National broadband leader Internode has signed up as a foundation customer for PIPE Networks’ planned $200M Pacific cable, which will significantly slash the cost of downloading international data.

PIPE Networks, which owns and operates Australia's largest Internet exchange, has announced it will construct a 6900km undersea cable system linking Sydney to the communications hub of Guam, with a spur connecting Madang, Papua New Guinea.

Referred to as PPC-1, the cable will deliver a big boost to Australia’s international broadband capacity. The main trunk of the PPC-1 system will be a two-pair fibre cable capable of delivering 1.92 terabits of data per second. It is expected to go live in the second quarter of 2009.

Internode managing director Simon Hackett said the cable would allow Internode to deliver even more value to its customers. “When it’s deployed, we believe it will allow us to significantly raise download quotas for a given monthly spend,” he said.

“The PIPE PPC-1 cable will increase the competitive tension in the Asia-Pacific bandwidth market and generate better value-for-money for customers of the cable system such as Internode.

“Today the major single cost in the path from the US to your living room is international circuit capacity. PPC-1 will result in the international bang-for-buck improving sufficiently that it will no longer be the most expensive cost component inherent in a customer downloading a gigabyte: Instead, that 'honour' will pass to Telstra, whose monopoly access fees have remained essentially unchanged for some years, and show no signs of reducing.”

Internode is one of the largest Internet access companies in Australia. Its national broadband network utilises two companies, Southern Cross Cable Network (SCCN) and the Australian Japan Cable (AJC), to provide it with fully redundant, high capacity network paths to the US. Internode already has about six gigabits per second of international circuit capacity to the US through SCCN and AJC.

Mr. Hackett said Internode expected that PIPE’s PPC-1 cable would routinely handle as much as 40 per cent of its total traffic requirements. “Because Internode is already a major customer of both SCCN and AJC, adding PIPE’s planned cable will substantially boost our reliability,” he said.

“PPC-1 will increase the number of independent geographical data routes that we use out of Australia to four: PPC-1, AJC, and the two geographically independent halves of SCCN. As a result, the failure of any one of those geographic routes will lower our peak traffic handling capacity by just 25 per cent – minimising the impact of a cable cut for most customers, if they notice it at all.

“For Internode, the more cable systems, the better: Internode manages its own supply chain all the way to the USA, so we optimise traffic over our geographically disparate international circuits for the benefit of our customers.

“In addition, PPC-1 will substantially increase the 'competitive tension' in the Australia-international data capacity market, ensuring that all players from whom Internode acquires circuits will keep their price/performance improving into the future.