Southern Cross cable has reportedly been hit by a "catastrophic failure" at its Alexandria landing station in Sydney.
New Zealand Labour IT spokesperson Clare Curran said today that the outage occurred this morning due to an "unauthorised and un-notified software change" made to the wavelength switching platform.
One industry representative on the Australian Network Operators group indicated that Southern Cross had told vendors that the company was still suffering from a software upgrade issue this afternoon.
Southern Cross had not returned calls at the time of writing.
The outage is understood to be affecting Australian telecommunications and datacentre provider Vocus.
Curran said that partial services had been restored, but said that it highlighted the need for the New Zealand government to roll out a second cable out of the country.
"This is a crisis for New Zealand. Without international connectivity, our financial system and a large percentage of business would be severely affected," she said. "The government must address the issue of international connectivity with urgency, and provide a full assessment of the risks New Zealand faces through software failures and natural events on the single cable."
Earlier this week, Megaupload founder Kim Dotcom proposed reviving the defunct Pacific Fibre subsea cable proposal, using funds from his new file-sharing website Mega. The plan has hit a few road bumps, however, because the Gabon government is looking to stop him using a .ga domain, and the cable would require the approval of the US government to land in the United States.
US authorities are unlikely to welcome any proposal from Dotcom while he is due to front extradition hearings in March next year. He will face charges of racketeering, copyright infringement, and money laundering in the United States, where he could face up to 20 years in jail.