When your nation is an island in the South Pacific, the logistics of international communications are as complicated as they are critical to living and conducting business. First off, let me dispel a myth: we’re not connected by satellite, we’re connected by a cable. While high speed satellite communications are in the works for places like Tonga and Vanuatu, it is still faster to handle the internet traffic of four million New Zealanders and 2.5 million visitors by undersea cable. New Zealand’s primary connection is a submarine cable system called The Southern Cross Network. It’s not actually one cable, but a loop of cables that goes through Australia, Fiji, Hawaii, Oregon, and back to Australia via California, Hawaii and New Zealand. The theory is that if one segment of the network goes down, due to an earthquake, storm or some other incident, traffic can be routed the other way around. Physically, submarine cable is smaller in diameter than your average coffee cup, but building and financing thousands of miles cable laying across the open ocean is the work of governments and Tier 1 ISPs, so it’s important to keep their investment in mind when you consider how this connection scheme effects retail pricing of internet connectivity for the end user.
Historically, government owned Telecom New Zealand has been the only player in New Zealand telecommunications. In 1990 Telecom was privatized and a sizable portion was bought by overseas investors, notably Ameritech (now known as AT&T) and Bell Atlantic (now known as Verizon). The privatization also allowed for the entrance of another player into the New Zealand telecommunications market, namely national and foreign-backed New Zealand upstart Clear Communications, which was subsequently merged into Australian firm Telstra, and is now known in New Zealand as TelstraClear. Skip ahead twenty years and a lot of regulatory changes and you’ll find that most people in New Zealand are still connected one way or another through Telecom, though often through a reseller of some sort. Still, the market is opening up with the advent of high-speed wireless communications and expansion of cable TV networks. For many people, wireless 3G service is sufficient for their browsing needs, and is their only internet connection. In some areas, TelstraClear is expanding cable television service, and offering broadband over that system.
While the market is less more open than it was pre-1990, there remains a premium on international traffic which must travel through the Southern Cross link. As such, some retail pricing schemes in New Zealand charge a different rate for international traffic. This is of particular importance to those of us who work in the web design and development space, as it is advantageous to put websites targeted at New Zealanders on networks on the New Zealand side of the Southern Cross, as I don’t want my user be charged extra to access my site. This illustrates a minor glitch in the freedom of the NZ internet market, as users aren’t generally aware of where their data is coming from. While a .nz domain name is a solid indicator that a website is targeted at NZ users, it does not mean that the site is hosted in New Zealand.
To determine that, you’d need to use a plugin such as FlagFox or do a trace route on a site to determine it’s physical location. While it’s a great idea for anyone on such a broadband plan to do so, I don’t see the practice becoming widespread, especially since a website can be created from multiple hosts, or change hosts, or have mirrors around the world, which might back each other up as usage changes. Since ISPs aren’t able to reliably encourage national data use like you might be able to with telephone service, many providers simply charge a monthly fee for broadband including all traffic national and international, limited by total traffic. Right now there are no unlimited (uncapped) broadband packages on offer. A typical internet pack might offer 40GB per month on a full speed ADSL2+ connection for $60 per month. Other plans may have you paying for each megabyte, with varying rates for overseas traffic. The University of Canterbury, for example, has a rate scheme that varies depending on the time of day and whether you’re accessing national or international data.
Those of us from North America might find the lack of an unlimited internet plan and universities that charge students to use the internet in the library as rather shocking, but a Kiwi traveling in the United States or Canada might be equally surprised to learn that free wifi is ubiquitous in most cities. Some New Zealand coffee shops offer scratch-off cards with a passcode for an hour of free internet, while their North American counterparts often leave their wifi running day and night, freely available to anyone in range of the access point.
What this means for the immigrant is that internet service is going to cost more in New Zealand than you’re used to back home. For the tourist it means that you’ll be paying extra for internet in your hotel room, or plugging coins into a machine at an internet cafe. You also may want to check if your mobile device is unlocked, or can be unlocked, so you can use it on a prepay data plan during your visit. For the webmaster it means you’ll have to think about where you choose host sites and the location of your audience, so that they may access your site as cheaply as possible. To the web designer it means that it’s probably a good idea for your website to be serving a mobile version of your website branded to match the standard site, as more people are getting information about your business through smart phones and similar devices since using your notebook by roaming onto public wifi may cost more per month than a getting a data plan for your phone.
Essentially, bandwidth in North America is like tap water; it’s so cheap, it’s not worth the effort of charging for it – in New Zealand, that is definitely not the case.