CityLink spreads internet delight

CityLink has spent more than $10 million building its Wellington broadband network, managing director Neil de Wit says. Picture / Mark Mitchell

While most of the country fumes over sluggish, expensive internet connections, there is one pocket of New Zealand where you don't hear any complaints.

For businesses in central Wellington, access to super-fast broadband is taken for granted and has been for years thanks to the quiet growth of fibre network provider CityLink.

"It's just a no-brainer these days," says InternetNZ president Colin Jackson of Wellington CBD businesses' attitude to using the CityLink service. "It costs you a few grand for a router and about $150 a month. For that you get [a connection speed of] 100 megabits per second. There's none of this metered bandwidth or anything."

CityLink's network, which grew out of a Wellington City Council initiative, has been spreading fibre optic cable through city streets, between buildings and over tram lines since the late 1980s.

"What we've essentially done with our fibre is turn the whole CBD into a big network like a university campus," says CityLink managing director Neil de Wit.

"It's the same technology, same concepts as what a big enterprise would do with its internal LANs (local area networks). All we've done is turn it around and said we'll make this a public LAN."

De Wit says CityLink has spent more than $10 million building its Wellington network over the past 10 years.

The city council, one of 16 founding shareholders, left the business four years ago, and it is now majority owned by Lower Hutt entrepreneur Ron Woodrow.

InternetNZ executive director Keith Davidson said the low-key but steady growth of the network meant that huge amounts of data were flowing between city businesses by the mid-1990s when the rest of the country was reliant on cumbersome and costly ISDN connections.

"[Wellington] businesses were taking it for granted at a time when the rest of New Zealand was still very much captured by the sole telco provider at horrendously expensive rates and very poor-quality infrastructure," Davidson says.

He and Jackson say whole industries, reliant on being able to move huge amounts of data, have flourished in the city as a result.

Why don't Auckland or other centres have a CityLink network equivalent? Wellington had a couple of factors working in its favour: the high density of data intensive operations in the CBD, particularly Government departments, meant there was early demand for the service.

De Wit says CityLink, which employs 29 staff, has kept its capital costs down by adding to its network only as customers have signed up.

"That strategy's served us well over the years because most of the Wellington network was built on customer demand. Gone are the days of classical 'rollout and they'll come' type scenarios. These have to be quantified, qualified type initiatives."

A second factor in Wellington's favour is that it is rare in having an overhead cable network, which avoids the expense of extending a network underground. Burying cables can account for more than 90 per cent of the cost of extending a fibre network, Davidson says.

But the good news for Auckland is that its CBD already has a mini version of CityLink. The company owns the Auckland Peering Exchange and since 2001 has been laying fibre cables around the CBD, but only in response to client demand. It has about 60 Auckland clients compared with more than 600 in Wellington.

Vector Communications, a subsidiary of electricity and gas company Vector, also has a fibre network in the Auckland CBD.

"You've got the start" of a Wellington-style CityLink network in Auckland, Davidson says.

"There is some drive in the marketplace to get these alternative networks up, but it's a pity we didn't see a lot more activity 10 years ago. I don't think a lot of the issues we confront today would exist if we had urban networks in New Zealand that were truly as robust and useful as CityLink."

This month the Government announced two contestable funds of up to $40 million - the Broadband Challenge and the Community Partnership Fund - as part of its Digital Strategy.

The $24 million Broadband Challenge fund will provide seed funding for the development of broadband networks in urban and regional centres.

Davidson said the fund was a positive step.

"There is actual encouragement with some real money behind it to further explore [alternative] networks."

Jackson agrees, but adds the Digital Strategy did not address the most significant issue.

"The problem the Government does have is dealing with our shocking uptake, dealing with our appalling pricing and dealing with the quality issues like artificial restrictions to 128 kilobit per second upstream bandwidth. Government needs to find a way to address those problems."