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EXORDIUM

ISSUE 93 | FINANCE & LEGAL

BY WAYNE NIELSEN

W

elcome to Issue 93, our annual Finance and Legal edition. March Madness came early this year. For our foreign friends, March Madness is not a surreal passion play filled with political intrigue. Instead, it is the time of the annual NCAA college basketball tournament, generally throughout the month of March – and this year for us it came a little early. As you may have read or heard, SubTel Forum will be managing SubOptic 2019.

For me, SubOptic has always been the essential industry conference, and like most, I would not dare miss it. It is, quite frankly, an honor to be a part of it.

Specifically, we will be managing the organization and staging of SubOptic 2019, with the new SubOptic association retaining responsibility for the program. Our partnership allows SubOptic to concentrate on building a program that provides maximum value to attendees, supported by a SubTel Forum’s professional event management team. Folks we brought on almost a year ago – some of whom you will be meeting in this issue and beyond – are already busy working on the building blocks for SubOptic 2019, which will be held in New Orleans on 8-11 April 2019. My family and I attended our first SubOptic in Versailles in 1993, and I have attended every conference since. In those days, the “conference space” was a large tent where we stood for 3 days, neck and neck with all the other exhibitors hawking our wares. For me, SubOptic has always been the essential industry conference, and like most, I would not dare miss it. It is, quite frankly, an honor to be a part of it.

So, while the conference has certainly grown over the years, it has successfully retained that familial feel, which is core to its legacy. We at SubTel Forum are indeed looking forward to continuing this thirty-year tradition in the spirit and high standards the association and its members deserve. And as always, we hope you enjoy the many excellent contributions to this issue, discussing some very pertinent and timely industry issues. As for me, I am also going to take the moment to enjoy a little college hoops before things get crazier. Happy reading,

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IN THIS ISSUE... Exordium............................................................. 3 By Wayne Nielsen News Now........................................................... 6

Changing Dynamics In The World Of Submarine Fiber.............................................10 By Kieran Clark Message from the President of SubOptic.............................................................16 By Yves Ruggeri Streamlining The “Team Telecom” Review For Submarine Cables..................18 By Andrew D. Lipman, Ulises R. Pin and Stephany Fan A Loose Cannon On Deck............................24 By Douglas Burnett and Alice Leonard de Juvigny The Penultimate Frontier...........................30 By James Case FCC Priorities Under Republican Leadership........................................................34 By Wesley Wright 4

Data Centre Interconnectivity..................38 By Nigel Bayliff Cuba Up, Vietnam Down.............................42 By Doug Madory The Vital Importance of Subsea Cables for the Telecommunications Industry..............................................................48 By Caroline Elliott From The Conference Director.................51 By Christopher Noyes Back Reflection:..............................................52 By Francis Charpentier Advertiser’s Corner.......................................60 By Krisitan Nielsen Coda.....................................................................62 By Kevin G. Summers


ISSUE 93 | FINANCE & LEGAL

ADVERTISER INDEX STF Analytics......................................................8

OFS.......................................................................12 SubOptic 2019.................................................15 SubOptic Association....................................17 Huawei Marine................................................22

DOWNLOAD MEDIA KIT

WFN Strategies...............................................33 Undersea Fiber Communication Systems............................58

INC

Submarine Telecoms Forum, Inc.

2017 MEDIA KIT 5


SUBMARINE TELECOMS FORUM

News

Now

SubTel Forum welcomes appropriate news submissions from around the industry. If an item is newsworthy, we wil strongly consider it for posting on our daily news feed. Please keep in mind the following guidelines if you wish to submit a ress release to our new team: »» AP Style preferred. »» Cleary written, addressing pertinent parties and events in the first two paragraphs. »» Identify the organization or individual sending the release and include the name and telephone number for the primary point of contact »» Date the release and specify whether the material is for immediate use or for release at a later date. »» Type “END” at the bottom of the last page.

Press releases are accepted in both Microsoft Word and PDF format. Please include all relevant media in either JPG or PNG file format.

Submit Press Release 6

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€17m for Marseille (to Malta) Cable

Alaska Communications, Quintillion to bring broadband to rural Northwest Alaska communities Almanac Issue 21 Available Now

Angola Cables Selects Ciena for MONET Subsea Cable System

ASN Marine to Repair GLO-1 Subsea Cable Bangladesh Gets Connected to Second Submarine Cable Bangladesh to be Connected with 2nd Submarine Cable on Feb 21 Brazil-Africa Fiber Cable Project Makes Progress

Cinia and TTK Interconnect Networks to Provide the Fastest Data Gateway between Europe and Asia

Connection Cut: Vietnam’s Internet Users in the Dark Over Undersea Cable Repairs Djibouti Telecom to Connect Australia West Express Cable

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Docomo Granted Atisa License

Flexenclosure to Deploy an eCentre Cable Landing Station in Palau – Second CLS Order in the Pacific Region in as many Weeks Fugro Partners with Shell Ocean Discovery XPRIZE GBI Appoints Mohamed Saro as CCO Global Marine Expands Its Fleet

H.I.G. Capital Acquires Assets of Xtera Communications, Inc Huawei, Ericsson, Alcatel Interested in Chile Fibre Tender

Lumos Networks Announces Continued Sales Pipeline Expansion Tied to Virginia Beach Undersea Cable Landing Site

Marshall Islands Back in Internet Land MCT Submarine Cable Launch Promises Bright Future for Cambodian and Regional Telcos


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NEC Supplies Submarine Cable for System Connecting Hong Kong and Guam New Industry Group Forms Multi-Source Agreement for Shortwave WDM Optical Standards to Operate over Duplex Multimode Fiber, Simplifying Data Center Upgrades Nigerian Internet Exchange (IXPN) Goes Live at MainOne’s MDXi Lekki Data Center to Peer Local Internet Traffic

Nokia, Facebook Trial Spectral Efficiency NxtVn is Planning a Data Center Park in Virginia Beach

Orange to Build Submarine Cable for French Overseas Markets

Polynesian Leaders Agree to Extend Submarine Cable Retelit and BICS Open Up New Route to Europe for AAE-1 Cable

Samoa Cable Starts Submarine Cable Landing Station Build

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Samoa One Step Closer to Faster, Cheaper Internet

Southern Cross Talks Up NEXT as Survey Contact Signed

SEA-ME-WE 5 Consortium Completes Subsea Cable Project

Southern Cross, EGS Prepare to Cast Off to Survey NEXT Sub Cable Route

State of the Art Undersea Cable to Run from Ireland to France Submarine Cable Company with New CEO SubTel Forum to Manage SubOptic 2019

Telefónica Agrees to the sale of up to 40% of Telxius to KKR for 1,275 Million Euros

Telenor Norway Suffers Submarine Cable Cut

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ISSUE 93 | FINANCE & LEGAL

This Week in Submarine Telecoms February 27-March 3 This Week in Submarine Telecoms February 6-10 This Week in Submarine Telecoms January 15-20 This Week in Submarine Telecoms March 13-17 This Week in Submarine Telecoms March 6-10

Vietnam Cable To Resume Operation This Weekend

Vietnam’s New Undersea Internet Cable Back up to Speed Following Repairs Vietnam’s Notorious Undersea Internet Cable Ruptures Again WFN Strategies Achieves ISO 9001 Certification

Teraco Raises R1.2B For Future Data Centers

This Week in Submarine Telecoms February 20-24 7


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SUBMARINE TELECOMS FORUM

CHANGING DYNAMICS IN THE WORLD OF SUBMARINE FIBER BY KIERAN CLARK

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D

ynamics throughout the submarine fiber industry have been changing as companies adapt to the future of telecommunications – including how systems are financed. Cash-rich and data hungry Over The Top (OTT) providers are making the move from simple bandwidth purchasers to cable system owners, and fewer systems are relying on future bandwidth sales for financing. While the traditional consortium still has its place, a rise in single owner cable systems has been observed as the industry looks for more flexibility in connecting our evolving digital world. Welcome to SubTel Forum’s annual Finance and Legal issue. This month, we look at the industry’s current finance and ownership status by presenting our most current data as tracked by the ever evolving STF Analytics database, where products like the Almanac, Cable

ISSUE 93 | FINANCE & LEGAL

Systems Announced RFS 2017-2020 30 25 20 15 10 5 0

2017

2018

Map, Online Cable Map and Industry Report find their roots. It has been a full year since our last look at the financial situation of planned systems around the world. New systems have been announced and planned systems have gone into service, while others have been delayed or changed. Quite a lot can

2019

2020

happen in one year, and this year was no different. Since our last Finance and Legal issue, we observed that of the 21 planned systems announced to be ready for service in 2016, only five were accomplished. This is down a step further from 2015, which saw only six systems move from planning to reality. Several of the re-

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System Ownership Type 2017-2020

20 15 10 5 0

2017

2018 Consortium

maining systems were delayed to 2017 for various reasons, while the remainder of systems scheduled to be ready for service in 2016 simply died outright. Combined with only a net addition of five systems announced for the future compared to a year ago, this seems like cause for concern. However, other factors in the cable development process might indicate otherwise.

2019

2020

Single Owner

Continuing the comparison to last year’s numbers, the way systems are being financed sustains a shift towards single owners. This trend was first observed in 2015 and has since continued to move towards single owners. Over the next three years, only 36 percent of systems will be owned by a consortium, with the remaining 64 percent having a single owner. While consor-

tium ownership reduces the financial risk to any single owner should a cable system fail, single ownership provides potentially greater flexibility and speed to the cable development process. To provide additional context to this shift in ownership type, many of the new systems over the next several years are relatively smaller systems that serve specific needs. A large portion of the systems planned for 2017-2020 connect various island nations in the Pacific to existing international pipelines, or serve specific purposes such as connecting data centers within an OTT provider’s international infrastructure. With OTTs continuing to drive cable demand because of the need for more control over the development process and a desire for faster system installations, this trend is expected to continue over the next several years. While single owners continue to increasingly dominate the sub-

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ISSUE 93 | FINANCE & LEGAL

System Financing Type 2017-2020 Debt/Equity 38%

Multilateral Development Bank 11%

Self 51%

marine fiber market, the way a system is being financed has changed very little from last year. In 2015, an even split between Debt/Equity and Self-Financed systems was observed. For 2016, a new factor was added with a noticeable percentage of systems backed by Multilateral Development Banks (MDBs). This year, the percentage of financing types has stayed consistent,

with only a very slight reduction of Self-Financed systems in favor of Debt/Equity and MDBs. This shift away from Debt/Equity financing indicates that system owners and financiers are less willing to take on the uncertainty of Debt/Equity financing, and increasingly prefer having cash guaranteed up front. When the nature of many planned systems for the next few

years is considered, these numbers make sense. So many of the planned systems serve very specific commercial and regional needs, weakening any business case attempting to justify financing based on selling future bandwidth. Breaking the next several years down regionally, the AustralAsia region shows the most system activity by far. Well over one-third of planned systems for 2017-2020 will be developed in this region. This reflects the massive growth still occurring in Southeast Asia, as well as Australia’s desire for increased route diversity. The Americas region accounts for 19 percent of global activity, largely fueled by OTT connectivity between the United States and South America. Activity in the Transatlantic and Transpacific is almost entirely OTT driven, while the Indian Ocean PanEast Asian region continues to benefit from being a crossroads between Asia and Europe.

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Systems Announced by Region 2017-2020 Transpacific 12%

Americas 19%

Transatlantic 10% Indian Ocean Pan-East Asian 10% EMEA 10%

AustralAsia 39%

Surprisingly, the EMEA region – the largest in the world – shows some of the weakest growth. Likely due to growing economic and political instability in this part of the world, the EMEA region’s portion of global system activity is down by seven percentage points compared to last year. The true measure of a cable system’s viability – and the strongest indicator that a system will be completed – is whether or not it is Contract In Force (CIF). At this time last year, only 38 percent of future systems had achieved this important milestone. One year later, the

CIF rate has climbed to 42 percent. Combined with an overall increase in the number of planned systems compared to last year, this seems like an encouraging sign for overall industry health. However, in March of 2016 fully two-thirds of all systems planned for that year were CIF. This year, only 48 percent of systems planned for 2017 are CIF. This sharp decline could be a cause for concern, as the first quarter of the year is nearly over. Still, many of the remaining systems planned for this year are smaller – five are under 1,000 kilo-

Systems CIF 2017-2020

Yes 42% No 58%

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meters – so there is still time to hit their expected RFS date. Financing for systems continues to be the largest hurdle for many prospective owners – a fact that is unlikely to go away any time soon. Even with these difficulties, the next 18-24 months look to keep the submarine fiber industry very busy – maybe the busiest it has been in over a decade. While the cash-rich OTT providers are driving an increasing number of planned systems, there is some question as to how long this trend will last for, casting a cloud of uncertainty beyond the next two years. However, a lot can change in that time and a cautiously optimistic outlook is the most suitable for now.

Kieran Clark is an Analyst for Submarine Telecoms Forum. He joined the company in 2013 as a Broadcast Technician to provide support for live event video streaming. In 2014, Kieran was promoted to Analyst and is currently responsible for the research and maintenance that supports the SubTel Forum International Submarine Cable Database; his analysis is featured in almost the entire array of SubTel Forum publications. He has 4+ years of live production experience and has worked alongside some of the premier organizations in video web streaming.


ISSUE 93 | FINANCE & LEGAL

NEW ORLEANS 15


SUBMARINE TELECOMS FORUM

MESSAGE FROM THE PRESIDENT BY YVES RUGGERI

PRESIDENT OF THE SUBOPTIC EXECUTIVE COMMITTEE

A

s you may have heard, this year SubOptic Association opens an exciting new chapter in its history. After thirty years of staging successful events, SubOptic association has decided to expand its scope and open its membership to everyone in the subsea cable industry. Thus, in addition to the cycle of SubOptic conferences - the next to be held in New Orleans in spring 2019 - SubOptic is enlarging its range of activities to become a membership-based trade association for the undersea cable sector. In May at ITW, we will unveil the Association’s revamped constitution, elect a new Executive Committee, and lay plans for future projects for the sector including seminars, working groups, networking events and more. I am grateful that SubOptic has always been able to count on the readers of SubTel Forum as an active contributors to SubOptic. In that spirit, I am writing to invite you to join us for the inaugural members’ meeting in Chicago on Sunday, May 14. 2017. Your reply indicating your company’s willingness to be a SubOptic member is sufficient for your full participation in the inaugural meeting, including voting for the EC and, if you wish, putting forward your candidacy for the EC or one of its subcommittees. Details about May event registration and membership are available on our website. Looking forward to your confirmation (by email or via the website) and to seeing you or one of your colleagues at our morning launch event in Chicago on May 14! Kind regards,

Yves Ruggeri President, SubOptic 2016 Executive Committee

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GET INVOLVED

ISSUE 93 | FINANCE & LEGAL

17


SUBMARINE TELECOMS FORUM

STREAMLINING THE “TEAM TELECOM” REVIEW FOR SUBMARINE CABLES BY ANDREW D. LIPMAN, ULISES R. PIN AND STEPHANY FAN 18


T

he Federal Communications Commission (“FCC” or “Commission”) regulates submarine cable landings in the United States. Operators of submarine cables must obtain an FCC license pursuant to the Submarine Cable Landing License Act of 1921 and Section 1.767 of the FCC’s Rules. Although the application process for a submarine cable license may theoretically be completed in as little as 45 days from the date the application is put on public notice; in practice, the FCC licensing process tends to take significantly more than 45 days, largely due to the national security review process conducted by “Team Telecom.”1 According to a FCC Communications Security, Reliability and Interoperability Council’s (“CSRIC”) report,2 the Team Telecom process, 1 “Team Telecom” is an ad hoc task force comprised of the Departments of Defense, Homeland Security, and Justice, including the Federal Bureau of Investigations. 2 Communications Security, Reliability and Interoperability

rather than FCC scrutiny, is the principal source of delay in the grant of a cable landing license. The FCC will rarely grant a landing license in fewer than six months where Team Telecom review is required. The Current Team Telecom Process Because most subsea cable applications have some level of foreign ownership or participation, submarine cable landing license applications are generally subject to a national security review from Team Telecom prior to approval from the FCC. For a new submarine cable system, Team Telecom will likely conduct a review if (1) the system will connect the United States to a foreign point, or (2) the system will have aggregate direct or indirect Council IV, Submarine Cable Resiliency, Working Group 4A: Final Report – Interagency and Interjurisdictional Coordination, Jun. 2016, available at https://transition.fcc.gov/ bureaus/pshs/advisory/csric5/WG4A_Report-Intergovernmental-Interjurisdictional-Coordination_June2016.pdf

ISSUE 93 | FINANCE & LEGAL

foreign ownership of 10 percent or more. As part of the process, Team Telecom asks the applicants a series of questions, commonly known as “triage questions,” pertaining to issues such as equipment type, storage and security of network data and other physical security information, encryption key usage, and entities with access to the applicant’s network and data. Where particular ownership, operational, or financing arrangements raise concerns, Team Telecom will typically make additional inquiries and information requests. This process normally results in the removal of the application from streamlined processing at the FCC and the withholding of FCC approval until Team Telecom’s review is complete. Nowadays, there are no statutory or other limitations governing the time

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that Team Telecom can take to complete its analysis. If the national security and law enforcement agencies have no comment, the Commission can move forward with its action on the application. Often, however, if Team Telecom determines that the information gathered raises national security or law enforcement issues, it will negotiate a mitigation agreement with the applicant(s). Mitigation agreements can take the form of a letter of assurances (“LOA”) or a national security agreement (“NSA”). NSAs and LOAs help facilitate lawful intercept programs conducted by U.S. national security and law enforcement agencies, as well as for preventing foreign governments from gaining visibility into U.S. telecommunications systems. These documents frequently include limitations on equipment types used, 20

or requirements to establish a network operations center (“NOC”) located domestically and operated by screened U.S. citizens. Once a mitigation instrument is executed, Team Telecom petitions the FCC to condition any license approval on compliance with the LOA or NSA. Although Team Telecom has the option to request the FCC deny an application on national security or law enforcement grounds, to date, it never requested that the FCC completely deny an application. The process is largely secretive and confidential, although any resulting NSA or LOA are routinely made public through Team Telecom’s petition to the FCC to condition approval upon compliance with the mitigation agreement. Looking Forward In June 2016, the FCC approved a Notice of Proposed Rulemaking

(“NPRM”) that aimed to streamline and facilitate the Team Telecom review process, in response to a letter from the Executive Branch’s Telecommunications and Information Administration (“NTIA”).3 Specifically, the NPRM proposed to: Adopt a 90-day time period for Team Telecom review, with a 90-day extension in rare circumstances.  Require all applicants to certify at the outset that the applicant will comply with many of the requirements generally found in NSAs and LOAs. In particular, applicants shall (1) comply with all applicable provisions of the Communications Assistance for Law Enforcement Act (“CALEA”); (2) make communications to, from, or within the United States, as well as records thereof, available in a form and location that 3 Process Reform for Executive Branch Review of Certain FCC Applications and Petitions Involving Foreign Ownership, Notice of Proposed Rulemaking, IB Docket No. 16-155, FCC 16-79 (June 24, 2016).


permits them to be subject to lawful request or valid legal process under U.S. law; and (3) agree to designate a point of contact in the U.S. who is a U.S. citizen or lawful permanent resident for the execution of lawful intercept requests. Require applicants with reportable foreign ownership to provide information on ownership, network operations, and related matters when filing their applications.  The proceeding garnered active participation from the industry, with comments filed by the NTIA and numerous telecommunications providers, broadcasters, and satellite firms. Although the NTIA has since warned that a strict 90-day timeline may be unfeasible, the comments illustrated that there is strong support to streamline the Team Telecom review process. Commenters generally agreed that although Team Telecom serves important national security and foreign policy interests, the current process lacks clarity, oversight, and predictability. Currently, the proposed rules appear to have been shelved due to the change in Administration. However, recently appointed FCC Chairman Ajit Pai should resume the streamlining effort, especially in light of the new administration’s de-regulatory strategy. Republican Commissioner Michael O’Rielly has been a strong supporter of Team Telecom reform, and should push for the FCC to bring back efforts to update the review process. The submarine cable industry should encourage the FCC to codify and streamline a process that is, at present, both unregulated and unclear. Specifically, the submarine cable community should urge the Commission to adopt the proposals set forth in the NPRM and set a time limit by which Team Telecom review must be completed. Doing so is crucial to the United States’ telecommunications industry, as the vague and lengthy nature of Team Telecom review frequently delays

investment and impedes technological advancement. Although it is important to balance national security and deregulation, streamlining the Team Telecom process is critical to foster innovation and investment in the United States. The submarine cable industry should urge the Commission to expediently resume its streamlining efforts and issue final rules on the Team Telecom process as soon as possible. Andrew D. Lipman practices in most aspects of communications law and related fields, including regulatory, transactional, litigation, legislative, and land use. Andy’s clients in the private and public sectors include those in the areas of local, long distance, and international telephone common carriage; Internet services and technologies; conventional and emerging wireless services; satellite services; broadcasting; competitive video services; telecommunications equipment manufacturing; and other high-technology applications. Additionally, he manages privatizations of telecommunications carriers in Europe, Asia, and Latin America.

ISSUE 93 | FINANCE & LEGAL

Stephany Fan’s practice includes assisting US and international telecommunications carriers and technology companies with regulatory matters before the Federal Communications Commission (FCC) and state public utility commissions. Her work includes domestic and international licensing, regulatory compliance in response to various corporate transactions, and representing clients in rulemaking and complaint proceedings. In addition Stephany advises investors in the technology sector with analysis and advice regarding potential privacy and regulatory issues. She is admitted in California only, and her practice is supervised by DC Bar members.

Ulises R. Pin represents US and foreign communications and technology companies on corporate, financial, and regulatory matters. He also advises private equity firms, venture capital funds, and financial institutions on investments in the telecommunications, media, and technology (TMT) sectors. Ulises represents clients before the Federal Communications Commission and government agencies in Mexico, Latin America, Europe, and Asia. He has substantial experience in cross-border transactions. 21


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ISSUE 93 | FINANCE & LEGAL

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A LOOSE CANNON ON DECK

PROPOSED CHANGES TO INTERPRETATION OF THE US JONES ACT FOR CABLE SHIPS BY DOUGLAS BURNETT AND ALICE LEONARD DE JUVIGNY

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O

n January 20, 2017, the first day of the new administration of President Trump, the US Department of Homeland Security’s Customs and Border Patrol (“CBP”) fired a shot across the bows of the international cable community. CBP proposed policy changes on long-standing interpretations of its ruling letters that could have grave consequences for the international submarine cable community. If adopted, cable ships would be prohibited from laying and repairing cables on US voyages unless they are coastwise qualified vessels that comply with the Jones Act. To be qualified for US coastwise operations, a cable ship would have to be: (1) built or substantially rebuilt in a US shipyard, (2) 75 percent owned by US citizens and (3) 75 percent of the crew would be required to be US citizens. None of the fifty-nine or so ocean-going cable ships in the world’s fleet satisfies all of these expensive requirements. No commercial cable ship has been built in the United States since the Second World War. The immediate impact would be a de facto blockage of cable maintenance and repair operations anywhere on

the US continental shelf, not only off the US mainland, but also off Alaska, Hawaii, Puerto Rico, and Guam. The sole circumstances in which foreign cable ships could be authorized to proceed might be if they loaded the cable either in the high seas or in foreign waters and then laid it on the US continental shelf without first calling at any US port – which is often very impractical. This would affect not only US cable owners and operators, but also their foreign consortium partners and tried and true maintenance agreements such as the North American Zone (“NAZ”), the Atlantic Cable Maintenance Agreement (“ACMA”), and the Atlantic Private Cable Maintenance Agreement (“APMA”). The robust and reliable system protecting international cable systems that connect the United States to the rest of the world is at risk. A brief introduction to US cabotage law is necessary to understand this sea change. Since the adoption of the Marine Merchant Act in 1920 all ships transporting merchandise or passengers between US ports are subject to requirements of domestic ownership, construction, flag, documentation and crew. The stat-

ISSUE 93 | FINANCE & LEGAL

ute is commonly named the Jones Act by reference to the Washington state senator who introduced the bill to support his state’s shipping sector and require shipping bound for Alaska to be focused in Seattle. While the law’s purpose is clear, its application is less so. A major flaw of the Jones Act is that it does not explain what constitutes transportation of merchandise. This is an important issue because any vessel that violates the Jones Act is subject to the drastic remedy of vessel forfeiture. CBP, the agency responsible for Jones Act enforcement, recognizing the onerous penalties associated with the Jones Act, upon request frequently issues ruling letters on the Jones Act’s application to prospective maritime transactions. These advisory opinion letters not only allow prudent planning, but in the event of an accusation by a competitor of a Jones Act violation, they function as a sort of “get out of jail” card, because they show that the vessel owner took reasonable steps to comply with the Jones Act. The Jones Act originally was applicable to any transportation of merchandise or passengers be-

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tween two points in a three nautical mile territorial sea. CBP has held that any transportation of cable as cargo between two US ports requires a Jones Act coastwise vessel. Subsequently, with the passage of the Outer Continental Shelf Act in 1976, Jones Act coverage was extended to points on the US continental shelf which, depending upon the facts, may have implications in connection for cables associated with the exploitation of natural resources on the continental shelf such as oil, gas, or wind. The Jones Act was amended in 1988 to define merchandise to include even valueless materials. Under this amendment, CBP has held that the salvage of an out-of-service submarine cable requires a coastwise vessel. Although cable operations were already common well before the 1920, the Jones Act is silent about whether submarine cables are merchandise. Does the laying or repair of a cable in US waters constitute transportation of merchandise sub26

ject to Jones Act’s requirements? In ruling letters, including four issued from 1982-2001 which CBP now seeks to revoke or modify, CBP has answered negatively on the basis of two main rationales. First, cable operations involve no transportation because the cables are installed on the seabed, rather than unloaded at port or destination. The laying of the cable on the seabed breaks the continuity of the cable ship’s voyage between points on the US continental shelf. Second, cable operations involve no merchandise because cables are considered vessel equipment required to carry out the sole mission of the cable ship. CBP ruling letters also set limits on the cable ships that do not meet Jones Act coastwise qualifications: they cannot transfer cable from one US port to another without laying it; they cannot carry more than 5 percent of extra cable as spare on US voyages; and they cannot recover cable in US waters and bring it to a US port for recycling. Simply put,

operations other than cable laying or repair on the continental shelf must generally be conducted by a Jones Act’s vessel. These rules are defined in more than twenty CBP public record ruling letters that address the various aspects of cable operations. As a result, relying on these long established rulings, foreign cable ships routinely operate in US waters to lay and repair submarine cables without any Jones Act complications. So, why does CBP now consider revoking or modifying its own precedents? One problem is that CBP has granted in general many exemptions over the years to a great variety of transactions that seem to contradict or confuse the meaning of vessel equipment. The agency has been noticeably permissive in its interpretation of the concept of vessel equipment in connection with offshore operations involving oil and gas. For example, a ruling held that the transportation of bags of con-


crete from a US port to a US offshore oil rig does not violate the Jones Act because the bags are considered vessel equipment. Similarly, exhibit hall structures added to a barge to make it a floating exhibit hall did not violate the Jones Act because the deck structures were considered vessel equipment necessary for the barge’s primary mission as a floating exhibit hall. Not unexpectedly, the oil and gas industry has used these vessel equipment exemption rationales extensively to operate diverse extraction and exploration devices on board foreign barges and ships. In short, as some have argued, the vessel equipment exception has grown so much that it is becoming the rule. CBP attempted to restrict the scope of the vessel equipment exception in 2009. At the time one could argue that this change was consistent with the administration of President Obama that general-

ly was viewed as not receptive to policies that allowed for oil and gas exploitation since these energy resources competed with alternative renewable sources which the administration favored. A few months after classifying wellhead assemblies called “Christmas trees” as equipment, the agency revoked its ruling and proposed to overrule a series of other rulings to restore consistency in its letter ruling case law. The notice of proposed revocation was applauded by US shipyards and US shipping companies. However, it was withdrawn by CBP in the face of strong opposition from many businesses that had developed in reliance on the Jones Act’s exemption, including submarine cable interests. Since then, CBP has been ambiguous in its treatment of Jones Act’s ruling requests. The recent notice explains its reticence. Since at least last April, CBP has been engaged in preparing a new notice of

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revocation released on January 10 and published on January 20, 2017 – the very day of President Trump’s inauguration. The original 30-days comment was extended until April 18, 2017. At the earliest, the proposed revocation and modification could thus be effective as early as July 18, 2017. Such timing says a lot on the determination of CBP to change its policy. CBP has learned from its 2009 experience. The agency may have waited for a favorable policy context with a new administration, but it has also strengthened the content of the proposal. The new notice refers to an official definition of vessel equipment from 1938, and shows how CBP rulings have progressively expanded its scope to exempt all sorts of items remotely used in the operation of the vessel. While the examples all relate to offshore servicing vessels, the notice lists twenty-five rulings

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that are not limited to the oil and gas context. Four of these rulings deal with cable operations. Since the notice makes clear that all similar transactions would be subject to the new policy, its adoption would spell the end of the Jones Act’s exemptions for cable ships. Despite an apparent focus on the oil and gas industry, the notice thus has a much wider scope. CBP may not be fully aware of the potential consequences for international telecommunications carried on cables. Although the agency has analyzed and exempted many individual cable operations, it may be missing the big picture of the importance of the current reliance on non-coast wise cable ships to lay and maintain the critical international submarine cable infrastructure which is the bedrock of the nation’s international digital economy. Crucial facts may be unknown or underappreciated by CBP policy-makers: There are no

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cable ships in existence that comply with the Jones Act’s requirements; it would take five years or more and cost hundreds of millions of dollars to build even a single ship; and more than one new cable ship would be necessary to ensure speedy repairs in all US waters in the Atlantic and Pacific Oceans. Several companies and organizations such as the ICPC and NASCA are planning comments to bring the salient facts to CBP’s attention. They will raise multiple arguments: (1) the absence of US jurisdiction to regulate international cable operations beyond territorial seas; (2) the fact that cables and the equipment used to lay and repair them such as grapnels, ploughs, universal joint kits, and linear cable engines are integral to the sole mission of the cable ship and are properly classified as vessel equipment even under the vintage 1938 definition of the term relied upon by CBP; (3) the unique

characteristics of cable operations because laying a cable on the seabed breaks the continuity of voyage for Jones Act purposes; and (4) the importance of a well-functioning cable maintenance system for the reliability of US international telecommunications and security. The public policy implications are so significant that the situation may even warrant a rare and normally hard to obtain Jones Act’s national defense waiver exemption or a grandfather approach for existing cable ships and maintenance contracts. Whereas the cable community is presenting a united front against the proposed modification, other industries fragmented. Oil and gas companies and shipping companies are particularly divided due to their varying level of reliance on US or foreign ships and crews. US shipbuilders and mariners will of course be united in supporting the proposed CBP actions.


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sity of Denver Law School and is a retired captain in the U.S. Navy. He has argued before the U.S. Supreme Court and testified as an industry expert on submarine cables before the 2007 Senate Foreign Relations Committee for the UNCLOS hearings. Douglas has worked on submarine cable cases for over 30 years. He has frequently instructed at the Rhodes Academy of Oceans Law and Policy in Greece.

The strong polices of President Trump to promote US energy independence and also to promote creation of new jobs from the building of new ships in US shipyards are factors hard to evaluate in the ultimate CBP decision process. It is very difficult to predict the final decision of US regulators on this highly controversial question. On the one hand, the new administration promotes the development of US jobs and ship construction. This augurs well for the adoption of the proposed revocation. On the other hand, the new administration supports the US oil and gas industry and seeks greater energy independence. The proposal could thus well be taken to spare oil and gas companies the cost of Jones Act’s compliance. Either way, the cable community is hoping that the letter rulings on cables at issue will be culled out, reaffirmed and not modified or revoked. Adoption of a restrictive view that allows cable maintenance and laying to be done only by US Jones Act compliant cable ships on the continental shelf will have international implications as well. Such an example will encourage other coastal States to adopt similar cabotage measures. If widespread, the current cost effective and efficient system of the laying and regional maintenance of international submarine cables could unravel. The impacts

to world submarine cable systems and their repair could well be analogous to a loose cannon careening across the ship’s deck in a gale. Only the future will tell where the new line may be drawn between the submarine cable activities subject to Jones Act’s requirements and those that are exempted. What is known is that CBP is determined to interpret the notion of vessel equipment more restrictively. Now it is time for the international cable community and individual companies and maintenance agreements to let their voices be heard by filing comments for a confirmation of the long-standing Jones Act’s treatment of cable ships that allow them to lay and maintain international cables in US waters.

Alice Leonard de Juvigny concentrates her practice on shipping, transportation, energy, submarine cables and pipelines, as well as maritime boundary disputes, with a particular focus on international dispute resolution and commercial litigation and arbitration. Before joining the firm, she worked for several maritime law firms in Hamburg, Paris and New York. She also worked for the United Nations, in the Division for Ocean Affairs and the Law of the Sea. She is a graduate of the Rhodes Academy on Oceans Law and Policy.

Douglas R. Burnett, International Law Advisor for the International Cable Protection Committee (since 1999), and Maritime Partner in the New York office of Squire Patton Boggs (U.S.) LLP, douglas.burnett@ squirepb.com an international law firm with 44 offices in 21 countries. His practice focuses on international law, submarine cables, maritime and shipping, involving litigation and arbitration. Douglas is a graduate of the U.S. Naval Academy and Univer-

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THE PENULTIMATE FRONTIER MAPPING THE OCEAN BY JAMES CASE

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t has been said that space is the final frontier, but in 2017 we know more about the surface of Mars than what lies beneath the surface of Earth’s oceans. 95 percent of the ocean is unexplored, but there is an XPRIZE competition aiming to change that. The Shell Ocean Discovery XPRIZE is a global competition challenging teams to advance ocean technologies for rapid, unmanned and high-resolution ocean exploration and discovery. Sponsored by Shell, teams are competing to develop deep-sea underwater robots that can deliver the ability to fully map and discover the wonders of the deep-sea like never before by advancing the autonomy, scale, speed, depths and resolution of ocean exploration. In 2015, 32 teams from 22 countries began vying for their share of a $7 million prize purse, and in February 2017, XPRIZE whittled the competition down to 21 teams, including our team, Oceanzus. It initially struck me as odd that Shell was sponsoring an ocean mapping competition, as professionals

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in the submarine cable, oil & gas and nautical charting industries have been mapping the seabed for years, but then I looked into the XPRIZE requirements and I saw the challenge. The competition required such high resolution in such a short amount of time that multiple survey vehicles operating together close to the ocean seabed would be needed. Intrigued, I put together a team and began brainstorming ideas. We decided that instead of developing a new AUV or mapping technology, Oceanzus would develop a platform that supports just about any survey asset that the world can throw at it— a continuous deployment platform that can operate from the surface all the way to full-ocean depth. The design begins with an autonomous vessel on the surface of the ocean—a boat capable of power generation, data transfer, topside logistics, and GPS-aided navigation for subsurface vehicles. This vessel will deploy the MX-1, a subsea deployment platform housing multiple AUVs. The MX-1 is capable of

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transferring power & data to the survey AUVs at depth, and it cycles power and data with the survey vessel during the survey so it doesn’t need to return to the surface until the survey is complete. Now that our team has been selected for the semi-final round, we will have the opportunity to trial our platform in a designated 500 square km competition area. Each team will operate its entry to a maximum depth of 2,000 meters, aiming to map 20-percent of the competition area at 5.0-meter horizontal and 0.5-meter vertical resolution and identify and image at least five archeological, biological or geological features at any depth, all within 16 hours. Up to ten finalist teams will be selected to move on to Round 2 where the exploration challenge in the 500 square km competition area is even more difficult. The teams will operate their entries at a depth of 4,000 meters, aiming to map 50-percent of the competition area at 5.0 meters’ resolution and find, identify and image at least ten archeological, biological 32

or geological features at any depth, all within 24 hours. At the end of the competition, a $4M Grand Prize and $1M Second Place Prize will be awarded to the teams that receive the top scores for demonstrating the highest resolution seafloor mapping, after meeting all minimum requirements for speed, autonomy and depth. As part of the total $7M prize purse, the National Oceanic and Atmospheric Administration (NOAA) is offering a $1M bonus prize to teams that demonstrate their technology can “sniff out” a specified object in the ocean by tracing a biological and chemical signal to its source. Our team at Oceanzus is comprised of industry experts, experienced in ocean, software, and mechanical engineering, as well as hydrographic surveyors and project managers. We’re thrilled to be a part of this competition, and we’re focused on exceeding the challenge set forth by XPRIZE. For more information about the Shell Ocean Discovery XPRIZE visit http://oceandiscovery.xprize.org

James Case is the sole proprietor of Case Ocean Services LLC, providing software development, geoinformatics, ocean engineering and hydrographic survey solutions to a variety of ocean technology companies. He also supports WFN Strategies as Routing Manager. Over the course of 22 years Mr. Case has worked around the world accomplishing hydrographic and submarine cable surveys, desktop studies, customer representation and project management for oil and gas, commercial telecommunication, government and higher-education customers. In June of 2016, he organized and entered team Oceanzus into the Shell Ocean Discovery XPRIZE Competition, advancing to the semi-final round in 2017.


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.com

Telecoms consulting of submarine cable systems for regional and trans-oceanic applications 33


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FCC PRIORITIES UNDER REPUBLICAN LEADERSHIP BY WESLEY WRIGHT

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e are about halfway through President Trump’s first 100 days in office. A few days after he was inaugurated, on January 23, 2017, he appointed Federal Communications Commissioner Ajit Pai as Chairman of the FCC. Chairman Pai is joined by Commissioners O’Reilly (a Republican) and Clyburn (a Democrat). All three have served at the FCC for the past several years. The Republican majority should make it easier for Chairman Pai to quickly act on his priorities. His tenure at the FCC makes determining his priorities a bit easier because we can examine then-Commissioner Pai’s public statements in several high-profile – and sometimes contentious – FCC proceedings.

NET NEUTRALITY

What has the FCC Done? In 2015, the FCC adopted Net Neutrality rules that prohibit Internet Service Providers (ISPs) from blocking access to legal content; throttling, impairing or degrading lawful traffic; and favoring some lawful Internet traffic over other lawful traffic in exchange for consideration.  As part of these rules, the FCC reclassified high speed Internet access service (broadband) as a ”telecommunications service”  subject to Title II of the Communications Act. Commissioner Pai was a vocal critic of these rules before they were finalized. What Did Pai Say Then? A few weeks before the rules were adopted, Commissioner Pai released a “Fact Sheet: President Obama’s Plan to Regulate the Internet,” challenging the FCC’s ability to adopt its rules. He then released a scathing dissent once the rules were adopted, arguing that the new rules would result in consumers paying a higher rate for slower Internet service with fewer choices of ISPs. Excerpt from Pai’s Statement: “To paraphrase Ronald Reagan, President Obama’s plan to regulate the

Internet isn’t the solution to a problem. His plan is the problem.” What Has Pai Said Since Then? Commissioner Pai believes that Title II regulation of the Internet led to decreased investment in broadband infrastructure and has harmed consumers by restricting service plan offerings for mobile devices. Since President Trump’s win in November, Commissioner Pai has said net neutrality’s “days are numbered.” Prognosis: Modifying the Net Neutrality rules at the FCC will be a resource-intensive effort. It will require the Commission to issue a comprehensive notice of proposed rulemaking and develop a substantial record demonstrating why the FCC should deviate from the public interest findings that led to the adoption of the original rules. It is quite possible that Congress will intervene to scale back the scope of these rules. In the near-term, it

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is possible that the FCC will take a relaxed enforcement approach and adopt a more expansive exemption from the enhanced transparency rule.

SPECTRUM POLICY

What has the FCC Done? Unlike the Net Neutrality rules, Commissioner Pai and his Democratic colleagues have generally agreed that additional spectrum should be made available to private enterprises. President Obama committed to making 500 MHz of federal and non-federal spectrum available for mobile and fixed wireless broadband use, and the FCC subsequently issued a Notice of Inquiry to identify spectrum bands above 24 GHz that could support consumer broadband services. What Did Pai Say Then? Commissioner Pai was supportive of these efforts, but encouraged the

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FCC to do more to promote infrastructure deployment. Excerpt of Pai’s Statement: “Last year, I laid out my vision for a regulatory framework that will ensure our wireless leadership continues into the 5G future. In addition to opening up these spectrum bands, that plan includes removing the barriers to infrastructure deployment. That means completing our small cell proceeding. That means pressing ahead on the IP Transition. And that means giving providers large and small the maximum incentive and flexibility to invest in fiber and other building blocks of tomorrow’s networks.” What has Pai Said Since Then? Commissioner Pai believes the federal government controls too much spectrum. Prognosis: We expect Chairman Pai’s FCC to continue looking to make additional spectrum available for private enterprises. We also expect him to take it a step further 36

and promote rules to enable more efficient infrastructure deployment.

TELEPHONE CONSUMER PROTECTION ACT

What has the FCC Done? The TCPA generally prohibits unwanted robocalls, telemarketing calls, and unsolicited fax advertisements. In 2015, the FCC released a Declaratory Ruling and Order to clarify various aspects of its TCPA rules, including wireless number reassignment and the ability of consumers to revoke consent to receive robocalls. What Did Pai Say Then? Commissioner Pai dissented from the FCC decision, arguing that the FCC should more aggressively enforce its rules and enable carriers to block spoofed calls. Excerpt from Pai’s Statement: “We could be taking aggressive enforcement action against those who violate the federal Do-Not-Call rules. We could be establishing a safe harbor so that carriers could block

spoofed calls from overseas without fear of liability. And we could be shutting down the abusive lawsuits by closing the legal loopholes that trial lawyers have exploited to target legitimate communications between businesses and consumers.” What has Pai Said Since Then? He has argued that trial lawyers have “twisted the [TCPA’s] words to target useful communications between legitimate businesses and their customers,” resulting in the TCPA “becom[ing] their ATM.” Prognosis: We expect robocalling and TCPA issues to remain on the FCC’s front burner, but also expect the agency’s Enforcement Bureau to take a more aggressive approach to investigating potential violations of these rules.

BROADBAND PRIVACY RULES

What has the FCC Done? In October, the FCC adopted a comprehensive set of rules to protect


Excerpt from Pai’s Statement: “… since the beginning of this proceeding, I have pushed for the Federal Communications Commission to parallel the FTC’s framework as closely as possible. I agreed with my colleague that consumers have a ‘uniform expectation of privacy’ and that the FCC thus ‘will not be regulating the edge providers differently’ from ISPs. … I was disappointed—but not surprised—when FCC leadership circulated an Order that departed so dramatically from those principles.” Prognosis: Numerous parties filed Petitions for Reconsideration of the Broadband Privacy Rules, urging the FCC to reconsider various aspects of these rules (or, in many cases, arguing that the rules should be repealed). These pending petitions provide a vehicle for a Republican-led Commission to walk-back many aspects of the controversial decision in relatively short order.

the confidentiality and security of information that broadband internet service providers (ISPs) acquire from customers. The rules (among other things) require ISP’s to obtain opt-in consent from consumers to share and use sensitive information like geo-location, financial information, children’s information, and the content of communications, as well as the use and sharing of non-sensitive information is subject to optout consent.  The rules apply to providers of broadband Internet access service but not online content providers, search engines or social media platforms (“edge providers”).  What Did Pai Say Then? Commissioner Pai disagreed with the FCC’s rules, arguing that the new rules disproportionately burden ISPs because the requirements are more prescriptive and burdensome than rules governing edge providers.

CONNECT AMERICA FUND PHASE II REVERSE AUCTION

What has the FCC Done? The FCC modernized its universal service regime to offer financial support to entities willing and able to provide voice and broadband service in high-cost areas that currently lack such services. Support was originally made available to pricecap carriers on a statewide basis. The price cap carriers accepted over $1.75 billion in annual funding, leaving approximately $215 million in annual funding available for the CAF II reverse auction. The FCC released a Report and Order and Further Notice of Proposed Rulemaking in May 2016 resolving many issues and requesting comment on how to weight bids focusing on technologically neutral download speeds and latency metrics for the planned single, multi-round CAF II reverse auction What Did Pai Say Then? Commissioner Pai supported the Commission’s actions, and only wished

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the FCC had moved faster and incentivized providers to offer better service in rural America. Excerpt from Pai’s Statement: “To be sure, I don’t agree with every aspect of this Order. For example, I had hoped to follow through much more quickly on our five-year-old promise to adopt these competitive bidding rules. And I would have preferred to give bidders even more flexibility and incentive to offer the very best service possible to rural America. But that is the nature of compromise….” What has Pai Said Since Then? One of Commissioner Pai’s main goals has been to promote broadband in rural areas. He grew up in Kansas and has recognized hurdles to broadband deployment in rural America, including West Virginia, Iowa, and other underserved parts of the country. He recently proposed a Digital Empowerment Agenda to promote broadband adoption in rural areas. Prognosis: Chairman Pai will have the opportunity to support deployment of broadband in rural America by leading the Commission in adopting rules for the CAF II reverse auction. We expect this to be one of his main priorities. Wesley Wright is a Partner in the Telecommunications Practice Group of Keller and Heckman LLP in Washington, D.C. Mr. Wright advises critical infrastructure and public safety companies on FCC rules related to wireless spectrum, broadband services, 911 regulations, and other FCC rules.

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DATA CENTRE INTERCONNECTIVITY

ENABLING SUBSEA NETWORKS TO LOWER COST, WIDEN FOOTPRINT AND EXTEND LONG HAUL CAPACITY BY NIGEL BAYLIFF

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ccording to TeleGeography, two years ago, private network bandwidth along the transatlantic corridor connecting North America to Europe exceeded internet bandwidth for the first time. The telecom market research and consulting firm also forecast that by 2019, private networks will account for the majority of international bandwidth usage. In view of this trend, landing new submarine cables in or near large cities has become the prevailing wisdom, given that data centres are located within these cities. Moreover, inland terrestrial networks can then connect users to the content within these data centres. Given the Point of Presence (PoP) to PoP requirements of data centre interconnectivity (DCI), all parts of the end-to-end network must be seamlessly interconnected and virtualized. For submarine cables targeted primarily at DCI applications, it makes sense to consider moving Submarine Line Terminating Equipment (SLTE) out of traditional Cable Landing Stations (CLS) and directly into the data centre. While some equipment will remain in the CLS, such as Power Feed Equipment (PFE), this is a viable option when using the latest generation of SLTE that is capable of crossing vast transoceanic distances with sufficient remaining margin to go hundreds of kilometers further inland on both ends of a submarine cable. In the past, whereby networks were comprised of SLTE and the two Cable Landing Stations, systems were extended from the CLS out to the PoPs, or carriers routed to the cable from the PoPs, and there was always an interface point for the optical equipment to extend that reach. This necessitated more complex equipment located in the CLS, which then required support by an operational staff. Additionally, if regenerating in the cable landing stations, the cable owner-operator

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would need to purchase expensive, duplicate transmission equipment. Lower Costs, a No-Brainer Cost, as always in the world of connectivity, is the major driver for DCI. Today, companies seek the lowest cost per bit, and by being able to connect data centre to data centre without intermediate interfaces, cable owner-operators can significantly reduce the price of 10G, 100G, or terabytes capacities. While the technical aspects are dealt with at the design stage, it’s very important that the data centres a cable system connects to are wellserved with terrestrial networks, and within the data centres, that their cross-connects and extended local loops are adequately robust as well. Therefore, in the early stages of a network, it’s critical to enable the routes that are most commonly used by carriers, global data centres, cloud-based networks, financial services companies, content providers and the global media. Then, as the system progresses, its usage increases and inquiries come from other data centres, subsea owner-operators begin to look at “PoPing” other locations as well. Hence, it’s more of a commercial and customer-driven decision than a technical decision. From a technical point of view, DCI is not that challenging, and, not especially new. In fact, Global Crossing’s Atlantic Crossing 1 (AC1) undersea fibre optic cable system featured DCI, connecting to a data centre in The Netherlands approximately eight years ago.

COHERENT TECHNOLOGY, THE DIFFERENCE-MAKER

What’s happened more recently to make DCI more attractive is the advent of coherent technology, which improves how far a subsea cable can extend and how much capacity can be made available on a given system. While subsea cables can possess very large amounts of capacity over shorter distances, the real challenge 39


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is trying to extend networks over a longer distance whereby a number of technical factors come into play. On any submarine cable, there’s a trade-off between distance and capacity, but with coherent systems, there’s a less significant reduction on the final capacity when a cable is extended. Hence, the prevailing approach, unlike in the subsea cable systems of the past, is to over-design the subsea section so that it can be extended as well as meet future capacity demands. The main impact on subsea cable project timeframes is acquiring suitable terrestrial routes and suitable amplifier sites. When you build a submarine cable system, there are a number of elements that can be controlled, but only to a point. Once the cable system extends into the terrestrial domain, owner-operators are frequently governed by legacy fibre and by the geolocation of fixed, physical buildings. If relying 40

on legacy fibre, a cable system is obviously not getting the best fibre for the cable design. So, one of the challenges is acquiring or partnering with the best network possible on the terrestrial side. In fact, for many subsea cable owner-operators acquiring fibre and determining the optimal physical sites is one of the most time-consuming factors. The good news is that although the cable systems of the past were point-to-point systems with a definite termination point in the CLS, today, cables can terminate in multiple data centres, and, as in the case of transatlantic systems, multiple facilities on either side of the pond. Also, because of the nature of the new fibre optic technology, cable owner-operators can take parts of the spectrum and terminate them in different buildings, so there’s no definitive end-point, but instead, multiple endpoints.

IT’S ABOUT THE NEIGHBOURHOOD

When subsea cable owner-operators are considering which data centres to connect into, there are several decision points that make up their criteria. The first is the cost of collocation and power, a monthly recurring charge which can be substantial. The other, related to ongoing growth, is the cost of cross-connects, which varies significantly. This is particularly the case on systems linking Europe and the U.S., since every time a cable owner-operator turns up a customer, a fee is involved. The third determining factor is the nature of the occupants of the data centre. Cable owner-operators want to interconnect to data centres where they have the ability to sell to key players in the industry. In order to do so, they have to be in the same building. As one subsea cable expert puts it, it’s all about the


neighbourhood, who’s in the neighbourhood and the quality of the neighbourhood. Here, again, DCI offers cable owner-operators an advantage. In so far as a cable system’s prospective customers are concerned, one of the inherent benefits of DCI as opposed to CLS to CLS networks that terminate in one place, and therefore provided a limited customer base, is that DCI automatically enables access to a larger footprint of customers. This is because the network you’re building, data centre to data centre, offers multiple termination points, rather than a point-topoint system.

PARDON MY BULLDOZER

Is a cable system that deploys DCI faster or more reliable? The latency differences of a DCI-enabled subsea network are so minor as to be negligible, except to high-frequency traders whose business can supposedly go bull or bear given just a millisecond’s difference in connectivity. As for reliability, one of the ironic downsides of extending a subsea cable into a terrestrial network is that, given improved submarine burial techniques, routing and ca-

ble armouring, a terrestrial cable is more likely to experience damage from an errant bulldozer conducting civil works excavation than it is from a misguided ship, misplaced anchor or poorly towed fishing net.

THE CLOUD IS UNDER THE OCEAN

It’s amazing to consider that just ten years ago, according to figures from the International Cable Protection Committee, submarine cables carried just one per cent of the world’s data traffic. Today, 99 percent of all transcontinental data traffic goes through undersea cables. Against this backdrop, Cisco predicts that by 2020, 68 percent of all cloud workloads will be in public cloud data centres, 32 percent of the cloud workloads will be in private cloud data centres, and annual global cloud IP traffic will reach 14.1 ZB by the end of 2020, up from 3.9 ZB per year just two years ago. As is often said, the cloud is actually under the ocean, meaning the globalization of business and enterprise communications will rely more and more upon the existing undersea arteries of commerce and connectivity. The advent of coher-

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ent technology, software-defined networking and 8QAM (quadrature amplitude modulation) technology will all contribute to subsea cable systems’ ability to extend long-haul network capacity to meet the present and future needs of international data centre interconnect and web-scale customers. Moreover, we can anticipate that additional terrestrial extensions, stubbed branching units to facilitate future extensions of systems, and new cable builds will become necessary to keep pace with the relentlessly growing demand.

Nigel Bayliff, CEO of Aqua Comms DAC, is a global telecom industry veteran of 25-plus years’ experience. He has been an advisor and consultant to cable development, private equity and government clients, and Vice-Chairman of the United Nations Joint Task Force that examined the gathering of disaster mitigation and climate information from the global web of undersea cable systems. Mr. Bayliff also served as CEO and board member of Huawei Marine Networks, where he introduced several major, technological advances into the marketplace. Previously, he was a member of the executive team of FLAG Telecom where he was an officer and deputy chairman for several group companies, and was responsible for the construction and operation of the FLAG Global Network, which encompasses 65,000 km of submarine cable systems and provides carrier-grade connectivity services to 40 countries. In 2006, he was elected as a Fellow of the UK Institute of Engineering Technology.

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CUBA UP, VIETNAM DOWN: RECENT SUBSEA CABLE DEVELOPMENTS MAPPING THE OCEAN BY DOUG MADORY

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ecent submarine cable-related developments have impacted internet connectivity in locales as diverse as Vietnam, Cuba, India, the Marshall Islands and Russia’s Kamchatka Peninsula. In this blog post, we report on positive developments in Cuba and Russia and a few notable cable failures in other parts of the world.

VIETNAM

The internet of Vietnam got off to a shaky start in 2017 when, on 8 January, the America-Asia Gateway (AAG) submarine cable experienced yet another of its many failures. In September of last year, Tuoi Tre News reported that AAG had suffered its 10th failure in three years, prompting VietnamNet to ask the question: Why does the AAG underwater cable have to be repaired so often?  Over the years, we have frequently analyzed these cable breaks.  Internet performance in Ho Chi Minh City suffers greatly during these unfortunate episodes.  For Saigontourist Cable Television (SCTV), the recent break meant a brief dis-

ruption in connectivity and the loss of NTT transit as illustrated below. Following this year’s loss of AAG, the TGN-Intra Asia (IA) cable also suffered a failure, compounding the problems for Vietnamese

internet connectivity. Tuoi Tre News reported: Intra Asia (IA) cable network was broken on Tuesday morning, compromising services provided by internet operators in Vietnam, especially Viettel. The following graphic shows the impact of TGN-IA’s breakdown on military-run Viettel, as it failed in two distinct phases. Here’s a view of the impact from Dyn’s Internet Intelligence, showing a spike in daily median latencies from Singapore to Ho Chi Minh City: In recent discussions about the situation in Vietnam, submarine cable expert and good friend Julian Rawle recently told me: Vietnam has four submarine connections.  The only one unaffected is SEA-ME-WE-3, the oldest and most capacity-constrained cable.  Vietnam presumably has terrestrial connections to Hong Kong via China in the North but this is probably an expensive option and adds to latency.  AAE-1 (RFS end 2017?) will alleviate the situation and there are rumors of another regional sys43


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tem being planned to connect Vietnam to Singapore. Vietnam is living proof that you can never have enough redundancy!

CUBA

While Vietnam struggles through its latest bout of submarine cable issues, the internet of Cuba continues to make incremental steps towards improved international connectivity. In October, we tweeted that Cuba’s state telecom ETECSA had gained its first new transit provider, Curaçao-based UTS, since we broke the news that the ALBA-1 submarine cable had been activated in 2013. In December, Google announced that it had reached a deal with ETECSA to host Google Global Cache servers inside Cuba.  The primary benefit of GGC servers is caching traffic-intensive Youtube videos – and the benefit can be tremendous.  Instead of pulling a popular video over the ALBA-1 submarine cable say 1,000 times in a day, it can be pulled once, cached, then quickly delivered from GGC servers inside ETECSA another 999 times. While the primary challenge to improving the internet in Cuba remains expanding the access layer so

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that more people can directly connect via fixed line and mobile services, local hosting of content is also an important step in the development of this island nation’s internet. (Note: As of this writing, we haven’t yet detected evidence that those GGC servers are active, but it is reasonable to expect them to come online any day.)

More recently, we observed ETECSA gain a new transit provider, C&W Networks, formerly Columbus Networks. The addition of C&W Networks marks the first time a U.S. telecommunications firm (C&W Networks is owned by Liberty Global) has provided direct transit to Cuba’s state telecom ETECSA.  It is also perhaps the first


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it is being served from Boca Raton, Florida and reaches Havana in 35ms round-trip, making it the lowest-latency link to the United States. See the following example traceroute. We suspect that C&W Networks may be reaching Cuba using their Colombia-Florida Subsea Fiber (CFX-1) cable to reach Jamaica before cross-connecting to ALBA-1‘s backup leg that also lands in Jamaica.  The Jamaica leg of ALBA-1 was also briefly activated in 2013.

OTHER RECENT SUBMARINE CABLE EVENTS

time a U.S. telecommunications firm has directly provided internet service into Cuba since my friend Jesus Martinez established the first Cuban internet connection to the outside world in 1996 using a satellite link from Sprint. At any rate, here’s how we see Cuban BGP routes being transited over the past week. C&W Networks

and ETECSA first established a BGP adjacency at exactly 16:28:17 UTC (11:28:17am local) on 10 January 2017 and the use of this new connection has been steadily increasing as more Cuban networks are routed through C&W Networks (in green below). Another item to note with this new transit service to Cuba is that

As new submarine cable systems continue to come online (SeaMeWe-5 and AAE-1 being the latest major projects), the internet continues to become more resilient and less susceptible to widespread impairment due to the inevitable submarine cable cut. The last such catastrophic incident was perhaps the sabotage of SeaMeWe-4 in 2013. Nevertheless, cable failures (and activations!) still happen with some regularity.  Here’s a quick recap of some other interesting submarine cable developments in recent months.

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INDIA

On 12 December, Cyclone Vardah damaged the i2i submarine cable causing performance problems for traffic traversing Chennai, India. Below is a visualization from Dyn’s Internet Intelligence showing the impact on latencies from Singa-

pore to Chennai as a result of this cable break.

MARSHALL ISLANDS

The submarine cable serving the Marshall Islands in the Pacific Ocean suffered a cut on 28 December 2016. The national telecom shifted transit to satellite and blocked the stream-

ing of movies and video to conserve bandwidth. The full timeline of the submarine cable outage and subsequent restoration is depicted in the graphic below.

KAMCHATKA PENINSULA

And finally to end on a high note — a submarine cable activation! The Kamchatka Peninsula is a remote and thinly-populated region in the Russian Far East.  Until recently this region received its internet service through a high-latency satellite link. Last year, Russian state telecom Rostelecom contracted with Huawei Marine to build a new submarine cable to improve connectivity in this region. In September, Huawei Marine announced the cable’s completion and, in October 2016, we saw it flicker to life.  The local Russian ISP announced Быстрый Интернет уже у нас!  (“Fast Internet is finally here!”)  The activation of this cable is depicted below.

CONCLUSION

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In an analysis such as this, one that spans geography, it is interesting to reflect on the human endeavor that is the global internet,


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namely, engineers in all corners of the globe actively working to better connect humanity. It is a privilege to be in the position we’re in — documenting on this blog the interest-

ing developments in this endeavor as it unfolds and we look forward to continuing to do so into the future.

Doug Madory is a Director of Internet Analysis at Dyn where he works on Internet infrastructure analysis projects. Doug has a special interest in mapping the logical Internet to the physical lines that connect it together, with a focus on submarine cables.

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THE VITAL IMPORTANCE OF SUBSEA CABLES FOR THE TELECOMMUNICATIONS INDUSTRY BY CAROLINE ELLIOTT

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T

elecommunications cables have been present on the seabed since the instalment of the first transatlantic telegraph cable in the mid-19th century. However, since 1988 these cables have been fibre optic rather than copper wire, ensuring much greater efficiency and the bandwidth required to carry international Internet traffic. There are now two potential technologies to transfer data across oceans and to drive digital globalization, namely satellites and subsea cables. Yet it is believed that by 2012 subsea cables carried about 97 percent of all international data traffic. Internet connections are now shared among the continents through the subsea cables which connect all the continents and countries within. This is because modern fibre optic technology now ensures that subsea cables are faster, more reliable and cost effective than the only alternative of satellite technology. Subsea cables on average transfer IP packages long distances five times faster than satellites, and the costs of subsea cables carrying international data traffic are vastly lower, making

satellites a non-economic option. Further, subsea cables are generally more reliable. The effective operational lifetime of subsea cables is approximately twice as long as that of an average satellite. The subsea cables industry is of vital importance to economies across the world, including that of the UK. However, unlike other industries that are so key, this is an industry that remains unfamiliar to many. Globalization patterns are now being dictated by digitalized international activities. The world is becoming more deeply connected by international data flows with less developed countries and smaller businesses finding it easier to engage in data exchange. Accessibility to the Internet allows small and medium sized businesses to contribute to global economic growth by trading, exchange of ideas, innovation collaboration and technology development in multiple economic sectors around the world. Even a small enterprise nowadays has a chance to operate globally. How information and transactions are carried internationally via the Internet

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is of vital importance to the global economy, and as we’ve seen subsea cables are essential for this. The Internet is a significant input into the UK’s economy and has rapidly become essential. The UK is the largest per capita e-commerce market and second largest online advertising market globally. The Boston Consulting Group (BCG) anticipated the UK Internet economic sector to contribute about £180 billion in 2015, an 80 percent increase from 2010. Similarly, in 2011, Frontier Economics estimated that the Internet’s contribution to the UK economy was estimated to rise to £221 billion by 2016. Yet, the BCG has highlighted that standard GDP measures do not capture all consumer and business economic impacts of the Internet sector. The BCG estimates that a 10 percent increase in e-procurement activities also results in a 2.6 percent increase in productivity for the manufacturing sector. E-procurement lowers transaction costs, facilitates information exchange across supply chains, and automates purchases. Moreover, UK small and medium sized enterpris-

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es (SMEs), a key economic growth driver globally, use modern communication technology to expand geographically without actual physical presence, ensuring greater collaboration with customers, suppliers, and partners Recent research undertaken at the University of Huddersfield included a preliminary estimate of the economic value of the UK telecommunications subsea cables industry to the UK digital economy. The research concluded that in 2015, £62.8 billion of UK economic activity relied on telecommunications subsea cables. This is calculated as: The UK Internet economy in 2015 was valued at £180 billion pa1 36 percent of UK Internet traffic is international, resulting in a value of it of £64.8 billion pa2 97 percent of this international traffic is routed through subsea cables3, resulting in a value of £62.8 billion pa Research at the University of Huddersfield went to examine in more detail the benefits of telecommunications subsea cables to the 1 BCG (2015) as reported in https://www.techuk.org/insights/ news/item/4075-uk-s-digital-economy-is-world-leading-in-terms-ofproportion-of-gdp

2 https://oecdinsights.org/2014/02/18/beyond-the-first-mile-whereyour-internet-comes-from/ 3 Asian-Pacific Economic Cooperation (APEC) (2012) http://www. detecon.com/ap/files/2013_psu_ percent20Submarine-Cables.pdf

50

UK economy. A stakeholder analysis undertaken was crucial for understanding the complex set of relationships between multiple stakeholders in the UK telecommunications industry. This analysis highlighted a large number of benefits of the subsea cables industry that are difficult to quantify. Specifically, in the telecommunications sector there are benefits to businesses and households from better quality and speed of digital communication, as well as improved reliability of Internet connectivity. These benefits translate into improved business efficiency, improved ability to manage people and processes, as well as improved opportunities for the international communication of product and process innovations. Once all the relevant stakeholders in the telecommunications subsea cables industry had been identified, a statistical model was built reflecting their interrelationships, so that simulations could be performed further to identify potential impacts of this industry to the UK macro-economy as well as to particular individual economic sectors. From the simulations results significant benefits from the existence and activities of the UK telecommunications subsea cables industry were identified for the UK labor market;

Government revenues; UK GDP; households and the financial and insurance sectors. It should be noted that the research also highlighted the importance of subsea cables for the UK energy industry, crucial for electricity imports and exports, as well as for the transmission of electricity generated from offshore wind farms. A challenge has arisen to calculating the value of the UK subsea cables industry to the UK telecommunications (and energy) sector from the uncertainty surrounding the impact of ‘Brexit’. Uncertainty surrounds changes in legislation concerning the laying and maintenance of subsea cables that are expected in light of Brexit. However, in this respect Brexit offers an opportunity for greater transparency of legislation which would benefit the subsea industry, and in turn the telecommunications (and energy) sectors. However, one thing that remains certain is that for the foreseeable future the subsea cables industry will remain an often little known but key element to the working, growth and development of the UK economy. Caroline Elliott is Professor of Industrial Economics at the University of Huddersfield Business School. This article highlights key results from a research project into the economic value and broader impacts of the UK subsea cables industry for the telecommunications and energy sectors. The research was co-authored with Omar Al-Tabbaar; Artur Semeyutin and Eric Tchouamou Njoya, all of the Business School, University of Huddersfield.


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FROM THE CONFERENCE DIRECTOR BY CHRISTOPHER NOYES

H

ello, I am Christopher Noyes, the newest member of the SubTel Forum team. As Conference Director, I joined the team a year ago, to assist SubTel in cultivating the conference industry for our segment of telecommunications within the organization. Having produced meetings, conferences, and special events for Fortune 500 companies ranging from meeting management, conference production, promotions and tradeshows, we are leveraging my experience in producing conferences for the submarine telecommunications cables industry. In April of last year, I had the pleasure to attend SubOptic 2016 in Dubai, and saw first-hand the SubOptic Conference. To experience the industry support for the conference and learning of the rich history, it’s great to know that SubOptic is moving forward in the formation of an official trade organization. As the trade organization is in the initial formation stages, SubTel Forum was tasked with the logistical support and production of SubOptic 2019. Late last year, we began working with the Executive Committee to find a location for the tri-annual SubOptic Conference. There were

many variables to consider since this city will host the inaugural conference of the Official SubOptic Association. In conjunction with the Executive Committee and the Conference Host, Ciena, New Orleans, Louisiana, United States was chosen; so save April 7-11, 2019. The conference will be located at the New Orleans Marriott in the heart of the French Quarter. New Orleans is better known as the “Big Easy,” and has been the inspiration of big ideas. The Marriott will offer extraordinary views of the Mississippi River and the French Quarter to help you inspire the next stage in the SubOptic history. With the Louis Armstrong New Orleans International Airport undergoing a billion-dollar expansion which includes a new terminal thereby increasing the airport capacity with an additional 30 gates. British Airways has already begun leasing gates for non-stop flights from London. In the coming months, you will continue to hear from me with updates on SubOptic 2019. The next phase will be the release of the exhibit floor diagram; so be sure to reserve your spot early for SubOptic 2019.

This is one conference you will not want to miss!

Christopher Noyes began his career in 1996 as the Meeting and Incentive Director for Spectrum Industries, providing company sales and incentives meetings. His experience includes producing meetings, trade shows and events in USA, Mexico, Bahamas, Canada, and Holland, and has produced meetings and events for the Urban Land Institute, Coca-Cola, Medtronic, Bank of America JER Partners, Legg Mason Wood Walker, and Avery Communications. He possesses the international designation of Certified Meeting Professional form the Convention Industry Council, and joined Submarine Telecoms Forum in 2016 as Conference Director to help develop and lead the company’s venture, STF Events.

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BACK REFLECTION:

ARE THE ONE MILLION KM DEPLOYED SUBMARINE CABLE GOOD FOR THE PLANET? BY FRANCIS CHARPENTIER 52


INTRODUCTORY REMARKS BY JOSÉ CHESNOY Ecological awareness becomes a universal topic for all activities. Telecommunications are not an exception. Concerning submarine cables that had become now the backbone of our Internet world, ecological awareness encompass regulation, starting from cable landing permits, but also now recovery of material from decommissioned cables, or awareness of use of material respecting long term sourcing, without missing optimization of the end to end carbon footprint, or design for recycling. Focusing on the optical cable business, the ecological awareness is now at the crossroad between today evolving regulations, and price to pay for our 25 years’ optical history, following more than one million kilometers of cables let behind us in the oceans, and after 100 years of deployment of all cable generations that had let globally close to two million kilometers of cables at the sea bottom. It is time to measure the impact of our business on the overall human impact on climate. And we are sure that new regulations and legal rules will come to ensure that our submarine cables activity comply with the necessary changes. In such conditions, and for this special issue of Subtel Forum magazine on “Finance & Legal”, we have the honor to host Francis Charpentier in the Back Reflection chapter of this magazine. After just ending a career in Orange where he was leading the submarine systems purchasing and deployment activities, he now spends the best of his time on submarine cables ecological awareness. He will review here for us the topic fed by his own reflection.

D

uring the last SubOptic 2016 Conference in Dubai, brilliant presentations were made about the exponential growth of the international submarine transmission capacity needs, and how technology copes with them. The benefits of deploying the Information Society to the entire planet, with the vision of all human beings interconnected were depicted with a truly optimistic vision. However, we are facing a contradiction between such unlimited growth and two of the half a dozen severe threats for the future generations: climate change and depletion of non-renewable resources. Largely more than one million kilometers of optical submarine cables have been deployed since 20 years and there is no pause expected. A key question is to understand how this massive deployment of submarine cables impacts our eco-system, and how manage properly its ecological balance sheet.

CRAIG DONOVAN ECOSTUDY IN 2009

Submarine cable systems are a key part of Information and Communications Technologies (ICT), conveying the vast majority of the international communications, as recalled in the new edition of the reference handbook on submarine cable systems [1]. In this article, we intend to revisit the worldwide environmental impact of the deployed submarine cable systems, for which

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the main published work is the master thesis conducted by Craig Donovan at Ericsson Research and KTH [2] in 2009. We focus on resource depletion and climate change, and we do not address the issues related to the disturbance caused by cables to the seabed and to submarine life, this aspect being addressed by [9]. In his study [2], Donovan provides a thorough Life Cycle Analysis (LCA) of submarine cable systems, encompassing all phases of their lifecycle, including their full recycling at the end of their life, which is never done in practice, except within the territorial waters when required by authorities, but the LCA exercise requires to include it. The task is complex and a number of simplifications were made but the study provides a good order of magnitude and a detailed picture of the environmental impact of all the components of a cable system. To conduct the LCA, an average cable system architecture was defined, including an average mix of cable types and the average rule of one cable station for 2000 km, and a 13 years’ lifetime was assumed. Donovan’s conclusion was that around 66 percent of the impacts came from the 13 years use phase, due to the marine repair operations and to the electric supply of the system provided by cable the stations. Note that if we assume a 25 years use phase (equal to the design life time specified by cable providers), the use phase impacts amount to 80 percent of the global impacts and

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the remaining overhead impacts from the cable manufacturing and deployment come down to only 20 percent. In fact, reusing the hypothesis of Craig, the increase of the lifetime of the cable, possibly beyond 25 years, reduces the yearly environmental footprint of the cable by spreading this overhead impact. It would be of great interest to revisit this LCA, nearly 10 years after, since the transmission technology has moved from 10G/s at that time to 100 Gb/s today, and to try and improve the precision of the analysis where simplifications were made. Yet our hypothesis in the following is that this would not significantly change the conclusions.

USAGE OF ENERGY AND IMPACT ON THE GLOBAL WARMING

Since it has a direct impact on the global warming, let’s look first at the primary energy spent in one year of operations (the use phase) for the 1 000 000 km of active cables worldwide. It consists mainly of: »» the marine fuel used for the maintenance and repair, estimated 67 tons of fuel per 1000 km (for an average of 7.5 days of repair per year), which corresponds to about 800 MWh of energy, thus 800 GWh for one million km worldwide »» the electricity used for the cable stations is about 440 MWh of electrical power per 1000 km (with an estimated average power 100kW for one station per 2000 km, this figure being significantly lower than the one taken by Donovan which we found excessive from our experience). This corresponds to 440 GWh of electrical energy for one million km worldwide, which uses about 1,3

54

TWh of primary energy required to produce this electricity (using an electrical energy mix conversion factor of 3) We thus obtain a rough estimation of 2 TWh of primary energy necessary to operate the worldwide submarine cables per year for the use phase, and if we annualize the overhead phases (a total of 13 TWh for the extraction of raw materials, design and manufacturing, installation, decommissioning and recycling), we come up with a yearly figure of either 3 TWh, or 2.5 TWh of primary energy, depending on if we assume a 13 years or a 25 years’ lifetime. This is equal to or less than 0,002 percent of the total primary energy spent worldwide in a year! (total primary energy = 13 GTOE (TOE= Ton of Oil Equivalent) = 150 000 TWh) [3]. This figure gives a reasonable approximation of the emissions of Green-House Gases (GHG), so we see this is equal to or less than 1/1000 of the 2 percent CHG emissions estimated for ICT as a whole [4]. The telecommunications network being 25 percent of ICT, submarine networks appear to be a marginal 1/250 of the GHG emissions of the entire telecommunications networks. Such a marginal energy consumption is not quite a miracle, it is due to the energy efficiency of submarine optical fiber systems, to the low intrinsic volume of the systems (a cable is a small, light, compact technical system) and also due to the fact that the submarine cable network is much less dense a network than the terrestrial core and access networks that link the ends users.

for the electronic parts contained in the terminal equipment and the repeaters. The former represents the larger part in volume, they consist of steel, copper, high density polyethylene (HD-PE) and polypropylene (PP), fiber glass and jelly. The quantity of metals can be estimated from the usual composition of LW, LWP, SA and DA cables. Copper usage is the 1mm thin cylinder 6 mm inner radius times the length: for 1000 km we need 41 cubic meters, 41 000 cubic meters for the worldwide million km, which amounts to a total mass of 360 000 tons used in 25 years, a mere 2 percent of the world wide 15 M tons’ production in a single year. However, copper, although being a “big metal” in the sense that it is a large world resources, is intensively exploited, and current exploitable reserves are estimated to last 30 years. In the fu-

USAGE OF NONRENEWABLE MATERIALS

Let’s now look at the use of the raw materials for submarine cable manufacturing. Basically there are materials for the cable and materials

Submarine cables require fewer kind of minerals than terminal equipment


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A single large cableship with three internal cable tanks can store up to 9000 km of a cable ready to lay

ture, when facing shortages in copper supply, the submarine cable industry will likely have to recycle its own copper, by recovering it from its “submarine mine” of deployed cables, or use soon substitute conductor materials such as aluminum, another “big metal” with a much longer exploitation horizon. The usage of steel which is essentially made of iron is larger than the usage of copper. From the usual geometry of LW and SA cables, we obtain an estimate for 200 cubic meters for 1000 km of cable, a volume five times larger than for copper, amounting to a total mass of 1.6 million tons of iron for the whole cable footprint. Iron being the “biggest metal” on earth, this represents a mere 1/1000 of the 1.7 billion tons’ yearly production. The need to recycle steel is much more remote than for copper. As for plastics, similar calculations lead to an estimate of 750 000

cubic meters of HD-PE which is in the range of 1-2 percent of its yearly production. This also corresponds to twice the same amount of crude oil, translating into 0,0015 percent of the crude yearly oil production. This is roughly half of the crude oil required to operate the cable ships yearly. But we should be aware that when crude oil will become scarce in the medium term, the procurement of plastic materials will become an issue. To visualize the quantity of the raw cable materials, let’s take a look at the picture of a cable ship. The required volume for a transpacific 9 000 km cable, roughly 9 000 cubic meters, can fit in three cable tanks and is today negligible with respect to the yearly production of such materials. While we are looking at the ship, let us step back to energy consumption. Most part of the energy required for laying and repairing ca-

bles is to move its huge mass across the sea. In the case of surface lays, the energy to lay and lift the cable from deep seas is negligible because of the small mass of the cable system. On the other hand, a large amount of energy used is for burying the cable pulling a plough across the seabed. Let’s now look at the materials for the electronic equipment. Although this corresponds to a much smaller volume, it is a more complex story. While the cable uses only half a dozen common elements of the Mendeleiev table, electronic equipment nowadays uses many more [5], many of which are small or precious elements. From that respect, cable systems are no different for the ICT equipment in general, and will have to cope with increasing scarcity of critical resources, especially for the following elements: »» gold, silver and tin are required for the bonding of

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the printed circuit boards (PCBs) with their electronic chips but their world reserve horizon are less than 20 years »» indium is required for optical lasers and detectors but as a sub product of zinc mining, its world reserve horizon is less than 20 years »» antimony and brome are requited for flame retardants but their world reserve horizons are also limited Paradoxically, a so-called “rare earth” element such as Erbium, needed for the repeater amplifiers, is not rare so it is not critical in regards of the world reserves. Much research is going to the exploitation of so-called “urban mines” containing the WEEE (Waste Electric and Electronic Equipment), but this requires to develop much

more efficient recycling technology to separate the intimately blended elements of PCBs. Submarine cables as the rest of the ICT sector rely critically on breakthroughs in the recycling of electronics, which also includes the “design for recycling” (DfR) approach in the electronics manufacturing industry [5]. Actually, DfR is one challenge that submarine cable system manufacturers should take up!

INDIRECT IMPACTS OF CABLE SYSTEMS ON THE REST OF THE ECONOMY

As we have seen up to now, taken in isolation, the contribution of cable systems to climate change and to global resources depletion is negligible, when compared to the overall human activities. For instance, they appear as green systems com-

Pulling the plough across the seabed requires a big amount of energy

56

pared to many other systems, such as the air or marine travel system. But, as a keystone of the entire digital economy, what is their indirect impact on it? There are some applications of ICT such as telepresence, as mentioned in the Donovan’s study in 2009, but more generally conference calls and email exchange of information that cut down dramatically the need for travelling. This takes place in the professional world, it is definitely a positive impact which saves energy consumption and reduces the emission of greenhouse gases. But this is only part of the picture. There are many applications triggered by the Internet that have negative impact. Let’s think simply about the increased efficiency in advertising commercial products, or think about e-commerce which makes it so much easier to order an


air travel for leisure, or think about storing masse of photos and videos in datacenters. While companies are using Internet to improve their efficiency, which helps them to reduce their carbon footprint, Internet is boosting general public mass consumption, which increases the carbon footprint of individuals. Some groups such as the Global e-Sustainability Initiative (GeSI) [6] have a very optimistic view on the positive contribution of the ICT, predicting that ICT will enable us to maintain GHG emission at the same level for the 15 coming years. But some other experts such as the Berkeley Lab stress in their 2016 report [8] that the indirect impact are so complex that we have no evidence whether the impact of ICT is positive of negative! What are the big statistics? The world population, today 7.3 billion people, is increasing annually by 1.2 percent, final energy consumption (which includes electricity) is increasing by 1.5 percent [3], electricity production is increasing by 3.5 percent, ICT electricity consumption is increasing by 6.6 percent [4] Internet users are increasing at a rough 10 percent [7]. Even though there are remarkable energy efficiency achievements for the current decade in ICT areas such as datacenters [8], the footprint of ICT is increasing steadily. In this context, ICT as a technological infrastructure is like the infrastructure of transports, and cable systems are like cars. They are just very advanced tools; they have no intrinsic positive or negative value. The value of those tools comes from the people’s behavior, and depends on whether, as a global population, they use the tools for useful or wasteful purposes. This is not a challenge for the cable system community, it is a challenge for ICT service providers that should refrain from marketing wasteful services and for the consumers that should refrain from buying them.

CONCLUSION “BACK REFLECTION”

Early concerns about the sustainability of modern economy were expressed in the “Limits to Growth” controversial report commissioned by the Club of Rome in 1972. At that moment not Internet nor optical cable systems did exist. More recently, for the last twenty years of intensive deployment of Internet and submarine cables, little concern was expressed about sustainability. The only environmental concern was addressed when preparing the environmental impact assessment (EIA) studies required for permitting. Nowadays the concern is building up as the medium term systemic shortages are in perspective due to exponential exploitation of mineral resources. The environmental footprint of cable systems is negligible per se, but the questions remains open whether the Internet which they are part of is part of the problem or of the solution. The author would like to thank José Chesnoy for giving him the opportunity to write this article for Subtel Forum and for his insight and valuable comments. He is also indebted to all his colleagues and partners for fruitful discussions throughout his career in submarine cables.

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[5] “Metal recycling”, UNEP report, 2013 [6] “Smarter2030”, Global e-Sustainability Initiative (GeSI) report, 2015 [7] “ICT Facts and Figures 2016”, ITU-T report, 2016 [8] “US Datacenter energy usage report”, Berkeley Lab, 2016 [9] “Routledge handbook of ocean resources and management – Chapter 23: Subsea telecommunications”, Lionel Carter and Douglas Burnett, 2015

Francis Charpentier is currently an independent member of various think tanks on environmental issues and sustainable development. Previously, after holding various positions in France Telecom research and development laboratories since 1994, and creating a startup in speech recognition in 2000, he joined the submarine cable community in 2009, and lead from 2009 to 2016 the submarine systems purchasing and deployment activities for Orange, taking part actively to the Procurement Groups of a dozen submarine cable systems.

REFERENCES

[1] “Undersea fiber communications systems”, 2nd edition, J. Chesnoy editor, Elsevier 2016 [2] “Twenty thousand leagues under the sea: a life cycle assessment of submarine cable systems”, Craig Donovan master’s thesis, Ericsson research and KTH, Stockholm, 2009 [3] “Keyworld energy statistics”, IEA report, 2016 [4] “Overview of ICT energy consumption”, Bart Lannoo editor, project EINS report of FP7 network of excellence in Internet Sciences, 2013

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SUBMARINE TELECOMS FORUM

ADVERTISER’S CORNER BY KRISITAN NIELSEN

W

ith Spring right around the corner, it feels wholly appropriate to talk a little bit about the changes we’re undergoing at SubTel Forum! As I’ve talked about before, we’re in the middle of reworking the company structure to better suit the needs of our readers and consumers of our products. To date, we’ve rolled out STF Inc. (stf-inc.com) which serves as the proverbial mothership for all of the newly formed divisions, STF Analytics (stfanalytics.com) which is responsible for the maintenance and support of the Submarine Cable Database, creation of custom reports and content for many SubTel Forum publications. More recently, we’ve announced the creation of STF Events (stfevents. com), which is handling the roll-out and management of the SubOptic 2019 conference. STF Events is head up by Chris Noyes, who will get to know very well in his new regular 60

piece in the magazine. Every issue Chris will be giving you the low-down on where the conference preparations are and what’s coming up. With all of the amazing work the SubTel teams are putting in, we’re still bubbling along with our regularly scheduled publications. The Almanac was just released, you’ll notice the new format and layout of the systems. Our next publications are in May, but that doesn’t mean there aren’t any good marketing opportunities! Along with the website, the Web Banners have seen a complete facelift, offering different placements and pricing plans. The Online Map is bustling along, offering awesome visibility to sponsors. Any information and scheduling for our publications can always be found on our current Media Kit. Thanks for reading, we have even more changes coming soon!

Kristian Nielsen literally grew up in the business since his first ‘romp’ on a BTM cableship in Southampton at age 5. He has been with Submarine Telecoms Forum for a little over 6 years; he is the originator of many products, such as the Submarine Cable Map, STF Today Live Video Stream, and the STF Cable Database. In 2013, Kristian was appointed Vice President and is now responsible for the vision, sales, and overall direction and sales of SubTel Forum.


ISSUE 93 | FINANCE & LEGAL

Conferences Submarine Telecoms Forum, Inc. 21495 Ridgetop Circle, Suite 201 Sterling, Virginia 20166, USA ISSN No. 1948-3031 PRESIDENT & PUBLISHER: Wayne Nielsen VICE PRESIDENT: Kristian Nielsen

MANAGING EDITOR: Kevin G. Summers

CONTRIBUTING AUTHORS: Nigel Bayliff, Douglas Burnett, James Case, Francis Charpentier, Kieran Clark, Caroline Elliott, Stephany Fan, Alice Leonard de Juvigny, Andrew D. Lipman, Doug Madory, Christopher Noyes, Ulises R. Pin, Yves Ruggeri, Wesley Wright Contributions are welcomed. Please forward to the Managing Editor at ksummers@subtelforum.com.

Submarine Telecoms Forum magazine is published bimonthly by Submarine Telecoms Forum, Inc., and is an independent commercial publication, serving as a freely accessible forum for professionals in industries connected with submarine optical fiber technologies and techniques. Submarine Telecoms Forum may not be reproduced or transmitted in any form, in whole or in part, without the permission of the publishers.

ICPC Plenary 25-27 April 2017 Montevideo, Uruguay Website SubOptic Inaugural Meeting 14 May 2017 Chicago, IL, USA Website PTC’18 21–24 January 2018 Honolulu, HI, USA Website

January:

Global Outlook March:

Finance & Legal May:

Subsea Capacity July:

Regional Systems September:

Offshore Energy November:

System Upgrades

Liability: while every care is taken in preparation of this publication, the publishers cannot be held responsible for the accuracy of the information herein, or any errors which may occur in advertising or editorial content, or any consequence arising from any errors or omissions, and the editor reserves the right to edit any advertising or editorial material submitted for publication. Copyright © 2017 Submarine Telecoms Forum, Inc.

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SUBMARINE TELECOMS FORUM

CODA BY KEVIN G. SUMMERS

O

ur neighbor passed away in January. He was 80 years old and went quickly, after a short illness. He was active right up until the end. As a matter of fact, he was out in the field making hay with us last summer. I wrote neighbor Bob’s obituary, and in the process I heard story after story about the many people he had mentored over the years. Farmers and bee keepers and neighbors and random people he met at the landfill—Bob was the kind of guy that wanted to pass his knowledge on to the people around him. I benefited greatly from his mentorship when my wife and I moved to the country back in 2009. I didn’t know anything about farming or country life, and Bob taught me how to use a chainsaw, how to fix a riding mower, how to drive a tractor and make hay and a hundred other little things. He helped me clear the road to our barn, helped me wean pigs and build fences and tame heifers. He was a great neighbor and a friend. 62

This submarine cable industry, of which we’re all a part, is filled with many older individuals who have years of experience under their belts. And there are up and coming folks, new into the industry, that would benefit greatly from a wise mentor taking them under their wing. It’s my hope that those of you who are able will take this under consideration as you go about your work days. Is there someone in the office that could use a mentor? In many cases, mentoring a younger person is as beneficial to the older person as it is to the student. It gives the wised old timer a sense of importance, and God knows that we all need that. So, I’m encouraging you to be a good neighbor, or in this case, a good co-worker. And if you’re young and someone has the kindness in them to take you under their wing, I hope you’re smart enough to let them teach you. That’s all for this issue. Thanks for reading!

Kevin G. Summers is the Editor of Submarine Telecoms Forum and has been supporting the submarine fibre optic cable industry in various roles since 2007. Outside of the office, he is an author of fiction whose works include ISOLATION WARD 4, LEGENDARIUM, THE MAN WHO SHOT JOHN WILKES BOOTH, and THE BLEAK DECEMBER.


ISSUE 93 | FINANCE & LEGAL

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Submarine Telecoms Forum #93  

Submarine Telecoms Forum magazine is a free, bimonthly trade journal focused on the submarine cable industry. The magazine has seen continuo...

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