Chris Barton: Copper and fibre bandwidth gulf is gargantuan

The battle to win $1.8 billion of government money now features in TV advertisements - although I imagine many watching them will be left scratching their heads.

The series of ads with people driving around in service vans talking tech jargon is intriguing : "A million Kiwi homes and businesses are within reach of high speed broadband," says the voiceover. "The boys and girls of Chorus walk the talk all right."

Then there is the one showing straws coming out of kitchen taps and showers: "Imagine if water came from the mains to your house through a straw. Well that's what broadband is like when it doesn't come through fibre all the way to your door."

The back story to the ads is that the Government is poised to hand out $1.5 billion for its ultrafast broadband project and a further $300 million for its rural broadband initiative.

On the one hand Chorus - the network arm of Telecom - is saying everything is going swimmingly. On the other, electricity lines company Vector - a member of the regional fibre group - is saying things are not what they seem.

Which version you buy hinges on how much you understand the difference between copper wires and fibre optic cable, and whether you think the country is overdue for a rewiring job. Vector's water-through-straws ad indicates some of the difference.

But it doesn't do justice to what really happens when communication travels by laser beams of light along filaments of glass instead of by electromagnetic signals along copper telephone wires.

The gargantuan gulf is the difference in capacity or bandwidth.

Chorus may think things are humming along fine. And while it does indeed have a lot of fibre to exchanges, the last link in its network - the bit that connects "a million Kiwi homes and businesses" - is plain old copper.

Today, that delivers broadband as slow as 2 megabits per second (Mbps) and as fast as 16Mbps - a galaxy away from fibre which starts at 100Mbps and could easily feed Kiwi homes at 1 gigabit per second (Gbps).

That's just the beginning. The optics transmission technology that drives fibre follows something akin to Moore's Law of computing, which dictates that every 18 months the number of transistors on a chip doubles.

For fibre it means that every 18 months or so you can upgrade and get double the bandwidth for roughly the same price.

Bandwidth so abundant that we can waste it without a care.

The current record for a single fibre strand is 69.1 terabits (that's trillion bits) per second over 240km.

In this case it was done by splitting 432 bands of light (known as wavelength division multiplexing) each with a capacity of 171Gbps.

Multiply that by multiple strands - today's cables come with 312 strands - and you begin to get the picture. Bandwidth that more or less increases forever.

The idea of unlimited bandwidth transforms not only what's possible, but also economics. Which is the key reason why the Government has stepped up with serious money to rewire the country and change the rules.

It's an investment that acknowledges we have been paying too much for too little for too long.

Today, thanks to lines companies and a number of other players' fledgling fibre networks, new choices in wholesale bandwidth access are beginning to emerge.

In some areas internet providers can now buy a couple of "dark fibre" strands, which they light themselves, for around $600 a month - a link that would readily provide 100Gbps.

Compare that to a telco ratecard price for say 10Mbps ethernet connectivity at $2500 a month and you start to see the quantum of disparity that fibre brings.

Because it has so much potential capacity, fibre economics can always offer more. That's why you can get 100Mbps link to the Wellington or Auckland "peering" exchanges for access to New Zealand-based internet for around $8000 to $10,000 a month, but can also pay the same for a 1Gbps link. For consumers it's the same.

We'll still pay around $100 a month for phone and internet, but we'll be talking about 100Mbps access.

All of which puts Telecom and other telcos in a difficult situation. Start hooking up homes to fibre or selling wholesale bandwidth at more realistic rates and suddenly, when 100Mbps or more becomes the norm, the whole landscape changes.

Inevitably, one day, our ancient copper wires have to be replaced, but you can also see why Telecom is doing everything it can to delay that day.

Hence the ads pretending everything is just fine. And the pressure on the Government to give Chorus the lion's share of its broadband funds.

So far the Government's election promise of substantial investment in the broadband market has produced great results.

New fibre companies are extending their networks all over and some lucky homes are already enjoying the brave new world of 100Mbps. It's a burgeoning competition that is already seeing Telecom upgrade old exchanges whenever a fibre company moves into town.

There's no doubt that if the Government does as it should and partners with fibre companies other than Chorus, more competition will follow as Telecom offers great deals to hang on to its customers.

The big question now is whether the Government can hold its nerve and keep its election promise. Or cave in to Telecom pressure.