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Internet Party promises 50% cheaper broadband

UPDATE: Internet Party CEO Vikram Kumar says the Internet Party signed up 500 paying members - as required for registration with the Electoral Commission - within seven hours.

People have signed up by purchasing the party's $1.29 iPhone app. Party CEO Vikram Kumar tells NBR that reports of a $2 million budget are accurate and that most of the money "Will come from Kim's family trust. All other sources are comparatively insignificant."

Meanwhile, Kim Dotcom has defended a new photo of him that emerged today, showing him wearing a Nazi helmet at the Gumball Rally in Europe in 2004.

Dotcom told 3News, "A guy from Britain in a Porsche had this helmet on. He came to me and asked me, 'Hey, do you want to put it on?  I want to take a photo.' I put it on, he took a photo, [and] put it on the Gumball website. It was a two-minute affair, it's not my helmet."

EARLIER: The Internet Party has launched its website today, which includes some broad policy goals. It says details will follow in its yet to be released manifesto.

The party has also kicked off its drive to sign the 500 paying members required for registration with the Electoral Commission. That shouldn't prove too difficult at $1.29 a pop (the price of the party's iPhone app is also the price of a three-year membership).

No candidates have been named yet. The maybe/maybe not ally with Mana talks continue. Dotcom today decided to ruleout any relationshiip with National - whom he says is behind the stories about him owning a copy of Hitler's hate manifesto Mein Kampf, signed by the author. His refusal to rule out working National was apparently a roadblock in talks with Mana.

The first "action agenda" item listed on the website is 50% cheaper internet - and unlimited and universal, to boot.

I agree with the Internet Party's stance that broadband at half the price would be "awesome."

However, it's not clear how we get to this state of awesomeness. 

The party doesn't price any of its policies, say how they would be achieved or offer any other details. We'll have to wait for the manifesto for that. 

The 50% internet policy is actually the most fleshed out - if three sentences can be called fleshed out - with the line that  "We will take direct action to expand New Zealand’s infrastructure by building a second submarine cable."

I'd like to see a second cable, too. I find it curious National has been quite willing to out-Labour Labour by sending $1.5 billion on the UFB and related projects, but offer only a paltry $15 million to assist a submarine cable startup (Pacific Fibre and others have estimated it will cost around $400 million to challenge the 50% Telecom-owned Southern Cross Cable's monopoly on our broadband connection to the outside world).

I don't think a second cable would make broadband 50% cheaper. In fact, I'd be surprised if it yielded savings of 10% or 5% or anything, based on what ISPs tell me (Orcon boss Greg McAlister recently said a $75 monthly connection includes about $7 in international bandwidth charges). But I would expect much bigger data caps or unlimited data to become standard for home and business users, as is the case in most countries. That would be a big deal in an age where everything from home entertainment to everyday business computing is moving to the cloud.

I look forward to a party - any party - putting forward a coherent plan for a public-private cable, or any detailed plan for how a second cable could be built. Looks like I'll have to wait a while longer.*

Other Internet Party policies trace a similar path. Reform copyright law, upskill people for the IT age, reign in surveillance.

Admirable goals, but there there's zero detail behind the headline goals.  Politics as usual then.

I'm not so sure about the Internet Party's idea for a digital currency. Mega's murky back-door NZX listing doesn't really inspire confidence in Dotcom having a hand in public finance.

Mein Kampf - an elegant solution
Party founder Kim Dotcom has copped some flak after the revelation he owns a copy of Hitler's Mein Kampf.

A copy of the book, signed by its author, is an item of genuine historical interest. But if you're going to buy it, donate it to a museum or similar.

For Dotcom to tell TV3 he bought it because of its interest in a video game (Call of Duty), and for its investment potential, is spectacularly gormless.

But if the Internet Party founder did buy it as an investment, then why not sell it and use the proceeds to pay off the 80 or so NZ contractors he owes upwards of $500,000? (And that's among other unpaid bills; see tomorrow's print edition of NBR for more).

$2 million from 'Kim's family trust'
And on a related note, NBR asked Internet Party CEO Vikram Kumar how much would be spent on the party's launch.

"There isn't a firm total budget yet but media reports of $2 million are in the right ballpark," he replied.

Where is the $2 million coming from?

"It will come from Kim's family trust. All other sources are comparatively insignificant. For example, the membership fee is $1.29 for three years years," Mr Kumar said.

Asked where Dotcom's family trust sat amid attempts by NZ and US courts to freeze all his assets (bar a legal fee and living allowance), Mr Kumar replied, "That's a question you've got to ask Kim unfortunately. My view is limited to knowing that it is Kim's family trust is the source of funding for the Internet Party." NBR phoned and emailed Dotcom to ask about his family trust. He did not reply, although his colleague Finn Batato acknowledged NBR's query.

Given Dotcom has north of $2 million kicking around in a family trust, why not use a dollop of it to pay the half million owed to Kiwi contractors who've done work for Dotcom, or around his rented mansion and its sprawling grounds?

Legal, but not right
Dotcom touched on issues around this point when he was interviewed by TV3 last night.

Brook Sabin asked him if it was a bit on the nose for Dotcom to be helicoptering around the country, and posing at Huka Lodge, when he owes so much money to contractors (and, he could of added, stands accused of under-paying some staff).

"You need to understand something here," Dotcom replied to TV3 reporter.

"The legal entity that owes creditors money is a company**, not me personally. Legally I have no obligation to pay anybody. I have a moral obligation and I take that seriously because these are hard working kiwis who did their job and I want to pay them."

With at least $2 million in his family trust, by Kumar's account, what's stopping him? Why has he kept them waiting for so long as he lavishly funds projects like his heavily marketed album?

As Dotcom notes, legally he's on side.

Politically, and ethically, it looks suspect.

Backing away from self-destruct pledge
Lastly, Dotcom now seems to be backing down from his public pledge - recently affirmed to NBR by Kumar - that the Internet Party will "self-destruct" and throw its weight behind a party that adopts its policies if it fails to reach the 5% MMP threshold by the time ballots papers are printed (approximately six weeks before the September 20 election).

"Well here's the thing. If we have an electorate, it's not really necessary," Mr Dotcom said - referring to ongoing negotiations with Mana's sole MP, Hone Harawira. 

Dotcom said the Internet Party could come together in a policy alliance rather than a formal merger. As ever with Dotcom, it's a moving feast.

I don't think Harawira will be put off by the Nazi paraphernalia controversy, Dotcom roping in someone facing 25 market manipulation charges for Mega's backdoor NZX listing, or assorted other mini scandals. He thrives on a bit of media heat and perceived persecution. Yet it's also hard to see two men with egos the size of Dotcom and Harawira agreeing on anything - let alone who should steer the ship - for long. 

ckeall@nbr.co.nz


* Meantime, Telecom, Telstra and Vodafone have teamed on the fully-funded, $US60 million Tasman Global Access cable, which will provide the second major link between Auckland and Sydney. Telstra and Vodafone's decision's to back the cable is interesting in light of Southern Cross Cable's claim that it provides all the bandwidth capacity we need for our UFB future, and at keen pricing across Australasia. 

**  RSV Holdings, of which Kim Dotcom is the sole shareholder

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Comments and questions
16

He is only legally safe from the company debts IF the company was operated appropriately. Why did he have a company organising and paying bills for a rented property for him to live in personally?

Yeah but none of the creditors have acted. They could liquidate the company but they prefer kim's promises rather than exercise their legal rights.

Not pricing policies? No different than Labour/Greens. Just throw it out there and worry about the important details, cost, much later.

After all we want to be elected and the NZ public is dumb they will just pay more tax after we are elected to fund all and any scheme we come up with.

So your argument is that two wrongs make a right?

I'd like to see all parties release detailed policies, and price them.

Releasing vague, feel-good statements is just politics as usual.

Cant wait to sign up to the" 41CENT PARTY".A bargain over three years.

New party, a great idea and will hopefully bring some interest/debate to the world of politics. Not sure about some of the ideas..
Funny, though when one looks at history and Stalin, maybe people should be bleating about the Russian part of Kimmys collection.

It is a good initiative yes. There are many places in Australia that are way behind this type of idea, even in the regional zones. The UK is getting it right by having a high level of broadband competition to make it cheaper and installing fibre optic cables everywhere to offer the fastest speeds. Though If Kim's using Russian oil money then she best get her wellies on because Russia is running out of cheap oil!

Hi Chris,

Just on your point about international cable connectivity -

The TGA cable would increases resilience between NZ-Aus. If you look at our international cable configurations, we have redundancy if there is an issue between NZ-Hawaii and Hawaii-USA, but not between NZ-Aus.

If there was a break between NZ-Aus, we'd have to route traffic to/from NZ through Hawaii, creating latency issues on the kinds of traffic that flows across that link. A break between NZ-US isn’t as bad because we can route through Australia.

Further, the TGA cable reflects the growing importance of trans-Tasman internet traffic: for example, around 40 percent of both Telecom and Vodafone's current international internet traffic is now Australia to New Zealand, versus just 10 percent in 2000. We expect that trend to continue.

The SX cable can certainly meet NZ growth in demand on the NZ-US route for the foreseeable future (as it only utilises 15 percent of its current capacity and with capability enhancements can meet the growth in New Zealand’s demand for data for at least a decade). The typical unit pricing for international connectivity has dropped 98.5 percent since the Southern Cross Cable (SX) launched in 1997, and prices on the SX cable have reduced by between 20-30 percent year-on-year.

SX establishes New Zealand market prices by benchmarking against the extremely competitive Australian and Hawaiian markets (5 links to the US), and then applying those prices to the New Zealand market (meaning New Zealand is price competitive with the competition heavy AUS-US route).

TGA is about providing additional resilience and meet growth on the NZ-Aus (and further to Asia) route.

Hope this helps.

Regards,

Conor Roberts
Telecom Head of Public Affairs

Thanks for that perspective, Conor.

Personally I find it disappointing to learn the Southern Cross Cable is using only 15% of its capacity at a time when broadband customers have to watch their data caps.

That suggests two cable players would be better for consumers than one.

In terms of the new Transtasman cable, one question that remains open is how will Telecom and its partners offer other ISPs access, and on what terms.

Any update on that one is welcome.

who's watching data caps?
Plenty of options out there for people who don't want to watch data caps.

Orcon
Slingshot
Bigpipe

All ISPs who have no data cap and open for business.

Yes, good to see - but in most countries unlimited data is standard, with people who pay more getting a faster connection.

Here, people have to pay a premium for an unlimited account, and we keep seeing ISPs launching unlimited plans only to run afoul of the Commerce Commission or ASA with fine print over usage, or shaping.

Actually, in most countries they are reverting back to caps now...albet large ones...

And every ISP is shapping - globally

And don't forget - NZ is a pimple on the backside of nowwhere when it comes to cable systems- that 15% utilisation is 13% australian traffic... you know the australians, the ones who pay for our cable system...
But don't let facts get in the way of a good whinge.

By most countries you mean some US ISP's right? The rest of the world outside of Comcast and AT&T is still unlimited or heading towards it.

But don't let facts get in the way of a good whinge.

So that would make the $7 cheaper... woohoo.

KDC's inflated ego is getting so big that soon you will be able to tie a piece of string to his feet and hand him to a child like a helium balloon.

Anyone got a pin?