Internet entrepreneur Kim Dotcom says New Zealand could become a global data centre hub, creating jobs and lowering broadband prices for all residential users if the Southern Cross Cable had competition.
The cable, which is half owned by Telecom, is the only major internet cable linking New Zealand to the rest of the world
Mega founder Kim Dotcom says New Zealand is losing out on huge opportunities because prices are too high.
He says the only way to change that and get fair pricing to New Zealanders is to reduce the bandwidth cost to a level that allows international companies to come here and store data in New Zealand and provide data to international customers.
Southern Cross Cable is half owned by Telecom and marketing and sales director Ross Pfeffer says even though it's a monopoly, its prices are fair.
He says the Australian prices are applied to the New Zealand market where there is only one cable system, so New Zealand gets the de facto benefits of competition.
Telecommunications Users Association chief executive Paul Brislen says Southern Cross is the only monopoly in the country that isn't regulated, because it's based in the Cayman Islands.
He says the lack of competition is all that prevents New Zealand from becoming a global datacentre hub.
Mr Brislen says in the United States Oregon is a major hub because it's remote, cold which keeps the cost of electricity down because not so much air conditioning is needed and it has cheap land and electricity.
"New Zealand fits all of those markers quite closely - New Zealand really could be a world class provider of content to the world and we're not because we've got a lack of competition on this international leg."
Orcon chief executive Greg McAlister agrees and he questions why the Government is spending $1.5 billion rolling out ultra fast broadband, when the real issue is the restricted connection with the rest of the world.
He says that's why Orcon has signed a letter of intent with Hawaiki Cable Limited which is trying to raise enough funds to build an alternate cable system to Southern Cross Cable.
The Government has pledged $13 million towards the Hawaiki project, which plans to link New Zealand, Australia and the United States, at a cost of around $430 million.