New Zealand’s second internet cable is once again making headlines, this time courtesy of Internet entrepreneur Kim Dotcom.

German born Dotcom has hatched a plan to resurrect Pacific Fibre and build a second fibre cable to the United States.

Dotcom’s project funding plan is two-pronged: first, he will attempt to sue the United States government and some Hollywood studios over the alleged unlawful and political destruction of Megaupload. Second, he will start a new online storage company called Mega.

The New Zealand government is prepared to underwrite an undisclosed amount for the Pacific Fibre project, and Dotcom’s investment would provide Pacific Fibre with the remaining required capital.

In an interview with Fairfax Media, Prime Minister John Key said, “If Dotcom’s investment plan is genuine, then Dotcom would be putting his money where other investors wouldn't.”

Perhaps more kiwis need to be like Dotcom, because he realises that the benefits of the government’s ultrafast broadband network cannot be truly captured with the current external connection limitations.

As Rod Drury, Director of Pacific Fibre, said, “We still cannot see how the government’s investment in UFB makes sense until the price of international bandwidth is greatly reduced.”

A second cable to compete against the Southern Cross cable, costing approximately $400 million, would significantly drive down the price of broadband and double New Zealand's current bandwidth.

From a policy perspective, serious questions must hang over the efficacy of the UFB network without any extra external bandwidth. Creating extra bandwidth is a good idea, as a competing export orientated country it is our international bandwidth that needs to be enhanced, not New Zealand’s internal infrastructure.

So whether or not Dotcom’s proposal is legitimate, and whether or not he will ever be involved in Pacific Fibre (one suspects not), Dotcom makes a good point about the importance of a second cable.

And he is in good company – the Telecommunications Users Association of New Zealand agrees that the proposal would be a huge boost for New Zealand.