Fibre, fibre, fibre
Very welcome news on Monday that Kordia is going to invest in a new fibre cable between New Zealand and Australia. Initially it will have 240 Gb/s of capacity. But it it not just the capacity that is welcpome, but the competition it will provide to Southern Cross Cable and Telstra who have pretty much all the international bandwidth.
Southern Cross Cable has also announced a boost in capacity to 860 Gb/s so we will in a few years have 1 Tb/s capacity. But that only allows 125,000 to be using the Internet at the same time at 8 Mb/s or 1 MB/s. The SCC has 2.5Tb/s maximum capacity but new technology may push this even further.
The other fibre that has been in the news had been the NZ Institute’s proposal for how to get fibre rolled out to 75% of premises by 2018. Basically they propose the creation of a dedicated fibe company which will do the last mile fibre to homes, and provide open access to all providers at a regulated price. They estimate this will cost between $4 and $5 billion based on 25,000 kms of fibre duct at $150,000 per km.
They also estimate that $3 to $4 billion of that can be met by private investment and that a Government commitment of $1 billion over ten years ($100 million a year) is needed to reach 75% of the population.
Bernard Hickey supports the plan and says:
The goverment has already posted a budget surplus before accounting gains and losses of $3.649 billion in the seven months to the end of January. That’s an average of $521 million a month.
Meanwhile our productivity growth keeps slowing, as this chart on the left shows. Just imagine if many of us could work from home with much faster connections and we could access overseas markets more easily.
Surely it’s time our government did something useful with that money to invest in the nation’s future. I can think of nothing better than spending $1 billion of public money to build a broadband network that would generate around $4 billion a year in economic benefits. It would pay for itself in extra tax revenues within a year or two. Just imagine if the government had done this three years ago instead of wasting money with its nutty free student loans (bribe).
I’ve yet to fully get to grip with the pros and cons of the NZ Institute proposal, but I think it is an excellent contribution to the debate, and am trying to learn more about it.
Rod Drury has also blogged in support of it:
The FibreCo solution is very logical and I think takes into account the concerns of the many stakeholders around this issue. Some very smart people took the time to really think about this.
I like that it balances private and public sector needs. It builds on what we learned as a country in the 70’s, 80’s and 90’s. It is a savvy financial solution.
I think there is going to be a lot of discussion this year on fibre.
April 8th, 2008 at 10:14 am
So the internet is like the digestive system? Fibre prevents blockages?
April 8th, 2008 at 10:29 am
We need to go one step further… If NZ is to become the vice paradise that DAFT is planning, we need bandwidth, and we need it now. It is no use having carrier pigeons carry pages of 1′s and 0′s across the Pacific and Tasman. We need to do what Telstra claimed to do in their old marketing campaign, and actually physically bring New Zealand closer to other countries. Does anyone have a small boy with super human strength?
April 8th, 2008 at 10:54 am
Why the hell would more than 125000 people need to be using more than 8MBs at once?
Unless the government is going to shut down all other forms of television broadcasting
I am not prepared to pay for more and more capacity than is not necessary.
April 8th, 2008 at 11:10 am
You wont pay more and more. The speed and data caps in NZ are pathetic. Telecom have been raping it for years. We need 100-200gb caps to watch streaming media. Who watches TV anymore? I don’t.
April 8th, 2008 at 11:32 am
Yeah, let’s pick winners again. If private industry thinks there’s a sufficient return on investment, they would build it, wouldn’t they?
They are not building it, so let’s throw taxpayers money at it. There’s enough of that, and if people don’t want to pay, we just hold a gun to their heads.
DPF, maybe you should do a poll at who at this moment is constrained from working at home because he doesn’t have enough bandwidth. Maybe you can find 1 such person. I work from home, I have enough bandwidth (would buy more of course if I could get it).
Is Bernard Hickey prepared to do a bet with me? If this network is build, any productivity boost after that will be negligible, or if there’s a boost he won’t find any economist attributing that to the fibre network but to other factors. $10,000, ready for a real bet Bernard? Or are you not prepared to put your money where your mouth is?
The only people advocating this solution are the people who have something to gain. And it is so easy to advocate something if it isn’t your money.
Blue liberals, urggh.
April 8th, 2008 at 11:59 am
THe last thing we need is another govt monopoly. What has our experience been of such organisations? Does that give us any faith that a new one will be more effective and efficient?
I, like Berend, find it hard to see where there are tens of thousands being denied the opportunity to be more productive by the lack of fibre to home. Nor do I see why I should fund their indulgence either. It surely would be much cheaper for us to fund an office in town for them.
April 8th, 2008 at 1:52 pm
Fibre, fibre, fibre like what you say with that fibre fibre fibre thing farrar,
that what sue kedgley say,
three Moets and there you go ,
farrar going green, he FARRAR weakening not yet Green but support Helengrand
hardly no NAT propositions left or right
April 8th, 2008 at 2:29 pm
Bah. I’ve seen how those productivity studies are done. I recall the one that the Labour party in Aus pushed out just before the election was actually based on a report that I know people who wrote. I had such wonderful things in it such as attributing $10 billion of economic activity to the creation of a $10 billion network link. Of course it creates economic activity, the act of building the damn thing creates economic activity irrespective of anybody using it. I remain completely unconvinced that there is any case at all for government to subsidise this.
April 8th, 2008 at 2:59 pm
“If private industry thinks there’s a sufficient return on investment, they would build it, wouldn’t they?”
True, but sometime there needs to be things built that won’t realise a return on investment to private industry. It’s called infrastructure which is the role of governments to provide.
There would be practically no infrastructure in New Zealand if building it [infrastructure] had been left to private industry. 100 years ago there was no money in building roads and rail in New Zealand. Yet it had to be built for New Zealand to progress as an economic nation.
April 8th, 2008 at 10:37 pm
Yeah, but we actually needed roads. Fibre we don’t need – ADSL 2+ gives more bandwidth than most people need.
April 9th, 2008 at 12:06 am
While I have some sympathy for your arguments Socrates – in fact some of the first railways built in NZ were built by private enterprise and only later purchased by the Crown.
What is being advocated for fibre is a public private partnership – not a new government department as some contributors would have us believe!
April 9th, 2008 at 12:08 am
If you happen to live near the exchange.
ADSL is so unbelievably limiting – I can’t believe people are prepared to settle for it. You’re talking crappy copper vs information travelling at the speed of light!
April 9th, 2008 at 12:17 am
It’s certainly one way to reduce peak hour road congestion if staff can operate from home (it’s a waste of staff time to be stuck in traffic) part of the time. It should happen in wider Auckland and in the other areas where there is the business demand.
And let us not forget that it is a quality of life issue for many skilled workers.
April 9th, 2008 at 1:00 am
dog_eat_dog: how fast do you think data goes down copper? I suspect you’ll find that is also the speed of light. I’d be interested exactly how fast you believe copper can run v’s how fast you think FTTH will run. And exactly whom you think would use the 1Gbps or so that you could potentially get down fibre. I’ll also note that I get 1Gbps on “crappy copper” in my home network.
Bottom line, someone needs to explain what it is that we could do with fibre to the home that we cannot do with ADSL, or with VDSL. I’m in Canberra at the moment, and I get 8Mbps down, 512Kbps up, on my crappy old copper. There isn’t anything that I want to do that can’t be done over that connection. It certainly doesn’t stop me working from home – working from home for me means lots of e-mail and a bit of VOIP. In a pinch some video conferencing.
The argument seems to be “build it because we’ll use it one day in the future – new applications need more bandwidth.” But what we have today meets our needs today, and 5 years ago nobody thought that copper would go as fast as it does today. Maybe those new applications in the future will also be able to be delivered over copper – it seems to get faster about as quickly as we need. Our main bottleneck is actually bandwidth in and out of the country, not the bandwidth to your doorstep. I’m pretty sure that nobody in NZ could afford to run an 8Mbps connection at full speed all the time – that is 3GB per hour (and yes, I did the bits to bytes conversion). If whatever you are working on needs that speed, you’re burning 24GB per 8 hour day, 500GB per 20 day month. I’m not sure what sort of plan you’d be on, but sure as hell that ain’t coming from Telecom.
This is a solution looking for a problem, not a real need. The technology we have can already solve the problems we have.
April 9th, 2008 at 11:51 am
Is Fibre faster than copper?
Actually no.
The speed of a signal of light in fibre is 70% that of light in a vacuum.
The speed of a signal of electricity in copper is 73% that of light in a vacuum.
So copper is faster than fibre.
But I want fibre!
April 10th, 2008 at 8:36 am
Damn – Tux beat me to the actual speed over the medium point;
The advantage of fibre is signal attenuation and interference – nothing to do with speed.
(Although these 2 factors is why 10Gb Ethernet+ requires fibre and the max cable runs in 1Gb is 10m…)
People also frequently don’t realise how inflexible most fibre cables actually are (it’s not that easy to corner with fibre) – and that the cost for a port on a NIC / switch isn’t trivial either!
Having said that there really isn’t much excuse for new developments to be relying on Copper…