TelstraClear chaos confirms cable need

TelstraClear has had a rightful roasting following a weekend promotion offering unlimited broadband for a short time.

The promotion came as Netflix announced that capped internet services were a blockage to its arrival in New Zealand.

During the "uncapped" weekend, New Zealand went wild, and TelstraClear could not cope, leading broadband speeds to drop to low levels, angering many customers. Some even want compensation for this "disastrous" weekend.

While TelstraClear deserves heat for causing much inconvenience to customers, I feel they are playing a longer game, something that will benefit us all.

What TelstraClear has done is to show that there is a demand for unlimited broadband in New Zealand, that data cap restrictions are a hindrance and that without data caps, then perhaps content providers like Netflix might find a market.

One part of the problem is the lack of links from New Zealand to the rest of the world. New Zealand just has the one Southern Cross cable joining us to the rest of the planet.

Fortunately, extra capacity and competition is on its way. The Southern Cross cable is to be upgraded, and Pacific Fibre has its own US$400 million cable plan linking Australia, New Zealand and the US, a project due in a few years.

Furthermore, China's Huawei recently announced plans to build another US$100 million 2300km cable from New Zealand to Sydney by 2013.

After TelstraClear's weekend disaster, investors in these mammoth projects can take heart that their investments will pay off, and that they should press ahead as quickly as they can.

Let's hope that the carriers work together to tackle the other problems that work with the cable-capacity issue to force low data caps.