Pacific Fibre set to 'flip model around'

Pacific Fibre may charge internet providers a fee per customer to use its proposed international communications cable, rather than charging for a set amount of bandwidth, to encourage them to offer generous or unlimited data caps to broadband users.

The company aims to lay a cable between New Zealand, the United States and Australia in 2013 in conjunction with Asian partner Pacnet, at an expected cost of US$400 million.

Co-founder Rod Drury said carriers had to guess how much capacity they might need on the existing Southern Cross Cable. Pacific Fibre's approach would be to avoid a situation where consumers faced restrictive data caps while most of the bandwidth available on subsea cables went unsold.

"We don't want to be `Southern Cross minus 5 per cent'. Why don't we flip the model around and go to a per-person charging model and then try to give internet providers as much bandwidth as we possibly can for that?" The charges could be segmented by customer type. "You could do it for mobile connections, home connections, schools, hospitals and businesses, and set a reasonable price."

Telecommunications Users Association chief executive Ernie Newman welcomed the approach. "The way the world is moving is towards all-you-can-eat-type plans and any move like that has got to be the way of the future."

Southern Cross marketing director Ross Pfeffer said it was not clear what the approach would achieve. Restrictive data caps were not being imposed because of the cost or availability of international bandwidth, he said. Instead, New Zealand internet providers were using data caps to segment the retail market and maximise their own revenues.

- © Fairfax NZ News