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Envisioning Fibre

Many countries around the world, including New Zealand, Australia and the UK are investing heavily in next generation Fibre networks. It still surprises me when commentators ask ‘what we will do with it?’.

I think it’s our role in the industry to show how Fibre can provide a step change in productivity.

Today I couldn’t make it into our dev center in person so we did a product review over Skype.  It was incredibly effective using Skype to talk and Skype screen sharing. But it was a one to one experience.  Still useful and I was feeling good about it. I saved a plane ticket, heaps of carbon and rather than wasting time traveling home afterwards I went for a mountain bike.

Then I saw this video of startup Zorap (yes all of the good names have been taken) from last weeks Demo conference.  Here is a great example of the sort of applications that get developed when you have access to super fast and cost effective broadband.

While you’re waiting for the video of the presentation to stutter down your broadband connection, Zorap is manipulating multiple video streams, photos and presentations in a very natural experience. This would be fantastic for cross region collaboration. Imagine being able to have meetings online like that. Well in the US, you just expect that to work.

A service like this could not work in New Zealand.  I can see a real risk of a digital divide developing between those in larger countries that can experience these new innovative services and those who continue to work as we have for the last 10 years.

Another great example of how rich communication experiences can get with fibre is this Microsoft concept video.

The education scenario’s are just beautiful. I want my kids to have that.

Fibre will change how we live and work.  Every small business should be able to have phone numbers anywhere, do desk-to-desk high definition video conferencing between partners, customers and advisors.  Attend virtual training and specialty international conferences from your home. Rich product catalogs could be seamlessly swapped.

I hope these video’s show you what is possible. The future looks exciting if we invest in the infrastructure to connect to it.


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Paul Lattimore
29 September 2009 #

It’ll happen. We have the drive from the capital now to make sure it does. Exciting times for NZ.

Stuart Jones
29 September 2009 #

Your skype meeting is an excellent example of saving but it will only work for “busy” people. There is still, in the UK at least, a face-to-face meetings culture.

Yesterday I couldn’t speak to a two person department because they were having a meeting!

Dennis Howlett
29 September 2009 #

@rod: the upside of your broadband paucity (for which I feel your pain – personally!) is that Xero has to be engineered at as low a footprint as possible. That means on fact networks it should run like lightning…provided we don’t have latency issues…

Dennis Howlett
29 September 2009 #

fast…not fact (my ‘n’ my typos – doh!)

Miki Szikszai
29 September 2009 #

I couldn’t agree more – there are *heaps* of basic apps that we use every day at Snapper that we just could not do without decent quality fibre.

We just moved offices last week – basically once we had a fibre connection up and running we were completely up and running with one major exception. We gave Vodafone 6 weeks notice and they still were a week late with switching our landline phones over. We’re looking for a way to ditch landline as we speak.

Everything else was up and running
- Hosted Exchange
- Google Docs
- Beetil (for our configuration management)
- Skype
- JungleDisk for backup
- Quantate (risk management)
and of course Xero.

We pay a premium for fibre to our offices but given how we can flex (we’ve doubled our team from 10 -20 in 6 months) it’s paid for itself easily.

Funniest thing was when our board came in today looking for our IT room. I showed them the fibre termination and a 2TB time machine on our CTO’s desk to cater for the macheads at Snapper…

The key for us now with all of our services requiring decent connectivity is that Vodafone just does not cut it when you’re on the road. Their 3G is fine, there are too many places where its GPRS. forget it. We’ll be looking very closely at XT

Berend de Boer
30 September 2009 #

Having just completed a tour through some major cities in the world, what you describe here wouldn’t work anywhere except with people sitting behind the projector screen connected to a 10GB Ethernet cable.

Sorry Rod, fibre might seem like a good investment if you’re shareholder or on the board of the companies that will, again, getting millions of taxpayer money.

How often can we assume that people are all connected to the infrastructure that supports uploading video at the speed necessary for this demo to work???

I think out there in the real world the infrastructure is getting even more diverse, with people connected through wifi, 3G/3.5G, and less through a physical cable. Bandwidth is always going to be inconsistent.

If you build apps that require this superhigh bandwidth to be available, you’re going to be in for a surprise. If might be available in the places you’re staying Rod, but may I suggest you stay at other places than hotels only millionaires can afford?

Besides, if you look at the actual data, what NZ doesn’t need is more speed, but we need higher data caps, and a high minimal throughput (i.e. not 20KB/s one time, and a minute later 800KB/s).

If you know about CDNs, they are built because it’s in the middle of the network that latencies and slowness occurs, it’s not the last mile.

So again we’re embarking on a huge costly exercise which will profit only the rich at the expense of the taxpayer.

If building fibre was so profitable investors would be ready to poor in their billions, wouldn’t they? But they’re not. Instead they’re gonna force the taxpayer to handover more money once again, making the decisions for them.

Thanks for supporting crony capitalism.

Rod Drury
30 September 2009 #

Hi Berand, thank you for your thoughtful comments.

You miss my point though. You are correct. Building fibre is not profitable. We’ve done a lot of work in New Zealand around the public benefits to a country of fibre and quickly identified substantial benefits that a corporate type of entity can not monetize. For example. Better healthcare outcomes do not drive a return to the fibre provider.

So rather than crony capitalism, Government fibre investments are digital socialism. All taxpayers get the benefit of better education, healthcare and business opportunities that the market can’t provide.

Effectively it’s demand aggregation at the infrastructure level. With the infrastructure in place I hope we see the market work better providing innovative retail services over those fat pipes.

Do you think that is a bad thing?


Dermott Renner
30 September 2009 #

Never heard of crony capitalism, I always thought it was called crony socialism and that after 9 years of this and inaction we were moving again, but whatever.

Just returned from London which has a massive WiFi infrastructure and stayed in what I think is a very expensive hotel by NZ dollar standards, not through choice but because the alternative (the YMCA) does not really suit a business environment.

Berend, you are correct that there are lots of diverse speeds BUT the major pipes that link them all at level 1 and 2 before it trickles down to the diverse end is always fibre.

You cannot beat fibre, fast, zero latency, reliable and expensive (but I think is value for money).

I see Kordia will build a 2nd trans tasman cable by end of 2011. Prices have come down and will continue to.

NZ will never led the world in infrastructure but we have the opportunity to move up the totem pole a little more.

By the way the fatest internet connection I got in London was from the IOD in Pall Mall (flash but not a hotel). It was absolutely warp speed. Not bad from a building 194 years old.

John Younger
1 October 2009 #

Berend – don’t hold back now!!!

Berend de Boer
1 October 2009 #

Rod, my points were that the last mile doesn’t matter for speed. That’s why CDNs are built as close to the customer as possible, i.e. ISP level, not at the beginning of the big trunks. Most of the delays occur in the middle of the network.

Your argument is simple: built the fibre, magic will happen. Let me link to the arguments of the author most successful software product NZ has had: Cheap Broadband Doesn’t Matter:

We’re taking billions of taxpayer money in some misguided attempt that the government knows best, where history has shown it most often is not. Picking winners doesn’t work.

I wouldn’t be surprised if 3.5G or 4G overtakes fibre. Not before the billions are spend though, and certain big businesses have loaded up once again on government bailouts.

Dermott, I used 3.5G in London, and it’s very good over there. Latency is still an issue though, but Skype over 3.5G is perfectly fine. Haven’t tried video though. But besides the argument that people are diverging even more on different network speeds, their devices also will diverge more: i.e. mobile devices have less CPU. They get more, but I’m sure we get even smaller, even less intrusive devices with internet. Expecting people to be connected to a big fat pipe all the time is making a big mistake. Investors are not making such a mistake, that’s why NO ONE wants to build this thing, only if the taxpayers are forced to handover their money.

Rod Drury
1 October 2009 #

Berend, sorry your comment took a while to appear – it was stuck in spam.

I agree that the last mile is less important. My preference in New Zealand is that we spend our valuable money on our international connections because that is our primary bottleneck. If we fix that the market may work. I get the point you’re making. This is my most recent article on the International issue:

International is probably more of an issue for NZ than other countries due to our lack of scale and our remote location.

Regardless of the last mile, I believe we still need to demand aggregate to establish the public benefits.

I don’t get your point of saying that because there is not a commercial business case for broadband that we shouldn’t have it. What about roads, hospitals, schools and other infrastructure? Under my proposal linked above the market funds it, not Govt, but using a debt style instrument so that the pricing model can be cost plus.

Taxpayers do not necessarily need to write out a check to solve broadband. We can use our collective spend to create an environment for innovation. But even if they did I believe that could be a good investment. But I would prioritize international, then the national backbone, business centers and then lastly FTTH.

FTTH is going to be tied up with TV. And that will be a nightmare to negotiate.

With Netbooks and phones where you can easily take video and need to load them into the cloud even normal consumers could use huge amounts of bandwidth. I can’t even back up movies of kids to my local ISP under the current models.

Your turn,


Miki Szikszai
1 October 2009 #


There is no way that 3.5G or 4G will overtake fibre in a network where there is load. Radio networks move the common infrastructure points right out to the customer. You think the fixed networks are inconsistent – well the radio networks are more so because the ‘last wave’ (as opposed to last mile) is shared by everyone in the coverage area.

The link that you point to is interesting yet flawed.
Sure Japan and Korea have not introduced applications that we use in the Western world (not overtly at least) but look at their Internet use and the applications that they have developed

Slides 32 and 33 are instructive.

In the case of Korea, the government made the investment in Fibre and its a massive driver of their economy. Even the Americans are jealous…,9171,1916302-1,00.html

Frankly we are in the position where we have to take a 10 year view on this investment. From my background of being in a Telco the reason they didn’t invest was that their shareholders wanted a return in a much shorter period. Deeply ironic since they were trading on an asset with decades of life.

It’s going to take the government (or a far sighted investor) to realise that billions spent now will fundamentally underpin the NZ economy.

Berend de Boer
2 October 2009 #

Rod, the fact that YOU cannot backup movies of your kids to your local ISPs doesn’t mean the taxpayer should fork over billions.

Governments build roads. These days. Remember how clogged up they are? Perhaps you’re flying in a helicopter these days given Xero’s success :-)

But private companies do not build roads because there’s no businesses case, they do not build roads, because they may not.

On public schools: close to 50% of NZ leaves school functionally illiterate. How many billions are spend here, and basically wasted?

The point I’m making is simply this: resources are scarce. Either government knows best, or we all, individually or companies, know best. History is not in favour of government picking winners.

I’m claiming that NZ would be better off if those billions were left in the hand of people who earned them in the first place. Their collective wisdom vastly outstrips anything the government can come up with. They don’t have the political cloud though, so that’s why they will be forced to part with their money.

On the specifics: a while ago I got some figures from someone actually working at the point where the fibre enters our country. He gets about 400MB/s end to end. On Amazon’s EC2 infrastructure I can move stuff at about 25MB/s. We’re getting perhaps 1MB/s from the US to here. No fibre will change any of these figures.

The proposals are fluid, as I understand it you won’t be getting fibre to the home, so no backing up movies from your kids. And what did Amazon introduce a while ago? You can ship data by SNAIL mail to them, and they will upload it. Just shipping a 1TB disk is still the fastest way to ship large volumes.

Getting more fibre from NZ to other places might be nice, but are we already using our current fibre to full capacity? I believe we don’t, and if we add more fibre, how does that help?

Look, due to latency no one is ever going to host here. Why not host in the US, location doesn’t matter right?

And supposedly a person working here has trouble communicating with the US?? You didn’t back up that statement, and given that I happen to work with US companies, I’m not quite sure how you can back up that statement. Really, Skype conference calls with people all over the world work reasonably well. Yes, could be better. Will fibre help here? I doubt it.

I really don’t see the argument to force people to handover their money. If you want to do it all private, fine. But what would NZ be if those billions were invested by tens of thousands of smart people, instead of by 1 big government?

Your only argument is: put fibre into the ground, magic will happen.

I’m predicting it will be like building canals at the end of the 19th century.

Definition of success is so ill-defined that anything can be claimed as a success (just like the forced unbundling of Telecom).

I hate it just as much when a government tells me how to raise my children as when they tell me how to spend my money.

Rod Drury
2 October 2009 #

Hi Berand, Too much energy to go point by point against you. I don’t follow your logic or understand your assertions. I’m out.

6 October 2009 #

of importance is the Fibre Network design and interoperability. IN Aust they are talking of a layer 1 & 2 offering – so others have to provide the other 5 layers. sort of makes the whole separation / new network opportunity academic.

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