began to dawn on me where the disparity largely arose from. For the most part, I believe Americans are consuming American content, hosted on American servers. At a guess, I’d estimate that something in the order of 80% of all data consumed in the US, originates in the US. This is in contrast to NZ, where we are somewhat lacking in local content. I’d wager (again, just an estimate) that only 20% of our traffic is local, and 80% must come down through international links. Local data is cheap. Hauling data internationally is not.

Here’s where the problem comes in. Currently there are only two, privately-owned international links between NZ and the rest of the world, both owned by the same collective. They’re fairly well maintained, frequently upgraded, and can support a reasonable amount of bandwidth; however, naturally, due to the monopoly these cables hold over traffic between NZ and the rest of the world, prices can be kept relatively high with little fear of financial repercussions due to loss of business. I’m unsure whether these prices are government regulated.

Our new National government has made promises to improve the state of NZ’s internet. The big “plan” they’re currently pushing in parliament is a nationwide fiber network. This is all well and good (and should definitely be a long-term goal), but I think it’s a bit of a red herring. What’s the point of being able to get content from other NZers at 100Mbps if we can only squeeze 2Mbps out of our international link (which we use for 80% of our content). I believe a higher priority should be creating a government-owned/regulated international link that can competitively drive down the cost of hauling data internationally. There are plans for a second (privately-owned) link currently in progress, but this is truly the bottleneck for NZ’s internet currently, and needs a lot more work.