Comment: Cable: pipe dream or data cap buster?

The world’s oceans are criss-crossed by dozens of fibre-optic cables that lie sunk alongside the hopes and dreams of many of the investors that laid them.Broadband has brought booming demand for international bandwidth, but making a buck out of that demand is fraught with risk.The cost of laying subsea cables is almost all upfront. Once built, buyers can drive prices down to next to nothing if they can play off operators with excess capacity against one another.That happened in the North Atlantic, which is traversed by more than a dozen cables. Most of the companies that built them went bankrupt and sold them at firesale prices to Indian investors.The US$1.3 billion Southern Cross Cable has been an exception. The “figure of eight” fibre loop, which links New Zealand and Australia to the US via Hawaii, kept its monopoly, is now debt-free and has started to turn a healthy profit for its owners, Telecom, Verizon and Optus. The cable provides a “gold- plated” solution for carrying traffic to and from New Zealand because it runs to the US with just one stop in Hawaii, which minimises latency. It is also fully redundant – meaning traffic can still be carried if any one segment of the loop is accidentally cut.To read the rest of this story in The Dominion Post, see stuff.co.nz/stuff/4479403a28.html.

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