After years of waiting, the PIPE PPC-1 fibre-optic link stretching from Sydney via Guam, is going live. In a big win for consumers of some ISPs, a new era of cheaper plans and bigger data allowances may await
Well before the NBN manages to make its presence felt around Australia, another more immediate change to our broadband is taking place this week. Making its official launch on thursday, the Pipe Pacific Cable or PIPE PPC-1 as it's better known, is promising to reduce the costs of transmitting international data traffic, as the tiny and remote Pacific island of Guam is connected to Sydney via Papua New Guinea.
Internode will be among the first ISPs in Australia to utilise the new undersea cable speeds, a move that removes ISP reliance on the traditional and largely more expensive Southern Cross and Australia-Japan cables: major data routes which, up until now, have dominated international data prices in and out of Australia for much of the last decade.
The Pacific Pipe dream
Ever since the Pacific Pipe dream was first announced early last year, there's been plenty of talk of 100MB/s speed plans being delivered to the home. And while the speeds might not be the first thing to change this week, increased data quotas are going to sooth pain of that dollar pinch.
Internode spokesperson John Harris told PC Authority that the move is "mostly about value for customers" and not solely a cost cutting exercise, even though the PPC-1 has the potential to greatly reduce the price paid per megabit for wholesale data.
As part of the cable launch on October 8th, Internode are having a spring clean-up of their broadband plans; the reinvention of Internode plans involves the introduction of 40 new plans, while 50 old plans across their entire range will also be made redundant. Customers using Internode's Easy Broadband plan for example, will get an automatic quota upgrade from 30 GB to 50 GB per, without paying anything extra. And you can thank the PPC-1 for that.
Internode already has a resale agreement with Australia's second largest ISP, Optus. In 2008, Internode entered into an agreement to sell Optus ADSL2+ products over Optus DSLAMS. However, the fate of the Optus agreement is already up in the air today with iTnews reporting that Internode has struck a new wholesale agreement with Telstra.
How all this is affected by the PPC-1 cable coming online is debateable: cheaper wholesale costs are sure to give smaller ISPs like Internode the edge to shop around and get better value in a more competitive market, as options increase.
When reached for comment, an Optus spokesperson told us that "Optus welcomes competition in all sectors of the industry. We consistently review our plans and pricing to offer our customers the best value", they said.
But like Internode, plan prices across the market don't look like they're going down, even as the amount of data per plan is quietly going up throughout the sector.
Harris explained the Internode pricing-plan strategy as a move to limit duplication, likening the old broadband plans to an over bloated restaurant menu that offered far too many main course options than diners cared to choose.
Internode's Managing director Simon Hackett is more than happy to pass on the savings to his customers. "We're passing on the PIPE benefits to customers by increasing download quotas across the board", Hackett said.
Technical advantages: Australia's broadband destiny starts with PIPE
According to Pipe International, the main company that managed the cable roll-out, the 6900km length of the PIPE Pacific Cable will herald significant advantages over existing cable infrastructure through the Pacific. The PPC-1 will have a data capacity of 1.92 terabits a second over two fibre pairs, using 10Gb/s high performance optical equipment.
By comparison, the Southern Cross cable which spans 29,000km of submarine cable across the Pacific ocean floor, can only provide speeds of up to 860Gb/s, up only recently from the meagre 240Gb/s when the cable was first introduced to Australian waters in 2000. That's more than half the data capacity of the Pacific PIPE. The Australia-Japan cable is capable of even less: modified to work at 240Gb/s in 2008, up from 80Gb/s in 2001.
In May earlier this year, Pipe International remained optimistic about reducing prices for Australian ISP customers, calling it a significant milestone that was "set to lower capacity costs by generating increased competition in the Australian market."
PIPE International chairman Bevan Slattery hailed the new cable as sufficient motivation to cut ISP costs throughout Australia, saying that it "...brings Australia one step closer to cheaper bandwidth. The countdown to competition has begun."
And while Internode isn't jumping to cut prices, they're just as keen to improve broadband value. The cost of running an ISP still costs as much, as John Harris explained, but with a high speed international data cable getting things done more efficiently, the game shifts to providing extra data value, rather than reducing the costs of running an ISP.
"It doesn't reduce your helpdesk, your DSLAMS, etc. The real benefit was the extra data for the same price", Harris said.
Michael Malone, Managing director of Australia's third largest ISP, iiNet said that they were already one step ahead of Internode. "We increased quotas on many retail and business plans", Malone told PC Authority.
"iiNet just did a round of upgrades between June and September in anticipation of PPC-1 coming online."
For more information about the cable, check out the excellent iTnews photo gallery for pictures of the official Sydney PIPE connection getting implemented earlier this year.