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The Southern Cross Cable Network - New Zealand's only international internet link - experienced an "incident" early today which affected some customers, a spokesperson has confirmed.
Today, Labour's communications spokeswoman Clare Curran said she had become aware of a "catastrophic failure" at a Southern Cross landing station in New South Wales during a software change.
Southern Cross' director of sales and marketing Ross Pfeffer said there had been an "incident" on the cable network
"There was an incident in the early hours of the morning during an upgrade situation, which affected a couple of customers for a short period," Pfeffer said.
In a statement, Southern Cross said Labour's media release was "misleading and inaccurate".
."No 'catastrophic failure' has occurred on the Southern Cross Cable. The cable is, a figure of 8 network providing internet services to New Zealand, Australia, Pacific and the US.
"In the early hours of this morning a limited outage affecting 10 per cent of our active capacity occurred during our maintenance window which is a low traffic impacting period.
"The outage occurred at one of our Sydney cable stations, Alexandria, and it lasted from 3.17am - 4.28am, Sydney Time, impacting 4 of our customers," the statement said.
Proponents of a failed Pacific Fibre project, which hoped to build a second internet cable out of the country, argued another pipe was essential to ensure New Zealand remained connected to the world if an outage occurred on Southern Cross.
Curran said the Government - which shot down the idea that public funds should be used to fund a Pacific Fibre-type piece of infrastructure - needed to address New Zealand's issue of international connectivity.
"This shows the Government's inaction and disregard for our international infrastructure could have equally catastrophic consequences for New Zealand. This is a crisis for New Zealand." Curran said.
"Without international connectivity, our financial system and a large percentage of business would be severely affected...Issues of capacity and affordability of data pale into insignificance when you consider the havoc that could be wrecked by a significant outage.
This is a matter of grave importance for New Zealand," she said.