Dotcom pledges to resurrect international cable project
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Kim Dotcom has announced his intention to invest in a second internet cable connecting New Zealand to the world.
Dotcom told Computerworld that the move isn't out of charity towards New Zealanders who are currently reliant one international cable link to the rest of the world - Southern Cross Cable, which is majority owned by Telecom. He says his new business ventures need a second cable in order to service potentially millions of customers around the world.
In the past two weeks Dotcom has been testing two new cloud products called Me.ga, a cloud locker service similar to the one shut down early the year by the US government, and Megabox, a music service.
To support the "new Mega", Dotcom is establishing a business out of New Zealand, which will include a datacentre to host Me.ga, and he says it could be an example for others to use New Zealand as a base for cloud services.
Dotcom is a New Zealand resident, living in Auckland's North Shore. He says he wants to set up Me.ga in New Zealand because of its relatively cheap and clean power supply.
"You have clean and cheap energy here. Power is becoming the biggest cost factor for datacentres around the world. With its own cable, cheap power, and connectivity New Zealand could attract foreign internet businesses," says Dotcom.
"The new Mega based in New Zealand might be what's needed to make this thing happen."
The two new services alone will requre connection speeds of over two terabits within two years.
Dotcom suggests resurrecting the failed Pacific Fibre submarine internet cable project, which fell short of its $400 million target earlier this year.
Dotcom says he was a supporter of the cable project, which would have connected New Zealand to Australia and the US. Two years ago Dotcom met with Mark Rushworth, co-founder and Pacific Fibre CEO, to discuss funding the cable and flew in the chief executive of Cogent Communications to discuss potential parnerships in the venture.
"I was always of the opinion that Pacific Fibre was the most important investment into the future of New Zealand to ensure its competitiveness in the online world,"says Dotcom.
"Unfortunately the government wants to invest more into Tarmac roads,"says Dotcom.
"In 10 to 15 years most people will work and shop from home. You don't need Tarmac, you need fibre."
When Pacific Fibre wound up, chair Rod Drury cited a lack of investment was the deciding factor in the project's failure.
Dotcom says he would raise investment domestically with backbone providers and through his Mega business, which would be the biggest customer on the cable.
If there is a shortfall, Dotcom says "Plan b" is to sue the US government for shutting down Megaupload an use any money recouped from civil proceedings to fund the cable.
Once the cable is live, Dotcom says New Zealand ISPs would be provided with free access to overseas connections for residential customers. Government and business connections would be charged for.
He expects this to reduce prices across the market for broadband data.
Pacific Fibre responds
Mark Rushworth says he wishes Dotcom all the best with the project. "It will be good for New Zealand if he gets it away."
He says the meeting with Dotcom and Cogent Communications two years ago took place over a "lovely lunch" at Dotcom's house. However a deal with Cogent didn't eventuate because most of that company's traffic is within the US and it isn't a big user of bandwidth in this part of the world.
Rushworth was unaware of Dotcom's new plans but he is open to "a swim at Kim's" (a reference to a pool party that Dotcom held for high profile tech commentator Ben Gracewood and friends earlier this year) to find out more.
When asked if he thought it would be difficult for a cable project backed by Dotcom to get consent to land the cable in the US because he is facing extradition, Rushworth ageed that it probably would.
Rushworth says he hasn't done any work on Pacific Fibre for the past two months, "other than to lie there and think how else can this be done?"
Pacific Fibre co-founder Sam Morgan has tweeted about Dotcom's plans. "Dear Journalists: I've not yet talked to Dotcom, but wish him all the best if he is going to do a cable. Not easy, but important for NZ."
Strong case for second cable
TUANZ CEO Paul Brislen says the case for a second internet cable is strong, but the failure of Pacific Fibre in the past will weigh on the minds of potential investors. He says Dotcom's influence might play a crucial role in any new venture.
"He's a strange character, but his contacts might be just what is needed for a second cable. If anyone could do it, it is him," says Brislen.
Brislen says getting a licence to land a cable in the US will be difficult considering Dotcom is currently facing extradition to the US on copyright charges. Dotcom's chances lie with Pacific Fibre and its consents and previous ventures.
Brislen says this could be a defining moment for the New Zealand technology scene in showing it is capable of supporting a cloud business the potential size of Me.ga.
According to Brislen the Southern Cross Cable has spare capacity to support Dotcom's new business. In October Southern Cross said it has a capacity of two terabits and is capable of expanding to 7 terabits. Brislen says it has the cash to expand its capacity further if needed.
In a conversation Brislen had with a Google executive recently he was told the deciding factors for building a Google datacentre in a country are its power supply, liveability for Google engineers, the number of IT graduates available and international connectivity.
Vodafone and REANNZ had contracts with Pacific Fibre to fund the cable, with REANNZ committing to $91 million before the venture wound up. Computerworld is seeking comment from the two organisations as to whether they would take up the commitments once again.
Posted by Anonymous at 8:33:58 on November 5, 2012
Posted by no to socialism at 15:57:10 on November 5, 2012
Who said this was gonna be "Shock and Awe" ....
Kim.Bomb is turning out to be a problem.
Hey Joe, What say we invade little ol' NZ and stop that problem.!!
Posted by Movie Mogul at 23:48:32 on November 4, 2012
I think you in NZ are lucky to have him either way. He is a PR-aware person who is trying to drag NZ, and the world, kicking and screaming out of the 20th century and into the 21st. "More money for tarmac than for broadband", indeed. That sums it up very nicely.
This fellow aroused the ire of that quintessentially 20th century industry, the recorded music establishment (a striking parallel with Edison's effect on the sheet music business!) and had whole national governments hounding him in a way reminiscent of the Spanish Inquisition. Logic has nothing to do with the response, just plain, establish power - the kind of power that corrupts. The system will do whatever it must to defend itself, including recruiting the full force of governments.
The world needs people like Dotcom. You don't have to like him, or require that his motives be 100% noble. Like Julian Assange (who is also hounded by the US and shamefully let down by his government), he represents the a future with new values, new freedoms and new business models.
Posted by DavidSG at 20:23:30 on November 4, 2012
Ideally all ISP's would be able to provide better services without data caps for an affordable fixed monthly price and or bundle with other services and hide the connection cost in that service.
Bandwidth is relatively cheap now, you can do quite a bit with Adsl2 but business do need better upload for business Voip services , there a already world class datacentres in NZ ,why not partner with them?
Posted by Ben @ talkmorenz.com at 20:16:34 on November 4, 2012
Posted by M at 20:02:40 on November 5, 2012
Posted by barney mckinley at 19:20:37 on November 4, 2012
Posted by Anonymous at 19:07:27 on November 4, 2012
Posted by arniebhoy at 10:25:14 on November 7, 2012
Posted by barney at 19:23:25 on November 4, 2012