Tag Archives: internet cables

The Power of Cables with an Ocean View

submarine communications cable. Image from wikipedia

Access to ultra-fast internet cables in London is likely to make financial firms reluctant to move out of London even after Britain leaves the European Union, a study by the European Central Bank has found.

But an ECB study found that any withdrawal from London would likely be gradual as firms would be loath to give up on Britain’s fibre-optic cables, crucial for ultra-fast electronic trading.

“The UK’s advantage as a hub for trading using fibre-optic cables, combined with institutional inertia, suggest that any relocation of trading after Brexit, if at all, would likely be gradual,” the ECB said in its study.  Around 84 percent of transactions in euro are initiated outside the euro area, with Britain taking the lion’s share at 43 percent, according to a survey by the Bank for International Settlement cited in the ECB study.

“Technology has economically important implications for the distribution of foreign exchange transactions across financial centres, as a result,” the ECB said.   “Undersea fibre-optic cables provide a competitive advantage to financial centres located near oceans, like Singapore, because they are directly connected to the internet backbone, at the expense of landlocked cities like Zurich,” it added.

Excerpts from Fast Internet Likely to Keep Trading in London After Brexit: ECB, Reuters, July 5, 2017.

Who is Team Telecom: internet cables and US security

A real-estate magnate is financing Google’s and Facebook Inc.’s new trans-Pacific internet cable, the first such project that will be majority-owned by a single Chinese company.  Wei Junkang, 56, is the main financier of the cable between Los Angeles and Hong Kong, a reflection of growing interest from China’s investors in high-tech industries.   It will be the world’s highest-capacity internet link between Asia and the U.S.

For Alphabet Inc.’s Google and Facebook, the undersea cable provides a new data highway to the booming market in Southeast Asia. Google and Facebook, which are blocked in China but seeking ways back in, declined to comment on market possibilities in China. Google said the project, called the Pacific Light Cable Network, will be its sixth cable investment and will help it provide faster service to Asian customers…

Backers hope to have Pacific Light operating in late 2018. The elder Mr. Wei’s company, Pacific Light Data Communication Co., will own 60%, Eric Wei said, and Google and Facebook will each own 20%. The project cost is estimated at $500 million, and the Chinese company hired U.S. contractor TE SubCom to manufacture and lay the 17-millimeter wide, 7,954-mile long cable…

The cable project requires U.S. government approval, including a landing license from the Federal Communications Commission and a review by Team Telecom, a committee of officials from the departments of defense, homeland security and justice….

Pacific Light will likely face higher scrutiny from Team Telecom due to the controlling interest by a foreign investor, said Bruce McConnell, global vice president of the EastWest Institute and a former senior cybersecurity official with the Department of Homeland Security.

Team Telecom rarely rejects a landing license application, Mr. McConnell said, but cable operators must agree to security terms.“The agreement is usually heavily conditioned to ensure that (U.S.) security concerns are met,” he said.

The terms often require an American operator of the cable to assist U.S. authorities in legal electronic surveillance, including alerting regulators if foreign governments are believed to have accessed domestic data, according to copies of agreements filed with the FCC. The U.S. landing party usually must also be able to cut off U.S. data from the international network if asked…

More than 99% of the world’s internet and phone communications rely on fiber-optic cables crisscrossing continents and ocean floors. That makes these cables critical infrastructure to governments and a target for espionage.

One of the Eric Wei’s businesses is a Chinese alternative to the QR code called a D9 code, which the company promotes as a “safe” alternative to foreign technology.

Excerpts from  China Firm Backs Asia-US Cable, Wall Street Journal, Mar. 16, 2017

Who Owns the Internet Pipes

The ships that lay electronic cables across the ocean floor look like cargo vessels with a giant fishing reel on one end. They move ponderously across the open water, lowering insulated wire into shallow trenches in the seabed as they go. This low-tech process hasn’t changed much since 1866, when the SS Great Eastern laid the first reliable trans-Atlantic telegraph cable, capable of transmitting eight words per minute. These days, the cables are made of optical fiber, can carry 100 terabits of data or more in a second, and aren’t owned only by telephone companies.

Among the newcomers are a few of the world’s leading internet companies, which have concluded that, given the cost of renting bandwidth, they may as well make their own connections. Facebook and Microsoft have joined with Spanish broadband provider Telefónica to lay a private trans-Atlantic fiber cable known as Marea. The three companies will divide up the cable’s eight fiber strands, with Facebook and Microsoft each getting two. The project, slated to be completed by the end of 2017, marks the first time Facebook has taken an active role in building a cable, rather than investing in existing projects or routing data through pipes controlled by traditional carriers. Marea will be Microsoft’s second private cable; a trans-Pacific one is scheduled to come online in 2017.

In June 2016, Google said it had finished a data pipeline running from Oregon to Taiwan, and it has at least two more coming: one from the U.S. to Brazil; the other, a joint project with Facebook, will connect Los Angeles and Hong Kong. Amazon.com made its first cable investment in May, announcing plans for a link between Australia and New Zealand and the U.S. Worldwide, 33 cable projects worth an estimated $8.1 billion are scheduled to be online by 2018, according to TeleGeography. That’s up from $1.6 billion worth of cables in the previous three years. And bandwidth demand is expected to double every two years. ..

Cables are just one way to increase the supply of bandwidth and cut costs, says Chetan Sharma, an analyst and telecom consultant. Facebook is also working on satellites, lasers, and drones to deliver internet access to remote places, and Google has experimented with hot air balloons. So far, undersea cables remain the best option for crossing oceans—they’re cheaper, far more reliable, and largely unregulated. The United Nations treats ocean cables in much the same manner as boat traffic, meaning companies can lay and repair cables in international waters pretty much wherever they please, provided they don’t damage existing ones.So Silicon Valley will continue to pour money into technology pioneered in the telegraph era. “It’s about taking control of our destiny,” says Mark Russinovich, chief technology officer for Microsoft’s cloud services division, Azure. “We’re nowhere near being built out.”

Excerpt from Bet you Own Broadband, Bloomberg, Oct. 20, 2016