SubTel Forum Magazine #117 - Finance & Legal by Submarine Telelecoms Forum

SUBMARINE TELECOMS

FORUM ISSUE 117 | MARCH 2021

FINANCE & LEGAL

EXORDIUM FROM THE PUBLISHER WELCOME TO ISSUE 117, OUR FINANCE & LEGAL EDITION

n industry friend called me recently. Apparently their employer is being acquired and they decided they did not want to stick around to see the show, and so, they have decided to go off on their own for a while before landing elsewhere. Many of us have been there before, if not multiple times. I have had similar, numerous calls over the months and it is interesting to see how the puzzle is constantly being reshaped. There seems to be a rash of new transactions going on in the market; maybe it is a holdover from the last year’s pandemic and companies are simply catching up to normal activity, or maybe it is a sign of the future for a while. As someone who never really mastered the skill of reconciling a checkbook I watch the whole finance side of our business with fascination and awe. My long-ago Economics degree empowers me to understand the basics of various deals, but I get usually lost somewhere deep in the minutia. I recently felt nostalgic and googled my college mentor. He was a Korean émigré who had escaped the North during the war and then found himself in the US as a leading and much sought after foreign policy expert. From him I learned my first few Latin phrases, such as pacta sunt servanda, “agreements must be kept”, or rebis sic stantibus, “things standing thus”, the latter stipulating that, where there has been a fundamental change of circumstances, a party may withdraw from or terminate the treaty in question. He and I lost touch soon after I graduated; we had had a falling out over the topic and timing of my master’s thesis and he wanted me to stick around for a third year. With my

wife, Peg, working the midnight shift at the only restaurant open after the bars closed I was inclined not to let off the steam. So, I repackaged a committee and topic, and wrote, defended, and published my thesis in time for graduation that May. But in so doing I lost the relationship with the man I studied under for years of international law, foreign policy, and the like. Google says he lived well into his 90s, received numerous accolades from the foreign policy world and numerous presidents, and looks to have lived a good life. Sometimes you can’t stick around to see the show. Today, I am watching (and commenting when asked) my daughter write her PhD dissertation. Her mentor is a leading EU policy scholar and expert, and I expect she will finish the considerable undertaking later this

There seems to be a rash of new transactions going on in the market; maybe it is a holdover from the last year’s pandemic and companies are simply catching up to normal activity, or maybe it is a sign of the future for a while.

2 SUBMARINE TELECOMS MAGAZINE

A Publication of Submarine Telecoms Forum, Inc. www.subtelforum.com ISSN No. 1948-3031 PRESIDENT & PUBLISHER: Wayne Nielsen | wnielsen@subtelforum.com

year. Her life is no less complicated than mine at that time, but she has the economic means to better organize and control the pieces of the puzzle around her, which at the end of the day is all any of us are really trying to do… especially these days. The Finance & Legal issue was always the hardest issue for us to fill; at least it used to be, but today we have numerous excellent articles from several international authors. Finance & Legal is a very specific topic, which is often overlooked or not considered early enough in a project cycle. Our authors have highlighted frequent issues inherent in the implementation of submarine cables, and even a few solutions. Thanks especially to Stewart Ash and Bill Burns, who have been our staunch Back Reflection authors for a number of issues and have provided some amazing historical perspective to our 170 plus year old industry. Their piece herein is their final installment, and we wish them well going forward. Stewart, in particular, has been one of my industry mentors for the last 30 plus years, and I still feel fortunate to be working with him on future consulting challenges. In addition, our most recent and significantly updated Submarine Cable Almanac was recently published and available for viewing and download. Of course, our ever popular “where in the world are all those pesky cableships” is included as well. STF Good reading and stay well,

Wayne Nielsen, Publisher

VICE PRESIDENT: Kristian Nielsen | knielsen@subtelforum.com SALES: Teri Jones | tjones@subtelforum.com | [+1] (703) 471-4902 EDITOR: Stephen Nielsen | snielsen@subtelforum.com DESIGN & PRODUCTION: Weswen Design | wendy@weswendesign.com DEPARTMENT WRITERS: Bill Burns, Kieran Clark, Rebecca Spence, Stewart Ash, Terri Jones, and Wayne Nielsen FEATURE WRITERS: Andrew Lipman, Andrew Woollven, Chris van Zinnicq Bergmann, Christian Keogh, Coran Darling, Global Maritime Initiative, Hardeep Sidhu, Jean-François Bilodeau, John Hedgpeth, Jorge Orlando Garcia Lozano, Kristian Nielsen, Mike Conradi, Ross Slutsky, Sean Bergin, Sergejs Makovejs, Stephen Nielsen, Ulises Pin, and William Redpath NEXT ISSUE: May 2021 — Global Capacity AUTHOR AND ARTICLE INDEX: www.subtelforum.com/onlineindex

SUSUBM BMARARININE ETETE LECOMS

LECOMS

FFOORRUUMM ISSUE 117 | MARCH 2021

ISSUE 118 | MA

FINANCE & LEGAL

GLOBAL CAPACITY

Submarine Telecoms Forum, Inc. www.subtelforum.com/corporate-information BOARD OF DIRECTORS: Margaret Nielsen, Wayne Nielsen and Kristian Nielsen SubTel Forum Analytics, Division of Submarine Telecoms Forum, Inc. www.subtelforum.com/store/reports LEAD ANALYST: Kieran Clark | kclark@subtelforum.com | [+1] (703) 468-1382 RESEARCH ANALYST: Rebecca Spence | rspence@subtelforum.com | [+1] (703) 268-9285 SubTel Forum Continuing Education, Division of Submarine Telecoms Forum, Inc. www.subtelforum.com/education CONTINUING EDUCATION DIRECTOR: Kristian Nielsen | knielsen@subtelforum.com | [+1] (703) 444-0845 Contributions are welcomed and should be forwarded to: pressroom@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. Liability: While every care is taken in preparation of this publication, the publishers cannot be held

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OF T HE

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. New Subscriptions, Enquiries and Changes of Address: 21495 Ridgetop Circle, Suite 201, Sterling, Virginia 20166, USA, or call [+1] (703) 444-0845, fax [+1] (703) 349-5562, or visit www.subtelforum.com. Copyright © 2021 Submarine Telecoms Forum, Inc.

I NDUSTRY

IN THIS FORUM ISSUE

SUBMARINE TELECOMS

ISSUE 117 | MARCH 2021

features

6 QUESTIONS WITH SEAN BERGIN

REGULATORY AND NATIONAL SECURITY REFORMS AFFECTING THE SUBMARINE CABLE INDUSTRY

LAKE TITICACA By Jorge Orlando García Lozano

BLAST FROM THE PAST By Chris van Zinnicq Bergmann

By Andrew D. Lipman, Ulises R. Pin and Ross Slutsky

ADVERTORIAL: IN CONVERSATION WITH BERMUDA’S REGULATORY AUTHORITY

SUBMARINE TELECOMS MAGAZINE

ALL MARINE PROJECTS DESERVE THE VERY GREENEST OF UXO SOLUTIONS By Andrew Woollven and Hardeep Sidhu

By Sergei Makovejs and John Hedgpeth

By Global Maritime Forum

FIBER TECHNOLOGY FOR SUBSEA NETWORKS

DUE DILIGENCE By Kristian Nielsen

THE NEPTUNE DECLARATION

TO LAY OR NOT TO LAY A SUBMARINE CABLE IN CANADA By Jean-François Bilodeau

UPDATE ON THE CURRENT STATE OF LEASE ACCOUNTING FOR FINANCIAL REPORTING PURPOSES

SO, YOU WANT TO LAY A CABLE By Stephen Nielsen

By William Redpath

PIPELINE CROSSING AGREEMENTS By Mike Conradi, Christian Keogh and Coran Darling

departments EXORDIUM................................................................... 2 SUBTELFORUM.COM..................................................... 6 STF ANALYTICS............................................................. 8 CABLE MAP UPDATE....................................................12 WHERE IN THE WORLD................................................14 BACK REFLECTION...................................................... 82 ON THE MOVE............................................................. 86 SUBMARINE CABLE NEWS NOW.................................. 88 ADVERTISER CORNER................................................. 89 MARCH 2021 | ISSUE 117

SubTelForum.com

VisitSubTelForum.com SubTelForum.com to to find find links resources Visit linkstotothe thefollowing following resources

FREERESOURCES RESOURCESFOR FORALL ALLOUR OUR SUBTELFORUM.COM SUBTELFORUM.COM READERS FREE READERS The most popular articles, Q&As of 2020. TOP OFyou 2019 FindSTORIES out what missed! The most popular articles, Q&As of 2019. Find out what you NEWSmissed! NOW RSS FEED Keep on top of our world of coverage with our free News NEWSdaily NOW industry RSS FEEDupdate. News Now is a daily RSS feed Now Keep on top of our world of coverage with our freehighNews of news applicable to the submarine cable industry, Now daily industry update. News Now is a daily RSS&feed lighting Cable Faults & Maintenance, Conferences As-of news applicable to the submarine industry, highlighting sociations, Current Systems, Datacable Centers, Future Systems, Cable Faults & Maintenance, Associations, Offshore Energy, State of the Conferences Industry and&Technology & Current Systems, Data Centers, Future Systems, Offshore Upgrades. Energy, State of the Industry and Technology & Upgrades.

PUBLICATIONS PUBLICATIONS Submarine Cable Almanac is a free quarterly publica-

Submarine Cablethrough Almanacdiligent is a freedata quarterly publication made available gathering and tion madeefforts available through diligent data gathering and mapping by the analysts at SubTel Forum Analytics,

SUBMARINE TELECOMS MAGAZINE

a division of Submarine Telecoms Forum. This reference mapping analysts at SubTel Forum Analytics, tool givesefforts detailsby onthe cable systems including a system map, a division of Submarine Telecoms Forum. This reference landing points, system capacity, length, RFS year and other tool givesdata. details on cable systems including a system map, valuable landing points,Telecoms system capacity, and free other Submarine Industrylength, ReportRFS is anyear annual valuable data. publication with analysis of data collected by the analysts of Submarine Report is an annualanalyfree SubTel ForumTelecoms Analytics,Industry including system capacity publication of data collected by the of analysts of sis, as well aswith the analysis actual productivity and outlook current SubTel Forum Analytics, including system capacity and planned systems and the companies that serviceanalythem. sis, as well as the actual productivity and outlook of current and planned CABLE MAP systems and the companies that service them. The online SubTel Cable Map is built with the industry CABLE MAP standard Esri ArcGIS platform and linked to the SubTel The online SubTel Cable Map is built withthe theprogress industryof Forum Submarine Cable Database. It tracks standard Esri ArcGIS platform and linked to the SubTel some 300+ current and planned cable systems, more than Forum Submarine Database. tracks46 thecable progress 800 landing points,Cable over 1,700 data It centers, shipsof

as well as mobile subscriptions and internet accessibility data for 254 countries. Systems are also linked to SubTel Forum's News Now Feed, allowing viewing of current and archived news details. The printed Cable Map is an annual publication showcasing the world's submarine fiber systems beautifully drawn on a large format map and mailed to SubTel Forum Readership and/or distributed during Pacific Telecommunications Conference in January each year.

VIDEO STREAMING AND TUTORIALS

SubTel Forum tutorials teach how to use the ever growing SubTel Cable Map, including various map layers for data centers, cable ships, etc.

CONTINUING EDUCATION

SubTel Forum designs educational courses and master classes that can then appear at industry conferences around the world. Classes are presented on a variety of topics dealing with key industry technical, business, or commercial issues. See what classes SubTel Forum is accrediting in support of the next generation of leaders in our industry.

AUTHORS INDEX

The Authors Index is a reference source to help readers locate magazine articles and authors on various subjects.

EXCLUSIVE INFORMATION FOR SUBSCRIBERS OF MARKET SECTOR REPORTS SUBTEL FORUM ANALYTICS MARKET SECTOR REPORTS

SubTel Forum Subscribers have exclusive access to SubTel Forum online MSRs updated quarterly: DATA CENTER & OTT PROVIDERS: Details the increasingly shrinking divide between the cable landing station and the backhaul to interconnection services in order to maximize network efficiency throughout, bringing once disparate infrastructure into a single facility. If you're interested in the world of Data Centers and its impact on Submarine Cables, this MSR is for you. GLOBAL CAPACITY PRICING: historic and current capacity pricing for regional routes (Transatlantic, Transpacific, Americas, Intra-Asia and EMEA), delivering a comprehensive look at the global capacity pricing status of the submarine fiber industry. Capacity pricing trends and forecasting simplified. GLOBAL OUTLOOK: dive into the health and wellness of the global submarine telecoms market, with regional analysis and forecasting. This MSR gives an overview of planned systems, CIF and project completion rates, state of supplier activity and potential disruptive factors facing the market.

OFFSHORE OIL & GAS: provides a detailed overview o the offshore oil & gas sector of the submarine fiber industry and covers system owners, system suppliers and various market trends. This MSR details how the industry is focusing on trends and new technologies to increase efficiency and automation as a key strategy to reduce cost and maintain margins, and its impact on the demand for new offshore fiber systems. REGIONAL SYSTEMS: drill down into the Regional Systems market, including focused analysis on the Transatlantic, Transpacific, EMEA, AustralAsia, Indian Ocean Pan-East Asian and Arctic regions. This MSR details the impact of increasing capacity demands on regional routes and contrasts potential overbuild concerns with the rapid pace of system development and the factors driving development demand. SUBMARINE CABLE DATASET: details 400+ fiber optic cable systems. Including physical aspects, cost, owners, suppliers, landings, financiers, component manufacturers, marine contractors, etc. STF

ANALYTICS

BY KIERAN CLARK

THE IMPACT OF BEAUTIFUL DATA WHAT IS BEAUTIFUL DATA?

eautiful Data is the idea that information should be presented in both a useful and visually pleasing manner. Additionally, this information should strive to be dynamic in nature as much as possible since these days static data becomes useless data very quickly. Over the last two years, SubTel Forum and WFN Strategies have worked to keep the idea of Beautiful Data in mind with all of our publications, products, and services. Using tools like ArcGIS Online for interactive maps and various web applications for interactive elements have allowed us to provide data in interesting, accessible, and beautiful ways. The internet that this industry works so hard to maintain enables us to provide truly innovative and interactive experiences for our readers and clients. These types of visual and interactive tools have impacted nearly all aspects of business in both SubTel Forum and WFN Strategies.

MAPS

The most obvious impact that the idea of Beautiful Data has had is on our mapping capabilities. Our maps are no longer just a simple, static representation of submarine cables around the world but include useful data that helps to inform people about the state of the industry. The print

SUBMARINE TELECOMS MAGAZINE

map now includes data centers and symbolizes cable systems based on their age – take a look at the Transatlantic region to see at a glance just how old much of that infrastructure is! Additionally, we have included a number of charts to provide further insight into the current state of the market. The online SubTel Cable Map (Figure 1) has gone through a number of iterations over the past two years as we have worked to refine the data and presentation. The latest rework of the map has put it into an ArcGIS Online Dashboard. This has allowed us to provide our users the tools to sort and filter data based on their own specific

needs in a quick and intuitive manner. If you want to know how much capital was invested in Transpacific routes or how many kilometers of cable have been recently installed in the Americas, you can now do so with a single click. Additionally, searching for cable systems by name, supplier or installer has never been easier – simply pull up the side panel to access all the available data filters. Don’t just read about this great tool, check it out for yourself here: https:// subtelforum.com/cablemap/

DASHBOARDS

Speaking of Dashboards, this tool

Figure 1: Image of the SubTel Cable Map

in particular has had a large impact on the services that WFN Strategies provides. With an easy to use, user filterable Dashboard, (Figure 2) clients are able to track the status of their cable system projects in real-time. Maps highlight trouble spots and track the current location of active project vessels while additional widgets provide all the information you need to monitor a project’s current status and make informed decisions. Dashboards can be used to track any phase of a cable system – from planning to commissioning or even serve as a document archive that is hosted in the cloud. Gone are the days of paper reports and documentation that get archived and forgotten about. With this tool, it is possible to have the entire history of a project at your fingertips in an easy to use, filterable format. We have even built a Dashboard for use on mobile phones allowing you to keep an eye on things while you’re on the go. The true power of the Dashboard is the ability to customize symbology to represent data in a visual way that is both easy to digest and pleasing to look at. Different colors and shapes denoting clearly separate items of interest and maps updated in real-time provide a comprehensive, visual overview of a project’s status. Clients are able to tell immediately if the project is progressing smoothly or if there is an issue that needs to be addressed.

If you’d like to check one of these Dashboards out for yourself, we have an interactive demo available here: https://wfnstrategies.com/dashboarddemo

INTERACTIVE PUBLICATIONS

As we continued our push into more interactive and dynamic content, we realized that some of our more traditional publications needed to be addressed as well. This started with inserting videos that automatically play on their perspective pages in the SubTel Forum Magazine, and a big push was made at the end of last year

with the 2020 edition of the Submarine Telecoms Industry Report. We took what had been a static PDF and turned it into an interactive, dynamic report through the use of ArcGIS Story Maps. Transforming static charts and tables into dynamic, user configurable web applications really elevated the report and allowed our readers to view certain data sets in ways personally important to them. Again, the concept of Beautiful Data played a big role in the revamp of the Industry Report. Visually pleasing maps, interactive charts and embedded regional Dashboards allowed us to

Figure 2: Image of a Submarine Cable Dashboard

MARCH 2021 | ISSUE 117

ANALYTICS present the submarine cable industry in an entirely new way that really shows off the impact technology can have on things even as mundane as annual reports. Check out the latest edition of the Submarine Telecoms Industry Report here: https://subtelforum.com/products/submarine-telecoms-industry-report/ While the Submarine Cable Almanac (Figure 3) by its very nature is a more static document, even here the concept of Beautiful Data was able to have an impact. The latest edition – published in February 2021 – was built entirely within ArcGIS Pro and allowed us to easily mirror the look and feel of the new print map. Data was populated from our Submarine Cable Database and each map was individually generated based on parameters set within the software. We combined all these elements together to completely overhaul this publication and turn it into something beautiful. Take a look at the new and improved Submarine Cable Almanac here: https://subtelforum.com/products/ submarine-cable-almanac/

TUTORIAL VIDEOS

All these new tools provide powerful ways for our readers and clients to be able to interact with the data we provide more directly – but some of these can be a little complicated. If you followed the previous incarnation of our Submarine Cable Map, you know that we provided a video tutorial series

SUBMARINE TELECOMS MAGAZINE

BY KIERAN CLARK

on how to use various features of such a robust web application. Now that we have rolled out brand new tools, we will be back to producing tutorial videos to make sure that everyone can get full use out of these powerful applications. The first of these tutorial videos is for the new and improved SubTel Cable Map: https://youtu.be/ QDCKE2vZg0g

WHAT LIES AHEAD

Moving forward, we plan on applying the concept of Beautiful Data to as many aspects of SubTel Forum and WFN Strategies as possible. It has become clear to us – and hopefully to many of you – that static data in traditional, boring formats is quickly losing its relevance. If there are any ways you think we can apply the concept of Beautiful Data to any of our publications and services, please let us know – we are

Figure 3: Image of the Submarine Cable Almanac

always looking to meet the needs of our readers and clients. In this day and age where everything is in the cloud and accessible data is more important than ever, there’s no reason for the submarine cable industry to be left behind. After all, none of this works without us! STF KIERAN CLARK is the Lead Analyst for STF Analytics, a division of Submarine Telecoms Forum, Inc. He originally joined SubTel Forum in 2013 as a Broadcast Technician to provide support for live event video streaming. He has 6+ years of live production experience and has worked alongside some of the premier organizations in video web streaming. In 2014, Kieran was promoted to Analyst and is currently responsible for the research and maintenance that supports the STF Analytics Submarine Cable Database. In 2016, he was promoted to Lead Analyst and put in charge of the newly created STF Analytics. His analysis is featured in almost the entire array of SubTel Forum publications.

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FEATURE SubTel Cable Map Updates

he SubTel Cable Map is built with the industry standard Esri ArcGIS platform and linked to the SubTel Forum Submarine Cable Database. It tracks the progress of some 400+ current and planned cable systems, 45+ cable ships, over 800 landing points, as well as mobile subscriptions and internet accessibility data for 254 countries. Systems are also linked to SubTel Forum’s News Now Feed, allowing viewing of current and archived news details. This interactive map is a continual work and progress and regularly updated with pertinent data captured by analysts at SubTel Forum and feedback from our users. Our goal is to make easily available not only data from the Submarine Cable Almanac, but also more and more new layers of system information. The SubTel Cable Map makes use of the ArcGIS Dashboards platforum. This allows users to see an array of key data points without having to dig through complicated menus and settings to drill down into the data that is important to you. Be sure to check out the slide over panel on the left hand side of the map to filter data based on Region, System Supplier, System Installer or System Owner. Want to know how much capacity is available along Transpacific routes or how many kilometers of cable a

supplier has produced over the last five year? Now all it takes is couple simple clicks to see your data! We hope you continue to make use of the SubTel Cable Map in order to learn more about the industry yourself and educate others on the importance of submarine cable systems. Please feel free to reach out to our Lead Analyst, Kieran Clark, should you have any comments, questions or updates at kclark@subtelforum.com. STF

Since the last issue of the Magazine, the map has undergone a complete design overhaul and added 131 systems – including Oil & Gas systems for the first time! Cable systems are now colored by age and over 400 existing systems have been updated.

SUBTELFORUM.COM/CABLEMAP 12

SUBMARINE TELECOMS MAGAZINE

THE FULL LIST OF NEWLY ADDED SYSTEMS Janna JAYABAYA ARE AS FOLLOWS: JBCS MARCH 15, 2021 Planned Systems Amitie BaSICS CrossChannel Fibre Echo Humboldt MSC N0R5KE VIKING SHARE SING Tokelau Submarine Cable In Service Systems Aden-Djibouti ALVAL/ORVAL AUTA Balalink Bodo-Rost Cable BT Highlands and Islands Submarine Cable System BUGIO CANDALTA CARCIP Ceiba-1 Celtic Cross Straits Cable Network DAMAI Cable System Denmark-Sweden 16 Denmark-Sweden 17 Emerald Bridge Fibres ESAT-1 ESAT-2 FEC FLY-LION3 FOS Quellon-Chacabuco GC1 GC2 GC3 GCC GCIS Geo-Eirgrid GlobalConnect-KPN H2HE HICS HIFN Italy-Malta

JIBA Kattegat-1 Kerch Strait Cable KetchCan1 LBC LCMSSCS Libreville-Port Gentil Cable LTCS LV-SE 1 Lynn Canal Fiber Malta-Gozo Cable Malta-Italy Interconnector Mandji Fiber Optic Cable Nelson-Levin NordBalt OMRAN/EPEG Cable System Palawa-Iloilo Cable System PASULI PENBAL-5 Persona PGASCOM PNG LNG POI Prat Rockabill Rønne-Rødvig Saint Pierre and Miquelon Cable Saint Thomas - Saint Croix System SAIT SAS SAS-2 SBCS Scandinavian Ring North Scandinavian Ring South Scotland-Northern Ireland 2 Sea2Shore Segunda FOS Canal de Chacao SEUL Sirius North Sirius South SJJK Skagerrak 4 SSSFOIP Subcan Link 1 Subcan Link 2 Swansea-Brean

Taba-Aqaba Tamares North Tanjun Pandan-Sungai Kakap Cable TDCE Tenerife-Gran Canaria Tenerife-La Gomera-La Palma TRANSCAN-3 Trapani-Kelibia TSCS TT-1 Turcyos-1 Turcyos-2 UAE-Iran Ultramar GE X-Link Submarine Cable Oil & Gas Systems ADNOC Abu Dhabi Anadarko Mozambique Link Aramco Offshore Fiber Optic Cable System Bahrain LNG Terminal Barrow Island Cable System BP GoM Cardon IV - Perla Field Offshore Platform Venezuela Chevron Gulf of Thailand Delfin LNG ExxonMobil Papua New Guinea Grand Banks Offshore Optical Cable Johan Sverdrup Malha Optica Martin Linge Mumbai High PetroBras Campos Basin Petronas Malaysia Project Koete Radius Poseidon Shell Prelude FLNG TampNet FOC TampNet North Sea Vocus North-West Cable System Woodside NW Shelf Woodside Scarborough

MARCH 2021 | ISSUE 117

WHERE IN THE WORLD ARE THOSE PESKY CABLESHIPS? BY REBECCA SPENCE

021 is off to an excellent start and the world’s cableships have proven once again how vital they are to the subsea cable industries continued forward progress. This year has already brought the decision by Orange Marine to increase their fleet, and just before publication of this Issue of SubTel Forum Magazine, the Ile de Sein and her hardworking crew announced completion of the final splice for the EllaLink cable system. So let’s look at some numbers. Previously Figure 1 focused solely on whether a vessel had reached its intended destination at the time the data was pulled. As more information is collected a third choice became apparent; those of vessels that have not had any movement in the last two months. In January and February 13% of the 46 vessels tracked had no movement. The vessel Pacific Link which was sold to DNEX in 2019 has been out of commission for some time as it received an overhaul of its aging onboard electrical systems which started in 2020. In Figure 2, you can see that the majority of moving vessels would reach their next destination within the first week in March. The remaining 14% of active vessels were en route to new destinations that would be reach by the end of March and currently there are no vessels with long lead estimations. The AIS tracking system used, records the locations provided several times a day by each vessel; usually 3-5 reports

a day per vessel. Figure 3 breaks down the regions of activity by averaging how many vessels reported their location in each region in the last two months. The most active oceanic area was West Africa which had 7 different vessels move through it with a total of 939 reports; of which the Ile d’Ouessant spent the most time reporting 199 times in the region. The Pierre de

Figure 1: Arrived at Destination

SUBMARINE TELECOMS MAGAZINE

Figure 2: Weeks Left Estimated in Transit

Fermat spent several weeks moving through the area before heading to France to load up 1200 kms of cable in preparation to begin laying the PEACE cable system. In coming months, we will likely see in increase in activity in the Mediterranean as work begins on that system. In close second was the China Coast which saw 923 reports in the first two months of the year. South East Asia, and East Asia all saw similar amounts of activity with 8-13 various vessels. The West Mediterranean saw a 2% increase from the January data set as the Raymond Croze spent much of January in the region repairing a defective repeater on the Sea-Me-We 4 system. And the East Mediterranean region was added to the figure with the Antonio Meucci repairing a cable off Capri Island at the beginning of the February. Other vessels with notable activity are the Global Symphony which spend January in the North Sea in January laying 37km of subsea cable near Pentland Firth. The René Descartes which spent some time at the beginning of the year thawing out after an extremely cold journey back to East Asia through the Bering Sea. And the Ile De Batz which spent most of its time in the North East Atlantic Ocean laying the Amitié Atlantic Cable For this issue, our data was compiled from reviewing the tracking information of 45 vessels. Prysmian will join shortly after the Leonardo da Vinci finishes sea trials, which are set to begin any day now. Currently, Alcatel Submarine Networks is leading with the largest fleet. One vessel has been removed after finding that SBSS quietly announced they were retiring the CS Fu An from their fleet at the end of 2020. And Orange Marine will add a new Vard cable vessel in two years. With the majority of the existing cable fleet over 20 years old, these new additions are a sign that out industry is as strong as ever and will only continue to

grow as demand continues to increase worldwide. I hope you have enjoyed the past year of cableship movement analysis. If you ever have a need to highlight a specific vessel or project news please feel free to reach out to me at rspence@subtelforum.com. As always, if you ever want an update before the next issue is released, you can always visit the SubTel Forum Interactive Cable Map at https://subtelforum.com/cablemap/ for daily updates. STF REBECCA SPENCE is the newest member of the SubTel Forum team. She joined our ranks as a Research Analyst at the end of 2019. A graduate of Christopher Newport University, this is Rebecca’s premier article for the STF magazine.

MARCH 2021 | ISSUE 117

FEATURE

6 QUESTIONS WITH SEAN BERGIN: Talking Technology Trends with APTelecom’s President & Co-Founder

WHAT IS APTELECOM’S MISSION?

Officially, our mission is to help enable our customers to achieve their commercial objectives by providing value through experience-based expert consulting in the monetization of their connectivity assets and more so these days, in various data centre markets. We now also find ourselves supporting due diligence activities being undertaken by investors & lenders seeking to understand the connectivity space in this ‘new world’ of convergence. With regard to the monetization of connectivity assets, we are focussed on continually finding ways to innovate in the way we prepare our clients and their products for short- and long-term success, regardless of their endgame. We have developed an extended portfolio of clients which now also include satellite and data centres which is a direct response to the convergence that we see occurring right now across various connectivity technologies. Understanding our client’s business inside and out along with the industry as a whole, sets us up well to support not just subsea, but a variety of players in congruent verticals, such as debt and equity providers seeking to better under-

SUBMARINE TELECOMS MAGAZINE

stand the space. APTelecom has moved way beyond simple subsea pre-sales & monetization, although we do remain true to our roots.

HOW DOES APTELECOM PARTICIPATE IN THE SUBMARINE CABLE MARKET?

You could argue that we are Pioneers in subsea pre-sales. We have helped in excess of $2 billion worth of systems achieve ready for service status over the last decade. No one else has been focussed on this space. The submarine cable market however, is changing and again, it’s all down to convergence. Now, when looking at monetization and commercialization aspects of new systems, one needs to take into account the data centre environment (core and edge), who the most appropriate joint built partners may be and beyond sales, where the debt and/or equity will come from. We see ourselves playing an integral role in all of these elements.

IS APTELECOM CURRENTLY INVOLVED WITH ANY NEW SUBMARINE CABLE PROJECTS?

Absolutely. As mentioned earlier, APTelecom re-

mains true to its roots and subsea pre-sales on new systems being developed, is still a key pillar of our business and we are really good at it. Working with clients in a ‘pre-CIF’ environment to help them monetize, understand real demand rather than desktop demand, develop pricing models, short and long term cashflow forecasts, etc., provides APTelecom with a looking glass into the future because we are in these new builds so early. We get to understand and play a role in emerging ‘hot’ markets years before they become so. This ‘looking glass’ underpins and provides significant value to those in the data center market looking to jump into emerging hubs sooner than the competition and it also provides debt and equity players with insight on what’s happening where and when, well into the future. Currently, APTelecom is involved in new subsea projects in a variety of markets, such as India – SE Asia (Singapore, Indonesia & Thailand), Trans-Atlantic, Africa, North Pacific, Mid-Pacific and the Americas. This spread of clients across multiple geographies, gives us a good read on what’s happening in each market and of course, their relationship to each other.

APTELECOM’S SUBMARINE CABLE PORTFOLIO IS WELL KNOWN TO OUR READERS, TELL US MORE ABOUT OTHER SERVICES APTELECOM PROVIDE?

So, in the subsea space, we typically provide demand study reports, based on actual demand rather than desktop studies, pricing forecasts, price book development and of course, we generate pre-sales. Our consulting practice however, is growing very rapidly in other sectors such as the data center market and satellite sector where we have some very exciting things happening. It’s logical really, because at the end of the day, it’s all about convergence, be it subsea, satellite or data centers. In some cases, APTelecom is also helping clients with strategic sourcing. The other pillar which has seen significant growth over the last two years or so, is in the due diligence space. We find ourselves consulting to banks, PE / M&A firms and global accounting firms, looking to gain insight on a variety of matters such as general market dynamics, specific project opportunities, industry insights, regional trends, business case validation and so on.

WITH THE INCREASING CONVERGENCE BETWEEN DATA CENTERS AND SUBMARINE CABLES, DOES APTELECOM SEE AN OPPORTUNITY?

We certainly do. It goes beyond data centers and submarine cables though. We now need to think in the context of ecosystems and how they interact with each other and their respective inter-dependencies.

If we look at global networks for example, buyers in a converged world won’t necessarily think subsea or satellite, but simply think connectivity between multiple points. An SDN platform is just as capable of managing subsea as it is terrestrial or satellite services and as we see it, the future is most definitely headed towards a fully meshed SDN collection of hybrid networks, some may even be on a global scale with satellite, subsea and terrestrial components all working in concert.

WHERE DO YOU SEE APTELECOM IN 5 TO 10 YEARS?

It’s a great question. We do spend a considerable amount of time developing and fine tuning the longterm vision of the company. When we started back in 2009, we created a ‘vision 2020’ document, which became a set of waypoints to help us stay on track and remain focused on our objectives. We have just re-written that and have created vision 2025. The guiding principle for us is to be viewed as a relationship driven organisation rather than a transactional one. This vision focusses on differentiation in the way we develop and deliver the APTelecom experience and to be known as a leader in the multi-disciplinary development we currently see underway (convergence). The fundamentals for vision 2025 however, are to continue to establish APTelecom as an industry recognized consulting resource in the following segments; • Network commercialization and acquisition (e.g., M&A diligence) • Connectivity and data centre product sales • Data centre commercialization and acquisition • Traditional consulting with a focus on the subsea and connectivity segments Sean Bergin is Co-Founder & President of APTelecom, and President & Chair PTC Board of Governors. Bergin is based in APTelecom’s Asian headquarters. Bergin has been instrumental in building APTelecom into a globally recognized leader in telecom and fiber consulting, elevating from a start-up business to an award-winning global organization which has generated over $420 million USD in sales for clients. Under Bergin’s leadership, APTelecom has been named the “Sales Team of the Year” by the Global Customer Sales and Service Awards and has won multiple other accolades including: Silver Award in the Network Products Guide’s 10th Annual Hot Companies and Best Products Awards, Bronze Winner for the Best in Biz Awards International, and the Silver Award Winner for the “Fastest-Growing Company EMEA” by the Best in Biz Awards. Bergin has also spearheaded many of APTelecom’s charitable initiatives, whose proceeds are donated to select global non-profit organizations. Bergin has significant management experience at both national and international levels at Telstra, BT and Hutchison. Bergin has also served as Director of Sales for Australia Japan Cable, an international wholesale submarine cable system linking Australia and Japan. He is highly experienced with complex, high value, deals. Bergin has covered, lived, and resided in a multitude of primary and emerging markets across Asia. Bergin has also recently been elected as President and Chair of the PTC Board of Governors.

MARCH 2021 | ISSUE 117

FEATURE

REGULATORY AND NATIONAL SECURITY REFORMS AFFECTING THE SUBMARINE CABLE INDUSTRY BY ANDREW D. LIPMAN, ULISES R. PIN AND ROSS SLUTSKY

hile COVID-19 rightfully remains the primary focus of the international business community, over the course of the past year, there have also been a number of important policy and regulatory changes in the United States affecting the submarine cable industry which warrant closer examination. This article discusses primarily the reforms to the “Team Telecom” review process and its impact on the submarine cable industry. The global demand for data has never been greater. Submarine cable systems are key to meeting this demand. Subsea systems carry over 99 percent of all international communications, and remain the primary method of transporting internet traffic because of their speed, capacity and security. Currently, there are about 400 submarine cables worldwide, with an estimated total length of more than 1.2 million kilometers, or enough to circle the Earth 30 times. The combined submarine cable industry is expected to increase in value from approximately US $12 billion in 2018 to approximately US $30 billion by 2027. At the same time as the demand for connectivity rises, the challenges of constructing a submarine cable project have never been greater. Geopolitics present an obvious

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hurdle, as the United States experience a heightened national security profile and economic nationalism that threaten international cooperation. Navigating national security, data privacy, cybersecurity and other regulations will continue to be challenging in the coming years.

A. OVERVIEW OF EXECUTIVE ORDER ON ESTABLISHING THE COMMITTEE FOR THE ASSESSMENT OF FOREIGN PARTICIPATION IN THE UNITED STATES TELECOMMUNICATIONS SERVICES SECTOR

On April 4, 2020, President Trump signed an Executive Order (EO) clarifying and formalizing the role of the ad hoc interagency body historically known as “Team Telecom.” The EO authorized the newly formed Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector (“Committee”) to conduct a national security and law enforcement review of any applications and licenses that pose risks to national security and law enforcement interests of the United States. Practically speaking, the EO brought structure to the Team Telecom process by implementing deadlines for review of applications while also expanding the reach and scope of applications subject to review.

BACKGROUND ON TEAM TELECOM

The Federal Communications Commission (FCC) 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. In theory, the application process for a submarine cable license (or the transfer of an existing license) can take just 45 days from the date the application is put on public notice. In practice, however, the process takes far longer: as national security reviews drag on. Most subsea cable applications have some amount of foreign ownership or participation, and so the United States subjects cable landings to considerable scrutiny by “Team Telecom,” an ad hoc task force comprised of the Departments of Defense, Homeland Security, and Justice, including the Federal Bureau of Investigation. With so many actors, when a national security review is required, prior to the adoption of the EO, the FCC rarely granted a cable landing license in fewer than six months, and review periods of over a year were not uncommon. In the normal course, Team Telecom conducted review of a new submarine cable system if (1) the system would connect the United States, and (2) the system would have aggregate direct or indirect foreign ownership of 10% or more – that said, Team Telecom has recently scrutinized even 100% American projects. In the review, Team Telecom asked a series of initial questions pertaining to issues such as equipment type, storage and security of network data, encryption key usage, and entities with access to the applicant’s network and data. Where ownership, operation, or financing arrangements raise concerns, Team Telecom makes additional inquiries and may impose certain conditions for approval. These conditions often include letters of assurances or national security agreements. Frequently, there are limitations on equipment types used or requirements to establish a network operations center located in the United States and operated by screened U.S. citizens. Such agreements facilitate U.S. national security and law enforcement surveillance programs, such as those conducted by the National Security Agency. The agreements also aim to block foreign governments from gaining visibility into U.S. telecommunications networks and communications. The Executive Order largely maintains the functioning and operations of Team Telecom, but with a few key differences:

COMMITTEE MEMBERS

Under the terms of the EO, the members of the Committee include the Secretary of Defense, Secretary of Homeland Security, and Attorney General (DOJ) who serves as chair.

Additionally, the Executive Order indicated that the President may also designate “the head of any other executive department or agency, or any Assistant to the President [as a member], as the President determines appropriate.” The EO also designated numerous Committee advisors, including the Secretaries of State, Treasury, and Commerce, the Directors of National Intelligence and the Office of Management and Budget, the U.S. Trade Representative, the General Services Administrator, the Assistants to the President for National Security Affairs and Economic Policy, the Director of the Office of Science and Technology Policy, and the Chair of the Council of Economic Advisers.

IMPOSITION OF NEW TIME LIMITS

Critically, the EO established timelines for national security review. Previously, Team Telecom had no time limits on its reviews, meaning that the reviews could languish for months or even years. Under the EO, following referral of an application by the FCC, the Committee must complete its initial review of the license application within 120 days. The Committee’s initial determination may find that (1) granting the license or transfer of license poses no risk to U.S. national security or law enforcement interests; (2) that any such risks raised could be effectively addressed through standard mitigation measures recommended by the Committee; or (3) a secondary assessment is needed because the risks cannot be allayed via standard mitigation measures. If a secondary assessment is deemed necessary, the Committee must complete its second evaluation within 90 days. Under this new standard, even if the Committee opts to subject an application to multiple rounds of review, it still cannot exceed the 210-day limit. We are pleased to report that a few months after the implementation of the EO, the Committee is regularly meeting its deadlines and most FCC applications, including submarine cable applications are being cleared much faster than in the past, where the Team Telecom review could drag on indefinitely.

COMMITTEE REVIEW OF EXISTING LICENSES

It is worth noting that Section 6 of the EO provides that the Committee not only has the authority to review applications of prospective licensees for national security threats, but may also review existing licenses to identify any additional or new risks to national security or law enforcement interests. The Committee may do this of its own accord, even absent changes in foreign ownership, by majority vote of the Committee members. MARCH 2021 | ISSUE 117

FEATURE In reviewing existing licenses, the Committee may ultimately decide to recommend additional mitigation measures, take no additional action with respect to the license, or recommend revocation.

KEY TAKEAWAYS

From the perspective of regulated entities in the communications sector operating under the jurisdiction of the FCC, the EO was arguably somewhat of a mixed bag. It was industry-friendly to the extent it sought to impose time limits so that national security regulatory reviews cannot drag on indefinitely. However, it also expanded the scope of federal regulatory powers by enabling review of existing licenses. This means that obtaining a license is no longer a guarantee of continued operating authority in the United States.

B. FCC RELEASES TEAM TELECOM REFORM ORDER

On April 27, 2020, in wake of the release of the EO, the FCC issued a Public Notice seeking to refresh the record in an existing proceeding seeking comment on potential Team Telecom process reforms. In the Public Notice, the FCC sought comment on the effect of the EO on its prior proceeding (which had been lying dormant at the FCC since 2016), urging commenters to address how the EO affected the FCC licensing process. The Public Notice also solicited comment directly from the Executive Branch to express its views on a number of issues relating to timing and expected procedures surrounding multiple facets of implementation of the EO. After a five-month process, on October 1, 2020, the FCC issued a Report & Order building upon the EO to add certainty and transparency to the Committee review process. First, the Commission adopted the timeframes set forth in the EO – a 120 day initial review period followed by a discretionary 90 day secondary review (in the event the Committee determines that standard mitigation measures are insufficient). The Committee will continue to review three types of applications where the applicants have reportable foreign ownership: (1) applications for international 214 authorizations and submarine cable landing licenses (including applications to assign, transfer, or modify said authorizations/licenses); (2) petitions for foreign ownership rulings of wireless licensees, including broadcast, common carrier wireless, and common carrier satellite earth station applicants and licensees under section 310(b) of the Communications Act; and (3) all applications associated with the requests and applications identified above, at the FCC’s discretion. However, the Report & Order also established that the FCC will not routinely refer certain types of applications to

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the Committee, including transfer of control applications of stand-alone domestic 214 authority, satellite earth station applications not associated with a petition for a foreign ownership ruling, notifications and applications for pro forma transfers or assignments, applications involving transactions in which the only reportable foreign ownership is through wholly owned intermediate holding companies and the ultimate ownership and control is held by US citizens or entities, international 214 applications in which the applicant has an existing mitigation agreement and there are no new reportable foreign owners, and international 214 applications in which the applicant was cleared by Team Telecom within the past 18 months without mitigation and there are no new subsequent reportable foreign owners. The FCC Report & Order also directed the International Bureau to establish certain publicly available standardized questions for Team Telecom applicants covering five general categories: (1) corporate structure and shareholder information; (2) relationships with foreign entities; (3) financial condition and circumstances; (4) compliance with applicable laws and regulations; and (5) business and operational information, including services to be provided and network infrastructure.

KEY TAKEAWAY

The FCC’s Report & Order built upon the EO by solidifying time limits on agency review, clarifying the categories of applications that will generally be subject to review, and bringing greater transparency to the process by standardizing certain questions and making them publicly available.

C. CHANGE OF ADMINISTRATION

The most significant political development in recent months of course was the November election. As of the time of this writing, Jessica Rosenworcel is serving as the acting Chairwoman of the FCC, and it is not clear when President Biden will select an individual to lead the Commission on a permanent basis. However, while the change of administration will have far-reaching political consequences in a number of areas, its impact on the Team Telecom domain remains to be seen. Despite all of the partisan division in American politics, national security review of telecommunications licenses and transactions appears to be one of the rare areas in which there appears to be bipartisan consensus. For example, when the FCC released the aforementioned Report & Order prior to the November election, then-Commissioner Rosenworcel praised the item for formalizing the Team Telecom review process – a development which she noted was “long overdue.” However, she also stated that there

is more work to be done because “[n]ational security risks are constantly evolving” and urged the FCC to “establish a clear standard and process for revoking a foreign carrier’s existing authorizations on national security grounds.” Hence, while we do not know precisely what tomorrow will bring, we would expect the FCC to stay active in this field. In sum, the past year has brought some real changes to the national security reviews affecting submarine cables and additional changes are likely as the Biden Administration gains its footing. Submarine cable developers, suppliers and users should remain vigilant of regulatory developments in this area. STF ANDREW LIPMAN is Partner at Morgan Lewis. Andrew 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.

ULISES PIN is Partner at Morgan Lewis. Ulises 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 experience in crossborder transactions and particular experience on foreign investment and national security issues, including securing approvals by the Committee on Foreign Investment in the United States (CFIUS). ROSS SLUTSKY is Associate at Morgan Lewis. Ross Slutsky advises technology companies and financial institutions on domestic and international regulatory, corporate, and litigation issues spanning the communications, media, technology, privacy, and cybersecurity sectors. He particularly focuses on spectrum management issues for emerging and established wireless and satellite applications; TMT investment guidance for private equity firms and venture capital funds; and data management/surveillance law compliance for various tech enterprises. Mr. Lipman is a partner and Chair of the Telecommunications Media and Technology Group at Morgan, Lewis & Bockius, LLP in Washington, DC. Mr. Pin is a partner and Mr. Slutsky is an associate in the group.

Although APTelecom is recognized for our subsea cable sales expertise, we also provide the support services needed to make calculated business calcul decisions.

MARCH 2021 | ISSUE 117

ADVERTORIAL IN CONVERSATION WITH BERMUDA’S REGULATORY AUTHORITY New and innovative legislation to further develop and enhance Bermuda’s offering for the submarine cable industry was passed by the government last year. The Submarine Communications Cable Act 2020 (the Act) provides a regulatory framework for the installation, maintenance, and support of submarine communications cables, in addition to the establishment of a new submarine cable protection zone. Fiona Beck, Director of the Bermuda Business Development Agency, Past President of SubOptic and Former President and CEO of Southern Cross Cable Network, recently caught up with Denton Williams, Chief Executive Officer of the Regulatory Authority of Bermuda, to discuss the latest developments and why industry players should take note of the benefits Bermuda offers, including data sovereignty, and traffic and network management.

strategic partner and provides a single point of contact to streamline the process, with a 60 – 75 day approval approach in line with best industry practice. Once the legislation passed, we then entered an exercise of industry benchmarking to establish the necessary fee structure which was finalised at the end of 2020. The fee structure has been developed to encourage systems to land.

Fiona Beck Denton, it is great to be chatting with you today. Perhaps you can start by giving a high-level overview of the latest developments in Bermuda and what they mean for the industry? Denton Williams Yes, absolutely. The Bermuda Government, the Regulatory Authority and the Bermuda Business Development Agency have been focused on working together to create a robust legislative framework for the development of the submarine cables industry in Bermuda, building on our long history and involvement in this space. A comprehensive report was conducted by EGS Survey in 2019 to look at all the factors required. The report concluded that there were two newly identified and geographically diverse landing spots suitable for submarine cables. Following consultation with stakeholders, a Submarine Protection Zone was established and incorporated into the legislation. Bermuda is unique in that we have also developed a dedicated business concierge service. Managed by the Regulatory Authority and supported by the Bermuda Business Development Agency, this service acts as a

Fiona Beck As we know, time is money and it is a crucial factor in the decision-making process when identifying a location to land a cable. You mentioned Bermuda’s efficiency in terms of the approval process, but can you shed some light on the specifics of what is required? Denton Williams To enable the Regulatory Authority to process an application as quickly as possible, it is prudent to consult with the Department of Environment and Natural Resources to agree the content and scope of the environmental impact assessment (EIA), which leads to the environmental impact statement (EIS). This allows for key environmental issues to be reviewed, understood and assessed by the government’s technical officers prior to the application. Following the submission of a complete application, together with the associated fees, the process normally takes 60 business days and a maximum 75 days. As I mentioned, we have a business concierge service in place and can work closely with the project developers to guide them through the process.

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Fiona Beck Can you tell us more about the significance of a Submarine Protection Zone? Denton Williams The Submarine Protection Zone provides two main advantages. Firstly, it supports the ability to approve an application within 60 to 75 business days. Although an environmental impact study will still be required by the applicant, the depth of that study will be significantly reduced and, as a result, it will be more cost effective. Secondly, the zone provides assurance to our applicant that their cables will be protected in our waters.

Fiona Beck Understanding that submarine cables, and their networks, are increasingly seen as a vital component of a country’s national infrastructure, what role can Bermuda play in the wider connectivity market? Denton Williams As a world-class financial jurisdiction, clearly the submarine cable industry has a key role to play in supporting Bermuda’s international business sector together with its innovative approach around fintech and digital assets for example, but in addition there is an opportunity for Bermuda to become the first Atlantic Digital Hub. Taking advantage of our unique location between North and South America, and Europe and Africa, Bermuda can be a branching unit for transatlantic cables. A separate fee structure for transit only cables has been developed with annual licence fees of $60k. The Bermuda Regulatory Authority has also become a member of the International Cable Protection Committee (ICPC) and we look forward to playing our role in sharing knowledge, information and experiences, and having an important dialogue with the global community. Fiona Beck Other than the attractive fee structure, can you tell us what advantages companies might benefit from when considering Bermuda as a landing site for transit cables? Denton Williams I have touched on our geographic location and sophisticated business eco-system, but another reason would be our ability to support data storage and provide independent sovereignty for that data. Furthermore, Bermuda can help to provide a diversified approach to network and traffic management. We have a significant and growing space and satellite industry, with a NASA earth monitoring station near the landing sites, and this industry is looking at complementary service offerings. In addition, for technology companies with global intellectual property companies in Bermuda, a hub would provide further economic substance for them. The island also has the added benefit of being able to provide captive insurance solutions for these companies and be home to head office operations.

Fiona Beck Companies considering using Bermuda as a landing site will have other needs. For example, what buildings are available near the landing sites for use as a landing station (or co-location station)? Denton Williams There are a number of available buildings for lease and, in fact, some of them are purpose-built data centres, essentially providing a plug and play option. We will happily work with clients on identifying the options available and more information can always be found on the Bermuda Land Development Company (BLDC) website https:// www.bldc.bm/leasing. Fiona Beck And, in a world where sustainability is high on the agenda, what access to alternative energy is available? Denton Williams Bermuda has been championing alternative energy with new policies in place, and the RA is leading the charge on this front, particularly with our Integrated Resource Plan which targets 85% of the island’s electricity supply being generated from renewable sources by 2035. There have been some significant developments with a new solar farm completed near the airport and there are additional opportunities for companies to looking to support their alternative energy strategy. Fiona Beck And, finally, who should people contact to find out more information about the process or if they have additional questions? Denton Williams You can contact the business concierge team at the Bermuda Business Development Agency by email at info@bda.bm or by phone +1 (441) 292 0632. If you want to learn more about doing business in Bermuda, I also encourage you to visit their website at www.bda.bm. STF

MARCH 2021 | ISSUE 117

FEATURE

LAKE TITICACA

A New Optical Portal in the Andean Altiplano

BY JORGE ORLANDO GARCÍA LOZANO

1.0 INTRODUCTION

rom the evaluation carried out on government telecommunications projects in Latin America, it is easy to conclude that the risks run by the winning contractors have historically been extremely high and are largely due to the predisposition of regulators to minimize the engineering of the design and move its scope, budget, and opportunity into the execution phase, where design is integrated with both construction and supervision and contractors find then the way to become wizards.

2.0 SCOPE OF WORK

On May 9, 2018, Fitel (Telecommunications Investment Fund) an entity attached to the Peruvian Ministry of Transport and Communications and Orocom SAC, signed the non-reimbursable financing contract called “ Broadband for Comprehensive Connectivity and Social Development

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for the Regions of Puno, Tacna, Moquegua and Junin”. The four initiatives were awarded by Proinversión in December 2017. Proinversion is the Specialized technical body attached to the Ministry of Economy and Finance and in charge to promotes Projects of national relevance in Perú. The “Consorcio Telecomunicaciones Rurales de Perú”, is the name agreed by Electricas de Medellin Perú (EDEMSA Perú), Amitel Perú Telecomunicaciones y Tuensa International Corporation, during the bidding process. Ethuss Group, a Colombian company operating in the infrastructure, electricity, ICT, oil and gas, mining, and metals sectors, oversees to its subsidiary Edemsa Peru”. At present, more than 5500 kilometers of fiber optics have been installed to reach around 120.000 families, the majority from Puno and Junín. In addition, 1,100 state-run school facilities, 550 health establishments and 70 police units will benefit at the end of the next winter season in the south hemisphere. Figure 1 particularly shows just the Scope of this paper,

transfer the designs, real budget, risks, and opportunities, to the execution phase, where they are integrated with construction and supervision. The ICPC Recommendation number 9 (Minimum Technical Require3.0 AREA OF INFLUENCE AND MAIN ments for a Desktop Study) was taken SCENARIO Figure 1 – Basic Straight-Line Diagram as reference to carry out both lake The Central Zone of the Andean survey and cable Installation. Altiplano Plateau as per Figure 2, The DTS of this project was a lake research exercise includes the basin of a complex hydric System known as that defined the strip to install the first underwater fiber TDPS (Titicaca, Desaguadero River, Poopó and Coipasa Salt Flat). Due to the conditions of humidity, solar radiation, temperature, and winds of the high plaTITICACA LAKE - A NEW OPTICAL PORT IN THE ANDEAN ALTIPLANO teau, the Desaguadero river belongs to an endorheic system, meaning, their waters are evaporated and does not drain into the Pacific Ocean, losing completely its flow when reach to Coipasa Salt Flat close Oruro city in Bolivia. All of them: Uyuni Salt Flat, Coipasa and Poopo Lakes besides Desaguadero River, are around 3700 m above level sea. Lake Titicaca is internationally protected by UNESCO as “Underwater Cultural Heritage of Humanity” and locally, by the ALT or “Autonomous Binational Authority of the Water System of Titicaca Lake”; in this sense, the viability of any project in this region must consider as sustenance, a great cultural and social benefit, and a null impact on the environmental issue. The medium voltage electrical interconnection projects implemented in 2008 and the telecomFigure 2 – ALT Autonomous Binational Authority of the Water System of Titicaca Lake munications project in August 2020 on the island, are complementary and unique in the world and DISTRIBUTION POWER NETWORK IN THE INFLUENCE ZONE OF THE ANAPIA PROJECT therefore opportunities for the development, social and tourism of this extraordinary place. Previous Figure shows in the center of Titicaca Minor Lake four (4) kilometers in diameter translucent yellow circle, with both Electropuno Medium Voltage cables and the Orocom underwater fiber optic cable. The red dots represent the capillarity of the 22.9 KV lines, although only a fraction of them were used as main route for fiber optic route. because due to its insular condition the Anapia Island, requires a special combination of both ADSS and underwater cables.

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4.0 DTS - DESKTOP SURVEY

From the evaluation carried out on government telecommunications projects in Latin America, it is easy to conclude that the risks run by the winning contractors have been historically high and are largely due to the predisposition of regulators to minimize engineering in the feasibility stage and

UNDERWATER CABLE CROSSING

AERIAL LAKE CROSSING AERIAL LAND CROSSING

Figure 3 – Underwater Cable Location

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FEATURE optic cable in Lake Titicaca. The lessons learned from the Submarine Cable industry and applied here with due diligence, facilitated the identification of risks in the short and medium term and showed the threats in the long term that could affect the availability of the complex interconnection between the populations of Anapia and Yunguyo, close to the Peru-Bolivia border. Figures 4, 5 and 6 were used to identify the types of cables Llote island and long spans crossing the lake. Seg 2 Seg 1 In the survey route and Iscaya Island according to the Osinergmin GISEM Mining Energy Map, it was found that the crossing over the lake between the Llote and Caana islands, in fact, corresponded to a pair of power cables at 22.9 KV level owned by Electropuno and laid in 2008, one of which is active and another one protection. Further information about Environment, Geology, fishing activity, sailing, eutrophication, local permits, binational lake activities, archeology, navigation charts, availability of barges, safety, behavior of the locals, customs, limitations to ingress into a natural reserve, climate, lightning storms, electromagnetic activity, windy and rainy season, temperature, currents, ice, solar radiation, droughts and floods, old civilizations, Aymara Language, customs, migrations, breeding of camelids, vicuñas, social life, treatment of outsiders, restrictions on access to vicuña sanctuaries and island villages due to Covid-19, and more details that depends on the deep believes, were investigated, and understood properly. According to the earthquake database available at Iris Earthquake Browser, the seismic activity has been extremely low during the last 30 years. As an alternative, although not valid from a legal point of view, the option of replacing the fiber optic cable with an array of microwave radio systems that could support the required minimum capacity of 1 Gbps was considered. Although propagation for the minimum distance of 35 kilometers was possible, the proposal was not validated.

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Figure 4 – Google View of the cables crossing the Minor Titicaca lake

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For the Anapia interconnection problem and after adapting the marine criteria to the lake environment of Titicaca, the feasibility analysis considered the 5 interconnections shown in Figure 6 and valued in Table 1. Option 5, for being shorter, economically, and technically feasible, was chosen to carry out the geophysical prospecting or characterization of the bottom, and a prerequisite for a safe laying. OPTIONS FOR INTERCONNECTION BETWEEN ED TINICACHI - ANAPIA HUYÑAIMARCA LAKE (PUEBLO ETERNO - AYMARA LANGUAGE)

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Tramo 7 Sobre I Isla Caana T3 Tramo 8 Sobre Lago

T4 Isla Pataguata

Lago Menor del Titicaca Lago Huyñaimarca (Pueblo Eterno)

Anapia

imagen tomada de mapa Minero Energetico Osinergmin https://gisem.osinergmin.gob.pe/ Mapa base : Topo Esri

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Figure 6 – Interconnection Options for Anapia Island with Ed Tinicachi

ANAPIA - TINICACHI INTERCONNECTION OPTIONS EVALUATION

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ANAPIA STATION

BIFURCATED SPLICE TINICAHI - YUNGIYO

The walk-down study, No SOURCE DESTI NO LENGTH [Km] REMARKS DTS and design, was 1 Punta Hermosa Anapia 15,00 Av oid 6 jumps ov er the lake, but long and heav y operations entrusted by EDEMSA 2 I sla I scaya Anapia 12,20 Av oid 5 jumps ov er the lake, but long and heav y operations to Telnes Peru SAC, who 3 I sla Llote I sla Yuspike 8,10 Av oid 4 jumps ov er the lake, Greater than 450 meters proposed as a solution the one-line diagram or SLD 4 I sla Llote I sla Pataguata 7,20 Av oid 3 jumps ov er the lake, Greater than 450 meters (Straight-Line Diagram) 5 Isla Llote Isla Caana 4,10 Avoid 1 jump over the lake of 4100 meters shown in Figure 7. The Table 1 – Interconnection Options SLD, shows 12 cable sections; six of which are UNDERWATER FIBER OPTIC CABLE BETWEEN ANAPIA ISLAND AND YUNGUYO PUNO PERU HUYÑAIMARCA - TITICACA MINOR LAKE highlighted with a thick STRAIGHT LINE DIAGRAM (SLD) blue line and correspond to the jumps of the MV line over Lake Huyñaimarca. Sections 2, 8 and 9 use 35-meter-high towers to Figure 7 – General SLD bridge spans of 943, 790 and 1140 meters in length respectively, while sections 1, 4 and 11, due to their distanc- a little more than 4100 meters, requires an interconnection with an underwater cable, like the one used by Electropuno es and location, required new posts of 12 meters high. to cross the same obstacle in 2008. The area of influence of the project according to the CNE (National Electricity Code) is Zone C, Area 1 (Ice Sleeve of 3 mm and Winds 5.0 LANDING POINTS DIAGRAMA UNIFILAR (SLD) of 52 km/h). The basic requirement SLD - INTERCONEXION CABLE SUBACUATICO ISLAS LLOTE - CAANA Aerial crossings over the of this project was to BMH BMH lake are identified by transallow the continuity of ODF Caana ODF Llote 10.60 Km 4.14 Km 23.57 Km lucent blue blocks down ADSS cables shown in ADSS ADSS LWP the central line, while the Figure 8, with a fiber optic 48 HILOS 48 HILOS 48 HILOS YUNGUYO ANAPIA OGB OGB underwater crossing is lounderwater one, using PLANTA SUMERGIDA PLANTA TERRESTRE PLANTA TERRESTRE cated between small yellow the same right of way of blocks in the middle. The Figure 8 – Wet Plant SLD the Electropuno for the aerial long spans fluctuate Medium Voltage power between 480 and 1140 line between the Llote meters and are points of and Caana islands. The high vulnerability due to acknowledge of previous the action of the winds power cable route was that blow on the lake, with taken as a reference for greater intensity during the searching a safe and close summer months, reaching to power landings. speeds of up to 70 km/ Due to the high probahour and more. bility of induction on the The average level of underwater cable armor Lake Titicaca is 3,810 when electric discharges meters with fluctuations occur in the area, it was of +3 and -2 meters above recommended to ground in flood and drought the entire shield of the seasons, respectively. The fiber optic underwater section number 6 due to its cable but taking care to Figure 11 – Geological Formation in Llote and Caana Islands always keep the central insurmountable distance of BMH1: Beach Manhole

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FEATURE ring isolated for the electroding function by sub-acoustic tones. Measurements of the induction voltage after underwater cable installation were around 4.5 Volts AC, but during a lightning storm, thousands of volts could be measured. The cable armor was connected to a special ground system installed in both beach manholes. According to the earthquake database available at Iris Earthquake Browser, the seismic activity has been extremely low during the last 30 years.

6.0 LACUSTRE SURVEY

The site survey was the geophysical prospecting exercise carried out during the months of April and May 2018 and August 2019 by the Peruvian company Gapash, using towed equipment based on acoustic backscattering technologies and oriented to know with good detail the bottom of the world highest lake in a strip of 150 meters wide by 4100 meters long, to safely lay the fiber optic cable required to interconnect the Anapia Island with the Capital’s District Yunguyo. The campaign included, among other obligations, the following: • Characterization and differential geo positioning of the predefined sounding lines around interest including all the precision bathymetry. • Generation of acoustic images from high frequency side scan sonars and their scientific interpretation. • Detection and mapping of biogenic gas leaks, seagrass meadows, dense, compact, and loose sediments, and identification of areas where the cable could be exposed. • Location of the Medium voltage cable of the Departmental Electricity Company. • Surveys of the lake bottom and sub-bottom profiles to determine the morphological variation, slopes abrupt changes, and reflectivity of the stratigraphic profiles in such a way that the recent layers could be easily isolated and estimate the probability of cable burial under its own weight. • High resolution magnetometric survey to determine anomalies because of the prox-

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Figure 12 – Earthquake history in Huyñaimarca Lake

Figure 13 – Sounding Lines in Huyñaimarca Lake

Figure 14 – Huyñaimarca lake Survey for Anapia Project

imity of the medium voltage lines parallel to the underwater fiber optic cable, as well as the presence of archaeological remains, walls, or vestiges of the Tihahuanaco Civilization. • Taking samples of surface sediments with a Van Veen type dredge to determine the granulometry by sieving. Due to the fine adjustment achieved during the survey, the route position list was defined, besides landing points, alter courses, profiles, slopes, currents, water temperatures, and the corresponding bill of materials. Underwent slight modifications were observed in the amount of articulated pipe protection, an at the same time due to steep slopes in the transition from the lake bottom to the two islands. Side Scan Sonar mosaics let discover fields of phanerogams, areas of fine sediment, presence of gas and the confirmation Figure 15 - SSS mosaic Over lake vegetation area near Isla Caana of the low slopes, with less than 0.7% in almost the IMAGEN 23 - LINEA DE SONDEO I-05 CON PERFILADOR DE SUBFONDO SBP (CREDITO INFORME GAPASH) entire submerged path. The observation of the types of rocks located in the vicinity of the beach manholes and the comparison of these with the geological map of the INGEMET (Geological and Mining and Metallurgical Institute of Peru) allowed additionally to validate the presence of sandstones and siltstones to slightly modify the amount of protection with articulated pipe up to 10 meters isobath. Thanks to the sounding with Side Scan Sonar, Figure 16 - SBP mosaic on the profile of the line axis several fields of phanerogams, areas of fine sediment, from the SSS at Km 3.0 and processed with a data acpresence of gas and the confirmation of low slopes were quisition software AquaScan and Hypack Navigation, to discovered, with less than 0.7% in almost the entire subwhich the 10 navigation lines agreed with Orocom were merged route. programmed. Due to the identification of limitations at both landTo determine the probability of burying the cable under ing points it was recommended the cable protection with its own weight and investigate the nature of the lake botarticulated pipes from beach manholes to the isobath of 11 tom a Chirp type Subfund Profiler (2-15 KHz) was used. meters depth. Sedimentary units and very marked horizons or limits of Figure 15 is an extract of the mosaic of images captured MARCH 2021 | ISSUE 117

FEATURE

Figure 17 - Traces of the consecutive magnetic anomalies

outcrops were detected as per figure 16 shows . As a prerequisite for the approval of the permits for laying the underwater cable in the Huyñaimarca Lagoon, the Ministry of Culture requires the CIRA Certificate of Non-Existence of Archaeological Remains under the surface, validated with a Magnetometer. This requirement is in line with the recent announcement by UNESCO to declare Lake Titicaca as an Underwater Cultural Heritage of Humanity. During the campaign carried out in June 2019 with a SeaSpy Magnetometer from Marine Magnetics, Gapash detected anomalies in 13 of the 40 sounding lines with values that fluctuated between 65 and 149 Nano Teslas, and in a direction perpendicular to the line reference line, values that were attributed to the high voltage line at 22.9 KV, which runs parallel to the axis of the laying of the communications cable. The following graph shows as an example, the magnetic profiles of the x-01, x-02 sounding lines. In each one of them you can see the peak in the measurement caused by the high voltage line.

7.0 LAYING WORKS

In the Lake Titicaca project towards the island of Anapia, the underwater section can be considered as the weakest link in the chain, for this reason the construction company made a significant corporate effort so that the variables that cause risks were minimized to the maximum, for example: • A cable was chosen that conserves the Weight / Protection ratio, Light Protected type of 26 mm in diameter and one kilogram per meter, so that its handling in the lake was possible. • Due to the height of the lake above sea level, having a barge for laying was a challenge overcome when the only viable option during the Covid-19 pandemic was to ironically use the municipality’s wooden plank, used for the transport of vehicles and that, during the DTS, was observed, but was immediately discarded. • For the above reason and without sufficient autonomy and maneuverability, operating with winds greater than 4 meters per second, implied risks of loops or suspended cables if the speed of the cable fall into the lake could not be controlled. The buoyancy tests finally

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Figure 18 – Route profile along the laying axes

Table 2 – Estimation of installation Time using as reference barge and wind speed.

ROUTE POSITION LIST (RPL) - SUBAQUATIC CABLE LLOTE - CAANA ISLAND - MINOR TICACA LAKE (HUYÑAIMARCA) Pos. No

Event

Latitud

Relative Height Above Level Sea (m)

Longitud

Dist. Between Position (m)

Slack %

Slack (m)

Acum. Cable Type Lenght (m)

Bearer

Slope

Remarks

BMH - Inicio TA

-16,2472

-68,9346

3833,0

37,57

0,02

Linea Agua Isla Llote

-16,2473

-68,9342

3820,0

88,29

0,02

0,01

37,58

LWP

111,71°

-19,097°

Roca

Fin TA (Tuberia Articulada)

-16,2477

-68,9335

3814,0

704,31

0,02

125,89

LWP

114,95°

-3,890°

Roca

Cambio Curso Tendido

-16,2508

-68,9278

3814,0

3132,02

0,02

0,14

830,34

LWP

119,77°

0,000°

Arcillas

Inicio TA - Tuberia Articulada

-16,2681

-68,9046

3815,0

110,64

0,02

0,63

3962,98

LWP

127,92°

0,018°

Arcillas

Cambio Curso Horizontal

-16,2687

-68,9038

3820,0

10,23

0,02

4073,64

LWP

128,17°

2,589°

Roca

Cambio Curso Vertical

-16,2687

-68,9037

3822,0

33,52

0,02

0,00

4083,87

LWP

101,28°

11,068°

Roca

BMH - Fin TA

-16,2689

-68,9034

3840,0

0,01

4117,40

LWP

126,65°

28,247°

Roca

Altura de referencia oficial : 3810 m snm - Altura Medida con Estacion : 3856.48 msnm

Table 3 – Route Position List RPL Isla Llote – isla Caana

showed that there was a sufficient margin of safety so that compliance was carried out. • Catamaran construction options were considered due to the unavailability in the ports of Puno Peru and Tiquina Bolivia, but due to cost and opportunity they were ruled out. • Finally, the buoyancy calculations and tests carried out on the wooden barge of the municipality of Anapia, were endorsed by the port authorities and they were loaded accordingly, moved to the work area, and laid with the safety margins that Providence gave us. • In return for local permits, there was a need to have native personnel available during the laying. This balance was decisive in the success of the pre- and post-operations, but particularly in the installation of the articulated pipe. • To validate the absence of suspensions or loops throughout the laying, the inspection work was carried out for a week using professional divers. Table 2 contains the information used in the laying work plan programming and included the dynamic constant of the cable, understanding this as the sinking speed of the cable in the water, for five desirable values of net speed. The unavailability around a commercial barge capable of carrying out the maneuvers of buoyancy, lift and controlled discharge of the cable to the lake, led to the need to devise a supplementary and mandatory plan that would minimize the risk of the operation of laid out with the utmost of caution and ingenuity. The time, doubly critical due to the Covid-19 Pandemic, the imminent arrival of the strong wind season and the demands of the local authorities to involve their inhabitants in the accompaniment and participation processes were extremely fortunate.

Figure 19 – ZTT Submarine cable LWP

8.0 OPTICAL MEASUREMENTS

The optical measurements are intended to comply with Pronatel´s requirement and validate compliance with the quality specifications of the ZTT manufacturer’s fibers in the 1310 and 1550 nanometer windows for each of the 48 wires of SOFC LWP [1.9] 60 KN cable. Traces of the attenuation measurement carried out on August 21, 2020 to the 48 wires of the Anapia-Ed Tinocachi underwater Cable system. The area shaded in blue between Markers A and B located at 6.3548 km and 10.4649 km, corresponds to the passage of the cable through Lake Huyñaimarca. The results show complete compliance with both the land and submerged plants. The first 980 meters at the height of event 2, represent the line of the launch fiber. The attenuation of all the wires at 1550 nm averages 0.19 dB/Km, exceeding the Pronatel requirement by 5%.

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FEATURE Figure 20 – ZTT Submarine cable LWP

9.0 POST-LAY INSPECTION ON DEFINITIVE ROUTE

Visual verification of the submerged plant and its terrestrial interfaces is one of the final requirements demanded in the Acceptance Test Protocols for an underwater or aquatic cable. Due to the identification of limitations at both landing points it was recommended the cable protection with articulated pipes from beach manholes to the 11 meters depth. The following sequence of images corresponds to screenshots of the videos obtained by the divers, in the reconnaissance dives to verify the burial of the cable, the arrangement of the articulated pipe, the nature of the lake bottom, the transit from the insular slope to the sedimentary plane and the phanerogam meadows affected by the eutrophication of lake waters as a consequence of the dumping of

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chemicals from fertilizers used in agriculture, grazing and dumping of sewage or fishing farms into the lake.

10.0 CONCLUSION

Figure 21 – ZTT Submarine cable LWP

The bottom of the bed of Lake Huyñaimarca located at the northern end of the Andean Altiplano or Meseta del Collao on the Peru - Bolivia border, is the scene of the highest underwater optical telecommunications project in the world. The ZTT LWP 60 KN cable was laid on August 7, 2020 in just eight hours, although the project took more than 28 months to complete. This singular imbalance, despite the social urgency of the initiative, warns of the need to balance what is politically correct, with diligent and appropriate action. The maintenance work for the cable within the lake may be zero during its useful life of 25 years, but not its supervi-

sion. The ICPC (International Committee for the Protection of Submarine Cables) recommends updating the cartography and instructing residents through brochures about the possibility of sinking their boats if the artisanal anchors become entangled in the cable. The strategic location of Anapia is comparable to that of Tiahuanaco centuries ago, for this reason, the invitation arises from this document so that through International Cooperation and with the participation of first-line actors such as MTC Peru, Pronatel, Suboptic, UNESCO , BID, JHU, National Geographic, ALT itself, Orocom, the Huyñaimarca Project and Orocom’s Telecommunications services, among others, initiatives can be integrated that open the cable reservation threads and take them to health, environmental and cultural platforms , all of them based on the Internet of Things. Help to improve the quality of life of communities surrounding Titicaca lake due to water contamination by eutrophication or poisoning for concentration of nitrogen fertilizers for agriculture and grazing, should be a goal for every human being. The Andean Altiplano is a treasure of humanity that must be appreciated personally, it is the meeting point (UYUNI) of our civilization with the Tiahuanaco or Inca; It is the portal or “White Spot” that Edwin Aldrin noticed from the moon in May 1969 and through which the wonders that the “eternal people” or Huyñaimarca in the Aymara language can escape. What is happening now in Chile, Brazil, and Peru, is in my opinion the reaffirmation of the opening of the South American optical portal. Projects along rivers and lakes in these countries are progressing little by little. Soon, we will achieve the union of the two oceans through the Amazon Basin and the Peruvian Andes and why not redundancy through Patagonia. STF JORGE ORLANDO GARCÍA LOZANO is an observer of the telecommunications sector and practitioner of the lessons on submarine cables given by the former veterans from Mount Kemble Morristown (AT&T USA), Lanion (Alcatel France), Kamifukuoka (KDD Japan) and Barranquilla (Telecom Colombia) since 1990. He is defender of the searching for a proposal to embrace the continents with land and underwater fiber optic cables that follow the Silk Road and crossing both Mediterranean Sea, Atlantic and Pacific Oceans to finally close the loop opened for centuries through the Amazon River and the Andes mountains. He presented papers at Suboptic in Baltimore 2007, Yokohama 2010, Paris 2013,

Figure 22 – Underwater cable in Huyñaimarca Lake (Navionics Charts)

and Louisiana 2019. Thanks to SubTel Forum magazine the Submarine cable Industry will have in this issue details of the exercise of laying the first fiber optic cable on the bed of the navigable lake at highest level above sea. REFERENCES Barge Buoyancy Calculation Report, Celtec SCRL. Project “installation of the Underwater Cable - Huyñaimarca Puno Lake”, July 29, 2020. Optical Measurements Edemsa, August 8, August 19, December 2020. Gapash Surveys reports, includes AutoCad plans, KMZ, Videos and photographs. Telnes Peru Reports, DTS Desk Study, Voltage Calculations, Cable Specifications, Technical Concepts, Survey and Laying Reference Terms. https://www.iscpc.org/publications/recommendations/ https://suboptic2019.com/download/5277/ Study on Submarine Cable tension During Laying, Nobuyuki Wa and Tetsuro Yabuta, IEEE Journal of Oceanic Engineering, Vol OE-8 N ° 4, October 1983 Tension Analysis of Submarine Cables During Laying Operations, N Yang, D-S Yang and X.L. Zhou, The Open Civil Engineering Journal, 2013, 7, 282-291. Training Text No. 19, International Optical Fiber Submarine Cable System Engineering Course, Cable Laying and Burial, KDD Kokusai Denshin Denwa, 1966. Protection of the underwater cultural heritage in Lake Titicaca. https://es.unesco.org/news/proteccion-del-patrimonio-cultural-subacuatico-lago-titicaca Lake Titicaca: Synthesis of Current Limnological Knowledge https://horizon.documentation.ird.fr/exl-doc/pleins_textes/divers08-10/36603.pdf https://www.lago-titicaca.com/en/the-future/community-hopes https://www.subtel.gob.cl/subtel-recibe-ofertas-de-tres-empresas-para-la-macrozona-sur-del-proyecto-fibra-optica-nacional/ https://seabed2030.org/ RFI - Operador Neutro do Projeto Piloto do Programa NORTE CONECTADO, MCom – Ministério das Comunicações, RNP – Rede Nacional de Ensino e Pesquisa, Programa Norte Conectado, Projeto Piloto - Infovia 00 – Macapá – Santarém.

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BLAST FROM THE PAST

A “Non-Technical” Perspective on the First Trans-Atlantic Submarine Cable BY CHRIS VAN ZINNICQ BERGMANN

170 years ago, the world’s first working submarine telegraph cable was laid across the English Channel, followed by cables from England to Holland and Ireland and, in 1854, from Italy to Sardinia and Corsica. At that time, an American businessman named Cyrus W. Field came up with the plan to lay a cable across the Atlantic Ocean and thereby connect the United States to Europe. This article will mainly highlight the financial and organizational side of what was then an astonishing project, given the fact that the longest operating submarine cable at that time ran 110 miles and at a depth of no more than 300 fathoms (1 fathom = 6 feet). The Atlantic cable would have to be 2,000 miles long and reach a depth of 2,600 fathoms. Field realized that owning the means of instant communication between North America and Europe (instead of having to send messages by ship which took weeks) could potentially generate formidable profits. But as will be described, the project encountered numerous setbacks and failures and it ultimately took

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twelve years and a very large dose of perseverance to bring it over the finish line. The first part of the plan was to build a link from New York to Newfoundland as that island was the closest point in North America to Europe (Ireland in fact). This meant completing an existing line from St. John’s across southern Newfoundland, laying a submarine cable across the Cabot Strait between Newfoundland and Cape Breton Island and building a new line on Cape Breton Island to connect to the existing telegraph system in Nova Scotia and from there to the United States. Field managed to attract a group of wealthy American investors to back the new venture and they committed themselves to raise $1.5 million in capital. At that time, this was a huge amount (the entire federal budget in 1854 came to $58 million and in those days $1,000 per year was enough income for a family to live a modest, middle-class life), but it would turn out to be nowhere near sufficient. Having formed the “New York, Newfoundland, and

London Telegraph Company” and having obtained a char- weeks for messages to reach Canada, two months to India and three months or more to New Zealand. Field met ter from the government of Newfoundland for the excluwith various persons in high places and got an excellent sive right to lay cables touching the island (for a period of result: the British government agreed to provide ships for fifty years) in the spring of 1854, it would take well over one year to finish just the construction of the terrestrial ca- soundings and the cable laying itself. It also agreed to pay, once the cable was working, $14,000 a year, provided that ble on the island at a cost of $500,000, which was already government messages had prione third of the company’s ority over all others except those capital. Meanwhile, Cyrus Field of the government of the United went to England to arrange States (if it agreed to enter into the manufacturing of cable for a similar arrangement). The crossing the Cabot Strait. At amount of $14,000 was equal to that time only Britain had the the interest (at 4%) on the esticapability to produce submamated cost of laying the cable of rine telegraph cable, which was $350,000 (based on their values mainly due to its monopoly relative to gold, in those days on gutta-percha (which came one pound was worth slightly from trees native to Malaysia), a more than five dollars). polymer similar to rubber with This was an important deal: the crucial property that – unit meant that the final route like rubber - it does not deteriwould be surveyed at no cost to orate when immersed in water the company, that there was no for long periods. As such, in the need to spend money on charmid-19th century gutta-percha tering and outfitting oceangoing was the perfect material for steamships to lay the cable, and insulating submarine cables. that investors had certainty The first attempt to cross the that, once the cable was up and Cabot Strait became a total failure and it was not until the Cyrus Field, picture from the book “The Atlantic Telegraph” (1865) running, the interest on their investment would be secure. The summer of 1856 that the comcompany decided to ask for the pany finally had a connection running from New York to Newfoundland (and as such was same terms from the United States government. Meanwhile, Cyrus Field went on a road tour across the United one third on the way to Europe). Its capital was also nearly Kingdom to present the cable project to potential investors. exhausted: the initial fiasco of the cable-laying attempt had The fact that the scheme attracted a lot of publicity was cost the company $350,000, all of it a dead loss, and Field of course helpful and the entire stock issue of the Atlanand his partners had burnt through their original personal tic Telegraph Company, 350 shares at $1,000 each, was investments (Field had invested $200,000). The directors subscribed within a couple of weeks by investors from all decided to raise additional capital with an issue of bonds, over Britain. Field himself subscribed to 88 shares, which which they took up themselves. But a great deal more money would be needed to cross the Atlantic and that could only he planned to sell to investors in the United States. As it turned out, he was able to sell only 27 and some of them be raised in Britain (which was the wealthiest nation in the at a loss. As such, Field became by far the largest Ameriworld in those days). can shareholder with 61 shares representing an investment So far, all the investment had been made by Americans, of $305,000, which together with his earlier investment but Field wanted to change that and in October 1856 formed a British corporation, the “Atlantic Telegraph Com- became the great majority of his assets and meant that his personal prosperity was now inextricably linked to the pany”. He also realized that the British government should success or failure of the Atlantic cable project. have an important interest in the success of long-distance When Cyrus Field returned to the United States in submarine cables because it would vitally improve the December 1856, it turned out that there was serious oppoway the vast British empire could be governed. Before the sition in Congress to an agreement along the lines of the advent of submarine cable communications, it took two MARCH 2021 | ISSUE 117

FEATURE with failure. Within a week after their British one. It took weeks of hard lobdeparture on the 6th of August 1857, bying in Washington to finally get the the Niagara had lost the cable because necessary legislation passed by a single of a break and the fleet had to abort vote in the Senate (and not much more the effort and return to Plymouth. in the House). The act granted the The board of directors of the AtlanNew York, Newfoundland, and Lontic Telegraph Company decided that it don Telegraph Company essentially the was not possible to launch a second atsame deal as the British government tempt that year. 400 miles of cable had had given the Atlantic Telegraph Combeen lost and there was not enough pany in terms of subsidy, surveying, and time to manufacture more before the ships. autumn storms would make another Field and the directors were now cable laying attempt too dangerous. very eager to get the cable completed in the summer of 1857, because the sooner it started operating, the sooner the companies would begin to receive the $140,000 a year in payments from the British and American governments as well as being able to start generating revenues from other customers. Also, public interest in the project was massive. However, the rush to get the project completed would turn out to be the biggest mistake in the entire endeavor, as decisions were based on considerations of speed and cost and neglected the need to find the best design for the cable. The cost of manuThe Agamemnon and Niagara taking in the last of the telegraphic cable in the Keyham dockyard, Devonport, England facturing the required 2,500 miles of the cable Still, valuable lessons had been learned, especially with recame to a total amount of $225,000 ($40 per mile for the gard to required improvements of the paying-out machincopper core and $50 for the armor). In 1857 there were no ery and also the need for better training of the crews and ships that could carry 2,500 miles of submarine cable with thorough rehearsals of the various cable laying maneuvers. a weight of 2,500 tons. This meant that two ships had to Fortunately, the company had been able to raise be deployed. It was decided to start laying the cable from $100,000 in additional capital from its shareholders in the Irish side by one ship (the “USS Niagara”, at that point Britain, because the American economy had gone into a the largest warship in the U.S. Navy) and then splice it at a deep recession in 1857 – which would last for four years point in the middle of the Atlantic, from where the other and there was no investment capital available on that side ship (the “HMS Agamemnon”, an old fashioned wooden of the Pond. By spring 1858 the second expedition to lay ship equipped with a steam engine) would lay the cable the Atlantic cable came into action. Again, the Niagara towards Newfoundland. However, this first attempt met

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Map of the 1858 Atlantic Cable route from Frank Leslie’s Illustrated Newspaper, August 21, 1858

and the Agamemnon were loaded with the cable and after some practicing rounds in the Bay of Biscay the ships left for a point in the mid-Atlantic, because this time the cable would be laid simultaneously by both ships, one heading for Ireland and the other for Newfoundland (thereby also halving the time needed to lay the cable). This second attempt almost met its demise right away as the fleet hit a major storm which lasted for six days and brought the Agamemnon to the brink of sinking. Finally, however, the storm subsided and on the 25th of June 1858 the ships reached the midpoint where the cable was spliced. The ships then parted and went on their way to the respective landing points in Ireland and Newfoundland. But misfortune hit again: the cable on the Agamemnon snapped and was irretrievably lost (it turned out that the storm had caused vital damage to the cable stored on the Agamemnon). And thus, the project had failed again for the second year in a row. Once the ships had returned to Ireland, Cyrus Field went immediately back to London to confer with the board of directors and convince them to try again. Sir William Brown, the chairman, was extremely disappointed and wanted to liquidate the company and be done with it. He and the vice chairman, T.H. Brooking, tendered their resignations and jumped ship. But Field was not the type of a man to throw in the towel. He pointed out to the board that only 300 miles of cable had been lost, that there was enough left to get the job done and that the ships were

still available for another attempt. The board realized that there was little to lose (except a couple of thousand miles of submarine cable of dubious resale value) and so decided to give the project another try. On the 17th of July 1858, the fleet left the Irish coast once more. This time – although also this third attempt encountered its fair share of challenges - success seemed to be finally at hand. On the 5th of August, the Niagara reached the coast of Newfoundland and the cable was connected onshore. On the other side of the Atlantic, the Agamemnon reached Valentia on the Irish coast and the cable was connected there to a landline back to London. While the international press celebrated this as a world transforming event, there were still some preparations needed before messages could begin to flow back and forth. But finally, on the 16th of August 1858 Queen Victoria and President James Buchanan exchanged the first messages, which led to an outburst of celebrations on both sides of the Atlantic. What was not known to the general public was the fact that the Queen’s message of 99 words had taken sixteen and a half hours to be transmitted (i.e., an average of ten minutes per word) and that as such the cable was not functioning very well at all. And then, on the 1st of September, the cable went dead and remained so despite strenuous efforts to revive it. The earlier jubilations turned into a very negative sentiment and claims arose that the whole undertaking had been a fraud, that there was no Atlantic cable and that MARCH 2021 | ISSUE 117

FEATURE

The Great Eastern leaving Sheerness with the 1866 Atlantic cable on board

the Queen’s message had been sent by ship (a century later, there have of course been similar claims that the moon landing never took place and that the whole thing had been recorded in a television studio…). On the other hand, just before the cable stopped functioning there had been a perfect “proof of concept”: At the end of August, the British government had used the cable to stop two regiments from boarding ship at Halifax, Nova Scotia, and sail for India (they were meant to get involved in putting down the “Indian Mutiny” which was coming to an end anyway). The ability to change orders at such short notice by sending a message through the Atlantic cable saved the government around $50,000 (or one seventh of the total investment which now unfortunately was lying useless at the bottom of the ocean). Despite the setback in the Atlantic and other failures (the cable laid in the Red Sea to link Egypt and India went down the next year at a cost of $800,000), Field and his partners were not going to give up. A commission of inquiry was set up in Britain to investigate what had gone wrong with submarine telegraphy up to that point. With regard to the Atlantic cable, the main conclusion was that the Atlantic

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Telegraph Company had been too much in a rush to get the project completed. Cyrus Field was now back on the road again trying to attract new investors, but after the failure of 1858 raising fresh money was a very slow process. People were still very interested in the project but putting money into it turned out to be a different matter. Only in New York, where he was well connected, did Field manage to raise $330,000. Better results were achieved in England, where an amount of $220,000 was raised. However, all combined it was still only half the amount that was needed. Also, the American Civil War was by now raging in full swing. The breakthrough came when Field returned to England in January 1864 and met Thomas Brassey, who had made a fortune by building railroad networks across the globe. After thorough examination of the project, Brassey decided to invest in it and this gave Field the credibility to raise money from others as well. In April 1864, the Gutta Percha Company, which had manufactured the core of the first cable, merged with Glass, Elliott & Company, which had provided the sheathing of that cable, to form the Telegraph Construction and Main-

tenance Company (which would dominate the field of submarine cable manufacturing for the next century). The new company quickly arranged to supply the rest of the required capital of $315,000 and agreed to take shares in the Atlantic Telegraph Company, once the cable was working, as its profit. This meant that six years after the failure in 1858, the funding for another attempt was now once more in place. Another breakthrough was that the steamship Great Eastern became available for the cable project. It was by far the largest ship in the world (with a length of 693 feet more than twice as large as the Niagara and Agamemnon combined). The owners offered the ship for free, provided that they would receive $50,000 in Atlantic Telegraph Company stock upon successful completion of the project. Only British ships were now involved in the project and ninety percent of the capital was British, as was nearly all the technical expertise. Also, the cable itself had been designed and manufactured in Britain. After seven long years, the fleet left the Irish coast near Valentia on the 23rd of July 1865 and headed for Newfoundland. Alas: also, this expedition would end in failure when after several breaks the cable could not be retrieved anymore and the Great Eastern had to make her way back to Britain. People would have been forgiven to think that this time it was the end of the road. But the directors were convinced that ultimate success was around the corner and that the business potential was so large that a whole new cable should be laid the next year. Also, the lost cable should be raised in mid-ocean and be completed as well. The Telegraph Construction and Maintenance Company offered to lay the new cable (at an estimated cost of $500,000) and take its profit in Atlantic Telegraph Company stock at the rate of 20 percent of the construction cost. The Atlantic Telegraph Company decided to raise $600,000 by issuing 120,000 shares of preferred stock and pay a junk-bond rate of 12 percent. On Friday, the 13th of July 1866, the Great Eastern and accompanying ships left once more the Irish coast and were headed for final success! On the 27th of July, the fleet arrived at the landing point at Trinity Bay on Newfoundland. The cable got spliced and soon after Queen Victoria and President Andrew Johnson exchanged congratulatory messages. Commercial traffic followed quickly thereafter and an immediate effect of the cable becoming operational was that the financial markets in London and New York became more or less equalized. The following month, the Great Eastern sailed off again to complete the cable which had to be abandoned the year before. After some difficulties to retrieve the cable from the

bottom of the ocean the splice was made and the second cable across the Atlantic was soon in place as well. Besides doubling the capacity, the second cable enabled continuous operation of the system (even if one cable was down for repair or maintenance). From 1866 to the present day, the rest of course is history… At first, the rates for sending messages through the cable were set at a very high level: $10 per word with a minimum of ten words. This limited prospective customers to very large businesses and very rich individuals. Still, between the end of July and the end of October 1867, a total of 2,772 messages were sent across the Atlantic, producing revenue of about $2,500 a day. However, at this rate only about five percent of the capacity was being utilized, so the company decided to cut the rates by half (charging $46.80 for a ten-word message) and revenue increased to $2,800 a day as more people began to utilize the cable. Prices continued to fall after more cables had been constructed (by 1900 there was a total of fifteen cables across the Atlantic). It also interesting that private initiative brought about the first connection across the Atlantic, only to be followed for a long time in the 20th century by cables built by carrier consortia that consisted of European state-owned telephone companies and AT&T, in those days the long distance monopolist in the United States. Not until the late 90s, when a raft of fiber-optic cable systems was built during the Internet bubble days, did private initiatives return. Fast forward to 2021 and the Atlantic cable sector is now of course being dominated by Big Tech investment. “Grace Hopper” and “Amitié”, the latest cable projects that have been announced in the past twelve months, will each have 16 fiber pairs with a total capacity of more than 300Tbps. Allowing for inflation, the cost of these systems is actually quite comparable to what the first trans-Atlantic cable had cost to be built one and a half century ago. The difference is of course that nowadays it takes only a second to transmit the entire contents of the Library of Congress… STF Most of the information in this article is based on John Steele Gordon’s book “A Thread Across the Ocean” (Walker Publishing, 2002) and Bill Burns’ “Atlantic Cable” website (atlantic-cable.com).

CHRIS VAN ZINNICQ BERGMANN is Investment Development Manager for WFN Strategies and has been in the submarine cable sector for over twenty years, working in Europe, the U.S., and Asia for Global Crossing, Pacnet and Global Cloud Xchange. Since 2020, he is an independent consultant in Amsterdam, The Netherlands, and is involved in the f inancial and commercial development of new subsea cable projects.

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We possess an ISO 9001: 2015 accredited management system and ISO 27001:2013 InfoSec program for the implementation of submarine fiber cable systems for commercial, governmental and offshore energy companies throughout the world. We have served the industry for 20 years and received the ISO 9001:2015 and ISO 27001:2013 certified designer and for Exports. President’s “E” Award implementer of submarine fiber cable systems for commercial, governmental and oil & gas companies.

FEATURE

ALL MARINE PROJECTS DESERVE THE VERY GREENEST OF UXO SOLUTIONS BY ANDREW WOOLLVEN AND HARDEEP SIDHU

uman intervention and encroachment into the marine environment are growing at an unprecedented pace. There are predictions for example, that by the early part of the twenty-first century in excess of 70% of the population of the United States will be located in coastal regions. As our reliance on renewable energies grows, large areas of coastal zone and shallow seas are being taken up by offshore windfarms and will no doubt be followed in the near future by wave and tidal power generation. Growing global population demands increased infrastructure developments that in turn require connectivity for power transmission and communications. Developments such as these face a significant threat from one other human activity, war. It is estimated that the two world wars left approximately 1.6 million tonnes of munitions in the German North Sea and Baltic Sea, while WWII resulted in excess of 3,800 shipwrecks with unknown quantities of unexploded ordnance (UXO) in the East Asian-Pacific region alone. Munitions from conflicts, firing ranges, training exercises and wrecks include air-delivered bombs, land and sea mines, torpedoes, depth charges, projectiles and chemical weapons. These munitions are not only a potentially devastating explosive risk but also present risks from carcinogens and chemical (metals and organics). Disposal therefore demands techniques that offer the highest level of safety and lowest impacts on the physical and natural environments. Disposal by ‘Low Order’ (LO) deflagration safeguards marine life and the seabed, and generally costs

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less than conventional ‘High Order’ (HO) detonations. Consequently, support for LO deflagration is now growing amongst environmental support groups and offshore sectors.

LOW ORDER DEFLAGRATION

The conventional HO detonation method of disposal of UXO is effectively unchanged since the end of WWII and requires a bulk donor charge (usually 5-25 kilograms of explosive) to be placed next to the unexploded ordnance and detonated. This causes the UXO to detonate with its full design force, with highly destructive results to both the seabed and marine life. LO deflagration is the process of burning out the explosive fill of an item of UXO to render it safe, provided the munition casing is intact. A small, shaped charge (typically 15-300 grams) is used to inject a high velocity plasma jet through the UXO casing to instantaneously ignite (not detonate) the explosive contents of the UXO. The explosive content burns at very high temperatures (circa 5000°C), releasing gases, increasing the internal pressure and causing the casing to burst open, without the UXO detonating. The explosive contents are oxygen enriched, containing sufficient oxygen to burn without needing air, which is why UXO is able to function underwater where there is no air to fuel the detonation. The explosive material/fill is contained within the munition during deflagration and not spread over the surrounding environment.

LO deflagration technology was developed in the United Kingdom by Alford Technologies, a world-leading supplier of specialist user-filled explosive tools to militaries and law enforcement agencies. The technology has been in existence for over 15 years and is currently in use by the navies of the United Kingdom, United States and 15 other nations. Deflagration has been used extensively in underwater UXO disposal for military applications Figure 1: Vulcan and Pluton deflagration charge systems. and recently for a commercial operation to clear ordnance from a former sea firing range in Ha- in order to reduce the impact of disposal on migrating waii, now designated as a protected National Marine Park. cetaceans. This success led to further testing the followTwo LO deflagration systems are presently available for ing year at Garvie Island off the north coast of Scotland, commercial operations, depending on the nature of the involving the UK’s Royal Navy. This trial demonstrated that UXO to be disposed of. Though the Vulcan system has a small charge with only 30-50 grams of explosive could been operational for the last 15 years, it has been comcause a 1000-pound bomb to LO deflagrate consistently. mercially available only in the last 18 months. This system Since then, numerous navies around the world adopted LO has been deployed against a wider range of munitions deflagration systems for underwater UXO clearance. than any other system, from grenades to rockets and deep In October 2019, Eodex and Alford Technologies dipenetration bombs. It carries an explosive charge weight rectly supported a study funded by the UK’s Department of 15-50 grams. Pluton is a larger variant of Vulcan with for Business, Energy and Industrial Strategy (BEIS) to the ability to carry 50-300 understand the difference in grams of explosive charge magnitude between LO defand is used against larger or lagration and conventional thicker-skinned munitions. HO detonation. The NationPluton is configurable with al Physical Laboratory and different projectile types Loughborough University for a variety of underwater were able to validate the very explosive ordnance disposal significant blast noise miti(EOD) techniques and is gation benefits of using the intrinsically safe from radio Vulcan system. The results frequency interference. It showed that for LO deflaalso has three independent gration, noise does not insafety breaks, including a crease with increased size of safe to arm system, providing the target UXO; deflagrating both the operator and dea 5-kilogram charge yielded Figure 2: Peak noise pressure versus charge size. ployment systems maximum the same peak noise as deflasafety during any disposal grating a 500-kilogram UXO operation. These systems are currently the only proven LO item. On the other hand, the results showed that the peak deflagration systems available on the commercial market, noise for HO detonation increases linearly with explosive with an extensive track record of success against a raft of weight of the UXO. The largest high order charge tested different munitions. of 18.7 kilograms was 11 times louder than the equivalent low order. For 250 kilograms of explosive charge, peak noise for HO detonation was 700 times that of LO deflagration. TRIALS AND VERIFICATIONS In 2002, the US Navy and Alford Technologies conduct- Video footage of this is available at www.eodex.co.uk and it is worth noting that LO deflagration never produces any ed successful underwater LO deflagration trials in Hawaii MARCH 2021 | ISSUE 117

FEATURE more noise than you hear on the video. To put this into an environmental context, LO deflagration greatly reduces the danger distances to marine life, particularly to marine mammals. These zones of influence are reduced from tens of kilometres for HO detonations to literally tens of metres for LO deflagration, with the added benefit of maintaining seabed integrity. This therefore allows all mitigation measures to be conducted on a very local level without risk of harm to marine life. The diagram shows the zones of influence of detonation and deflagration for a 500-pound bomb in 30 meters of water, ranging from the kill zone in black to possible minor disturbance in green. Detonation produces a kill zone out to 50 metres while none exists for deflagration. The zone of minor disturbance extends over 30 kilometres for detonation against up to 750 metres for deflagration. No data exist comparing the shockwaves produced by LO deflagration and HO detonation, but experience has shown that LO deflagration is probably equivalent to possibly less than 1% of the magnitude of a full HO detonation. Until the BEIS trial, no independent data existed comparing deflagration and detonation blast noise. The final results provide compelling justification for deflagration to be used as the default means for disposing of UXO. They also provide various regulatory and advisory agencies, such as the UK’s Department for Environment, Food and Rural Affairs, Marine Management Organisation and

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Figure 3: Blast impact zones of influence high and low order disposal.

Joint Nature Conservation Committee, the ability to apply appropriate mitigation measures for licencing offshore UXO clearance operations.

OPERATIONAL ASPECTS

The final objective of a disposal campaign is to ensure that the risk of encountering UXO during any planned activity, such as cable lay and burial, is reduced to ‘As Low As Reasonably Practicable’ (ALARP). The process commences

Figure 4: UXO identification and disposal workflow to reduce risk to ALARP.

with pre-operational ‘mission consultancy’ whereby a clear plan is developed detailing amongst others, objectives, resources, methodologies, risks, contingencies and desired outcomes. The next step is to mobilise resources for UXO investigation and positive identification, which depending on the water depths and conditions, will be diver and/or remotely-operated vehicle (ROV ) spreads. Targets will be investigated that were previously determined to be unavoidable potential UXO during an earlier and comprehensive geophysical survey. Items found to be non-UXO may be left in situ or recovered for shoreside disposal, and an Explosive Free Certificate (EFC) issued. If confirmed UXO is located, a disposal strategy is formulated based on an assessment of the UXO itself, existing assets, secondary hazards and operational risks. Deflagration requires greater insight and expertise than detonation and the precise methodology will be specific to the UXO at hand. Parameters regarding the UXO need to be understood such as country of origin, role/function, net explosive quantity (NEQ), fusing, identification of component parts, nature of fill (high explosive, phosphate, chemical, other?), sensitivity, initiation method, environmental factors (water depth, visibility, currents, etc.), complexity, (single or multiple targets) and the presence of any self‐destruct mechanisms. Possible damage to assets and secondary hazards must be considered in terms of personnel, vessels, existing subsea infrastructure, marine life, blast damage to the seabed and terrestrial impacts if close to land or in inter-tidal areas. Operational risks must be considered such as personnel experience levels, possible outcomes of lifting a UXO (seabed suction or uncontrolled ascent unless using a remote lift system), unplanned detonation, changing weather conditions, and effectiveness and application of cordons. The EOD Supervisors (qualified as Advanced Maritime EOD Operators) are responsible for mitigating risk as far as possible through effective communications and comprehensive briefings. Based on the outcome of this analysis, a decision will be made to proceed with either the preferred LO deflagration method, or if that is not possible, some

Figure 5: Placement and deflagration of a 1000-pound bomb using the Vulcan tool.

other means of disposal such as HO detonation. The munition must be intact to apply LO and HO disposal methods; neither should be applied to chemical weapons as they have their own unique disposal requirements. If the UXO is not intact it will be disposed of using a small charge which will not deflagrate the item but at the same time will not detonate as a HO event. In the event of having to neutralise a munition which is not intact, only charges with the minimum amount of explosive content to deliver the disposal outcome required should be used. For some time now the Polish Navy has been actively neutralising WWII ordnance using LO deflagration in support of some civil and commercial maritime programmes in the Baltic Sea. Most notably and recently LO deflagration was used to dispose of a 12,000-pound British Tall Boy air dropped bomb discovered in a port. Whilst the media coverage spoke of the weapon detonating, the majority of the yield actually deflagrated and only a small percentage of the bomb’s explosive fill transited MARCH 2021 | ISSUE 117

FEATURE Figure 6. Comparison of ‘high’ and ‘low’ disposal of 500-kilogram bombs in 25 metres water depth.

to detonation, with rupturing of the casing in the final instance. It was clear that had this weapon fully detonated in 10 metres water depth where it originally sat, it would have produced a plume of water over 700 metres high and a shock wave akin to that witnessed in Beirut port in August 2020. It would have caused significant collateral damage and risk to life. This operation, in being able to tackle a weapon of this magnitude, outlined the significant capability that these deflagration systems have over other solutions currently available on the commercial EOD market. It is commonly accepted that HO detonation of UXO causes significant harm to the environment and increases the risk of injury personnel and damage to high value assets. It is also equipment and time intensive, making it significantly more costly than a low order approach. Conservative estimates on the use of LO deflagration point to a 15-30% saving over the course of a full UXO clearance campaign.

ENVIRONMENTAL SAFEGUARDING

LO deflagration offers a number of highly significant benefits over HO detonation, in addition to commercial advantages: • Dramatically reduces physical and environmental damage to the UXO site, protecting marine ecosystems through a lack of cratering and liquefaction. • Minimises the noise impact by avoiding the full destructive detonation of the unexploded ordnance,

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protecting wildlife, particularly marine mammals such as the Harbour Porpoise. • Minimises the toxic and carcinogenic residues that remain in suspension in the water column after the detonation of both the bulk charge and ordnance. • Avoids the detonation of the ordnance, itself an uncontrolled and unpredictable activity which risks personnel and equipment. • Removes the requirement for bubble curtains and other costly mitigations, thereby reducing the overall costs and timetable of the UXO clearance effort. • Utilises advanced explosive technology to reduce charge Figure 7. 2020 Beirut harbour explosion.

size and therefore risk to the environment, property and people.

COMMONLY ASKED QUESTIONS Has LO deflagration been used on historic UXO and what was the success rate? LO deflagration has been used successfully and documented on a large number of UXO on land and at sea. The initial success rate for first 100 firings was 100% and even with the global increase in usage, the success rate remains above 98%. The slight reduction has been attributed to operator error rather than system failure. Can this method be used on all UXO items? LO deflagration requires the UXO to be intact as the explosive fill must burn to create sufficient pressure buildup to split open the casing. Any residual explosive remaining in the UXO after deflagration (rare occurrence) can be cleared with a second cleaning shot. The same requirement for an intact casing applies to HO detonation and as stated earlier, LO deflagration cannot be used against chemical munitions. What is the time frame for deflagration to occur? Typically deflagration appears to be instantaneous. However, with large bombs there can be a slight delay as the pressure builds up, but this delay will only be seconds. How do confirm if a LO deflagration has been successful or not? A successful deflagration will depend on a number of factors such as the extent to which the UXO has been broken open and the volume of explosive that has been deflagrated. Following an inspection of the deflagrated UXO, the EOD Supervisor can quickly determine if an incomplete combustion has occurred (which is very rare); the remaining fill can be then be removed with a second ‘clean-up’ shot. What is the preparation time for a LO deflagration? The delivery and LO deflagration system provided by Eodex can be prepared for deployment in under 10 minutes. Is there any risk when recovering to deck disposed UXO following LO deflagration? No. The explosives are not toxic and are safe to handle and without an initiation train, cannot function. All remaining explosives from a deflagration can be safely recov-

ered and stored on board a vessel for disposal ashore. It is not considered dangerous to leave small explosive remnants behind to weather out over a period of time. Can this method be employed in zero-visibility, using sensors instead? This system can be deployed using very high-resolution sonars and is not restricted by poor underwater visibility.

FUTURE DEVELOPMENTS

As of February 2021, no commercial use of LO deflagration has been undertaken on a large scale, such as on an offshore wind farm or subsea interconnector cable project. Alongside the UK government and renewables sector, several overseas government bodies have also expressed interest in the use of low order techniques and an increasing number of marine licences and project requirements now specify that LO deflagration is either the preferred or even the only disposal technique to be used. Eodex continues to lead the effort to replace environmentally damaging HO detonation with more environmentally friendly and cost-effective LO deflagration. Further sea trials are ongoing to allow greater visibility of the system and its advantages, but in the meantime the concept is proven and can be provided globally. Put simply, when we have the technology to reduce harm, why would we not use it? STF ANDREW WOOLLVEN is a former Naval Warfare Commander and Mine Clearance Diving Specialist and throughout his career has been involved in extensive EOD and underwater clearance operations all over the globe. On leaving the forces, Andrew worked as an offshore EOD Superintendent before taking up the position as Managing Director at Eodex UK Ltd, a company specifically formed to bring the very best maritime explosive ordnance disposal and underwater explosive cutting processes for use within the commercial subsea sector with safety, environmental safeguarding and cost efficiency as central pillars of its delivery. A masters graduate of Kings College and a Member of the Institute of Explosive Engineers. Associate Director at Eodex Limited, HARDEEP SIDHU has 39 years of international experience in offshore telecommunications, renewable energy, oil & gas, mining, dredging, environmental and geophysical surveys. Focused since 2014 on the design, specification, business development and management of UXO clearances services for offshore cables and facilities installations. He has promoted innovation with respect to survey, identification and disposal techniques in order to safeguard the marine environment from the disruptive effects of conventional methods. Holds postgraduate degrees in marine geosciences and technology & innovation management.

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FEATURE

FIBER TECHNOLOGY FOR SUBSEA NETWORKS Today vs. Tomorrow

BY SERGEI MAKOVEJS AND JOHN HEDGPETH TODAY’S SUBMARINE FIBER OUTLOOK:

he subsea fiber and cable market continues to show strong demand, and multiple tens of new subsea projects are expected over the next few years, with a substantial portion of them representing long-haul routes. For these routes, space division multiplexing (SDM) with ≥12 fiber pairs per cable is rapidly becoming a de-facto technology to achieve lower cost/bit compared to traditional, non-linear systems. The main premise of SDM design has not changed much since its inception and it continues to use lower fiber launch powers compared to traditional “non-linear optimum” to achieve linear or semi-linear transmission regime (Fig. 1). In this figure, generalized signal-to-noise ratio (GSNR) is an industry metric frequently used to determine the performance of the wet plant for open subsea cables. In the presence of inherent electrical power constraints, the reduction of launch power leads to lower capacity per fiber. However, this is offset by the ability to design cables with higher fiber counts, ultimately achieving higher overall cable capacity. As a rule of thumb, cost-optimized SDM design favors semi-linear transmission regime, whereas power-optimized SDM design pushes the fiber launch power into a more linear regime. These design features have important implications for submarine fiber itself. To meet the needs of today’s SDM designs, two optical fiber characteristics are often in the center of discussion: attenuation and effective area. Ultra-low attenuation continues to play a key role, and every 0.001 dB/ km improvement is essential in the pursuit to further reduce overall cost per bit. Conversely, for SDM designs, effective

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area (Aeff ) moves lower in the decision-making process for fiber choice. While non-SDM systems favored both ultra-low loss and ultra-large Aeff (e.g. 150 µm2) fibers, SDM systems typically gravitate towards 80 – 115 µm2 Aeff. This is because in SDM systems the value of fiber Aeff is somewhat diminished, while value of bend performance is significantly augmented. The latter is particularly important given that bend performance tends to deteriorate with Aeff. In addition, a transition from 80 to 115 µm2 Aeff provides a meaningful decrease in attenuation (approximately 0.01 dB/km), while beyond ~115 µm2 Aeff there is little or no further improvement in attenuation. For all those reasons, 80 – 115 µm2 seems to be a sweet spot for submarine SDM systems, with the specific choice of 80 vs. 115 µm2 Aeff being frequently driven by several inter-dependent, techno-economic factors.

NEAR FUTURE VIEW OF SUBMARINE FIBER:

As the industry continues to progress on the SDM trajectory, a drive towards fiber count densification in a cable to achieve further reduction in system cost per bit will continue. An expectation for the future is that both 80 and 115 µm2 Aeff fibers will continue to play an important role, but now in thinner 200 µm coating variants (Fig. 2) as well as the regular fiber outer diameter. The fiber choice will likely be decided on a project-by-project basis, using similar techno-economic arguments as the ones used today. As further advancements are made in SDM design, attenuation will remain the key attribute, and every 0.001 dB/km of attenuation reduction will continue to matter. The most likely next step in near future cable design

will be a move to higher fiber counts, to achieve further improvements in SDM cost per bit and power efficiency. To minimize cable redesign and cable manufacturing cost, submarine fibers with smaller form factors, such as those with 200 µm coating diameters, will enable up to 50% higher fiber density within an existing cable design. In the example of 200 µm, this form factor decrease is achieved via reduction in both primary and secondary coating, while maintaining cladding diameter at 125 µm to ensure that the existing fiber processing procedures can be used (Fig. 3). Key consideration on migrating to smaller diameter fibers will be to ensure adequate cabled product performance and mechanical reliability. Given that 200 µm has been successfully used in terrestrial cables over the past several years, applying similar best cabling practices to submarine cables should help minimize the learning curve and enable smooth adoption by the submarine industry. With higher fiber density, there will also need to be a focus on fiber identification. Several options are available today, mainly involving combinations of solid colors and uniquely spaced ring-marks. Fiber identification will be essential to enable correct splicing during installation and future maintenance activities. Important additional requirements for any fiber identification technique is to ensure adequate discernibility of individual fibers, longevity of fiber identification when it is applied to the fiber, and to ensure that the fiber itself maintains its ultra-low attenuation after an identification has been applied.

LONGER TERM SUBMARINE FIBER OUTLOOK:

What could next-generation SDM look like? This one is difficult to answer with certainty. On the one hand, the industry may decide to stay with the maximum of 24 fiber pairs in the cable, in which case future innovations will rely on continuous attenuation advancements of optical fiber to achieve the lower cost per bit cabling objective. An argument for staying with the maximum of 24 fiber pairs could be related to the desire to improve subsea data traffic resilience – bigger cables will naturally make subsea networks less resilient compared to more frequent and geographically diverse cables with fewer fiber pairs. Another idea for increasing cabling capacity while reducing cost per bit is using C+L band technology, which will allow for an increase in cable capacity by utilizing fewer fiber pairs compared to C band only systems. Challenges with

Fig. 1 Different subsea system designs: SDM (Linear or Semi-Linear) vs. non-SDM (non-Linear).

C+L band vs. C band only systems arise from higher fiber attenuation and bend losses in L band compared to C band, and the need for additional splitters and combiners. Perhaps an ultimate future solution will be based on very high fiber count cables (enabled by 200 µm fiber) in combination with C+L band technology and ultra-low attenuation.

MULTI-CORE FIBER:

If the transition to more fibers (> 24 fiber pairs) in a cable continues, there is an argument for using multi-core fibers (MCF) to potentially overcome cable design limitations. For example, designing a 48 fiber pair single-core fiber cable for repeatered transmission could prove to be a difficult task, while 4-core MCF could leverage the existing 16 fiber pair cable design to achieve comparable cable capacity. It must be noted that MCF technology does not come without challenges. Additional loss from fanout devices and likely higher typical attenuation compared to single core fibers, will reduce an achievable cable capacity (i.e. 4-core MCF will have <4X capacity increase vs. 4 single-core fibers). It is also likely that the cost/per core of n-core MCF will be higher than cost of “n” individual fibers. With current cost and loss expectations MCF seems to be unable to achieve lower cost per bit compared to single-core counterparts, although this should be periodically re-evaluated as manufacturing techniques continue to evolve. There are additional, more practical challenges, such as test and measurement automation and need for bespoke core identification solution, which represent additional

Fig. 2 Fiber evolution (past – today – future)

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FEATURE

Fig. 3 Visual comparison of 250 vs. 200 µm fibers

(albeit, not fundamental) barriers of adoption for MCF technology.

FEW-MODE FIBER

Other novel fiber option that is occasionally being discussed for subsea transmission is few mode fiber (FMF). While FMF is more manufacturing-friendly compared to MCF and can potentially provide comparable spatial path density, it is also expected to have higher attenuation compared to single-mode fiber (and even likely to exceed MCF attenuation). The biggest challenge for FMF adoption is the complexity associated with need for mode coupling compensation in the receiver - for transoceanic transmission this will likely remain a significant challenge.

SMALLER FIBER

The final option involves single mode, single core fibers with lower than 200 µm coating diameter. This can be achieved via reduction in cladding diameter (<125 µm), while keeping coating thickness the same. Alternatively, one could preserve 125 µm cladding diameter for backwards compatibility with existing fiber handling procedures, but to instead reduce coating thickness to below 200 µm. Both pathways can achieve higher packing density compared to fibers used today but will create some additional challenges related to bend performance, hence suitability of these fibers for subsea transmission will be driven by cable design considerations.

CLOSING STATEMENT:

All indicators suggest ongoing growth in the subsea market. Several reports indicate >30% CAGR in global bandwidth, and conference or seminar presentations by subsea global subject matter experts suggest that such bandwidth growth is unlikely to abate. Newly designed cables are migrating to SDM designs, in which cost per bit and power efficiency are essential design metrics. As such, fiber attenuation becomes the single most important optical fiber attribute, and as higher fiber density SDM systems gain prominence, smaller diameter (200 µm) fiber

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emerges as a frontrunner solution to allow for higher fiber density without a significant cable redesign. Further into the future, more study into revolutionary fiber options (MCF, FMF, RCF) is needed to determine whether either of those options are going to succeed for subsea transmission, given the desire for next-generation SDM systems to be more cost-effective than the current ones. Ability to manufacture ultra-low loss MCF, FMF, or RCF fibers with consistent quality and in large volume is a necessary condition for those fibers to compete with well-established, ultra-low attenuation single core fibers. STF JOHN HEDGPETH is a Product Line Manager at Corning, responsible for submarine and high data rate optical fiber products. John has held several positions during his nine year tenure at Corning, including manufacturing support and quality management. In addition to his work at Corning, John’s career has allowed for experience in process engineering, R&D and product management, all gained through working in the electronic component industry. John holds a BS in Chemical Engineering from NC State University. SERGEI MAKOVEJS is a Market and Technology Development Manager at Corning, where he has global strategic responsibility for marketing, market development and product development direction of long-haul and submarine fiber segments. Sergei received a Ph.D. in electronic and electrical engineering from UCL, U.K. and an Executive MBA from Warwick Business School, U.K. Sergei has authored and co-authored more than 50 peer-reviewed papers in the field of optical communications. He is a regular presenter at international conferences and seminars on emerging technology trends that shape long-haul terrestrial and submarine networks.

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play for offshore wind. Climate Change

While the telecom industry has been operating for quite some time and has made significant advances in our knowledge of benthic marine environments, climate change is one issue that we will have to face in conjunction with all offshore maritime industries and the wider world. The push for projects concerning environmental monitoring and communications is spreading throughout the industry, with a current focus on issues relating to marine megafauna and fisheries targets. Initiatives such as SMART cables and similar monitoring systems in offshore wind will go a long way towards narrowing existing knowledge gaps and ensuring that we have lengthy and reliable data records as our seas undergo this period of immense change. As mentioned previously, interdisciplinary initiatives such as ROSA will be integral in encouraging data sharing and data tracking as some common fisheries and conservation target species exhibit spatial and temporal distribution shifts. By working together, industry and local stakeholders can broaden our collective knowledge of how the oceans around us will be impacted by climate change related phenomena. As such, we can hope to mitigate issues to the best of our abilities and focus on nurturing sustainable growth of both telecom and offshore wind industries, keeping the world connected and providing reliable sources of clean, renewable wind energy. Similarly, collective knowledge on natural system faults, both for subsea cables and offshore wind infrastructure, will contribute to our understanding of how best to shift future engineering and operation innovations to cope with an increase in strength and frequency of inclement weather events and other climatic factors. Summary

those of public perceptions, will help to pave the way for community buy-in and long term success of these installations. In the past century and a half, humans have come to understand a significant amount about our oceans and how they function. Through the course of hundreds of subsea cable installations, the telecom industry has been at the forefront of uncovering benthic knowledge. Our understanding of seafloor hydrology, shifting sediments, ecological interactions, and even earthquakes and tsunamis has greatly increased. By taking what we have learned and applying it to the burgeoning offshore wind industry, we can best position ourselves to reap the rewards of an extensive renewables network while mitigating social, environmental, and ecological impacts. We have extensive local fisheries and communities networks, professional guard vessels and crews, broad knowledge of the marine environmental and applicable requirements and legislation, and, above all, we have a vision for long-term, sustainable success in harnessing our renewable natural resources for clean energy. To our partners in the offshore wind industry— we are ready and willing to help you reach your goals. Emma Martin is the Marine Systems Associate at Seagard. She has her BA in Biology from Boston University, USA and her MSc in Marine Systems and Policies from the University of Edinburgh, Scotland. She has performed marine field work around the world and looks forward to continuing to support maritime infrastructure developments.

Throughout both industries, a common theme is the importance of early and continued stakeholder engagement. “We stand by the idea that stakeholder engagement and outreach with other maritime users and operators is incredibly important,” Ryan Wopschall, ICPC GM states, “Raising awareness of subsea cables within the offshore renewable energy sector and encouraging developers and stakeholders to contact us in regard to new and ongoing projects will further facilitate safe and efficient use of marine resources and long-term protection of seabed infrastructure.” All marine users must be considered throughout project development, and these considerations, alongside

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MARCH 2021 | ISSUE 117

FEATURE

DUE DILIGENCE Keeping the Project on Track BY KRISTIAN NIELSEN

ue Diligence - The investigation or exercise of care that a reasonable business or person is normally expected to take before entering into an agreement or contract with another party or an act with a certain standard of care. (Wikipedia) Due diligence is usually required by third parties that are interested in either financing a project or investing in a project, i.e., the Client. Due diligence of a Cable System is typically accomplished by a person or team of people, often called “Technical Advisors”. The primary role of the Technical Advisors should be to review and analyze the business case for the project. This can also include monitoring the implementation of a Cable System and associated System Supplier activities in compliance with the requirements of the project’s Scope of Work. The following article describes the typical Technical

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Advisor’s approach to Due Diligence Reporting and Implementation Monitoring of a proposed submarine cable system.

CLIENT DUE DILIGENCE NEEDS

Technical Advisory support should place specific emphasis on issues surrounding the technical suitability of the

network, construction of the system, the maintenance of the infrastructure, and the assessment of potential areas of risk. The Technical Advisor should assess the potential impact of hazards on the long-term maintenance of the cable system. These potential risks to the cable’s operations should influence recommendations for the design, construction and maintenance activities associated with the project. The Technical Advisor should perform duties that meet these objectives. Due diligence Clients typically require two distinct work streams of Due Diligence support for a Cable System, detailed as follows: • Technical Due Diligence and Report - Review and evaluation of the available technical details of the Project as proposed by the System Developer, and the adequacy of the designs and specifications, as well as other contractual and technical considerations. • Construction Monitoring - Review and reporting of the execution and implementation of the construction works, including progress reports on design, procurement, construction, implementation, and commissioning. The Technical Advisor should apply formal project management principles and rigor to the advisory effort. They should be expected to bring their experience to the advisory effort and utilize the lessons learned from previous projects, subject always to previous client confidentiality constraints.

TECHNICAL DUE DILIGENCE REPORTING

The Technical Advisor’s support incorporates the associated activities necessary to evaluate the Cable System and provide the Client with the confidence to move ahead with the project, including effectively managing both technical and commercial risk, and successfully operating the system to meet or exceed revenue targets. The Technical Advisor is guided by the Client’s Scope of Work. To provide a comprehensive analysis, the Technical Advisor will require, where available, the following documentation and information be made available in a timely manner: 1. Feasibility Study and/or Business Case for Cable System (including CapEx and OpEx budgets) 2. Desktop Study and Route Survey Report for the system 3. Environmental Impact Assessments and details of permitting activities for the system 4. Intent to Tender (or Request for Proposal) for System Supply and copy(ies) of executed Supply Contract(s) for the system 5. Staffing Plan by Project Phase and CV’s of Principal Staff Members

6. Capacity Purchase Agreements 7. Operations and Maintenance Plan, Disaster Recovery Plan, and Intent to Tender for Marine Maintenance Services 8. Details of the cable landing stations and other infrastructure. The Technical Advisor needs to monitor Project progress usually by means of discussions, meetings, and project reports. They should for team leadership, status monitoring and reporting, managing schedule, managing change, attending review meetings, and managing the delivery and approval of reports to the Client. The Technical Advisor understands that the Client typically requires a thorough and detailed review of the Cable System design, technical specifications, construction contract, implementation schedule, internal and external risks (including social and environmental issues), the ability of the system to support the planned Capacity Purchase agreements, the suitability of the Operations and Maintenance plan to support the system, and any technical input and assumptions to the Financial model. The Technical Advisor should review the topics listed in the Client’s Scope of Work and confirm that all topics are addressed. The Technical Advisor typically accomplishes some or all of the following: • Clarify System Technical Attributes - Technical Advisor should conduct research that should clarify the system’s technical attributes. This should include confirming the optical parameters, number of fiber pairs in the system, the initial and ultimate system capacity, system electrical power requirements, as well as the equipment and/or infrastructure that Client will provide. • Gather Report Data - Technical Advisor should work with Client to gather all the necessary data to produce the Technical Due Diligence Report. The effort should collect and analyze data from the Cable System deriving from a variety of public, commercial, and scientific sources to identify project risks, which should enable Client to evaluate, prioritize and/or eliminate risk related to the system. • Review Background Recent Cable Information - Technical Advisor should gather and assemble applicable industry and commercial data of other submarine cable systems to providing an overview of recent submarine cable deployments. • Review Backgrounds of Cable System Development Team - Technical Advisor should consider the backgrounds of the Cable System Management team, including their past projects and positions. Background and MARCH 2021 | ISSUE 117

FEATURE perspective on the Cable System Development Team capabilities should be provided. • Review System Maintenance Issues Addressed in Other Cable Projects - Technical Advisor should consider typical problems experienced by submarine cable projects during construction and operation, as well as ways these risks were mitigated. • Analyze System Design - Technical Advisor should gather and assemble applicable data of the Cable System to provide a technical analysis of the system design. • Evaluate Technology - Technical Advisor should gather and assemble applicable data of the Cable System to provide a technical evaluation of the technology to be used. • Review Supply Contract - Technical Advisor should gather and assemble applicable commercial and technical data of the Cable System to provide a review of the System Suppler contract. • Review Geotechnical - Technical Advisor should gather and assemble applicable geotechnical data of the Cable System (Desktop Study, Cable Route Engineering, Marine Survey, etc.) to provide a review of the system routing and marine installation. • Review Operations and Maintenance - Technical Advisor should gather and assemble applicable data of the Cable System to provide a technical review of the proposed system’s Operations and Maintenance. • Review Financial Model - Technical Advisor should gather and assemble applicable data of the Cable System to provide a review of the financial model. • Review Capacity Purchase Agreements - Technical Advisor should gather and assemble applicable data of the Cable System to provide a review of the various capacity purchase agreements. • Review Environmental and Social Issues - Technical Advisor should gather and assemble applicable data of the Cable System to provide a review of environmental and social issues and risks. • Review Permitting Process - Technical Advisor should gather and assemble applicable data of the Cable System to provide a review of the permitting process. • Review Project Plan of Work - Technical Advisor should review the Plan of Work (POW ) for the manufacture, survey, installation, and commissioning of the Cable

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System to provide a “sanity check” on the components of the project to successfully implement the project. This review should identify the critical path of the project. • Review Project Schedule Technical Advisor should review the Project Schedule for the system to provide a “sanity check” on the likelihood and reasonableness of the timeline. • Analyze Project Risk and Check Consistency - Technical Advisor should accomplish a thorough Risk Analysis of the system. The Technical Advisor should consolidate Cable System data into a Due Diligence Report; the primary objectives of which should be to evaluate the suitability of the planned solution, identify any risks and mitigation, compare the solution to accepted industry practices, and ensure the solution will be consistent with all other aspects of the project. These objectives should be accomplished through detailed analysis, comparison to other projects (although for reasons of confidentiality, specific projects should not be named), and evaluation based on Technical Advisor’s experience. Upon delivery of the Technical Due Diligence Report, the outcome should be reviewed with the Client. Comments and concerns addressed beforehand and during the Project Meetings with the Client and Stakeholders should be addressed in the report.

CONSTRUCTION MONITORING

During the Project construction period, the Technical Advisor should review, on a regular basis, the execution and implementation of the installation. The Technical Advisor should report on the construction progress of the Project based on Contract Coordination Meetings (CCMs) and by reviewing the Purchaser’s and System Supplier’s progress reports in the areas of final design, procurement, construction, and commissioning. They should identify any technical problems with the construction works. Throughout the process, the Technical Advisor should provide necessary and thorough project status monitoring including regular project meetings (conference calls) at intervals determined by the Client. These meetings are typically held telephonically in conjunction with Contract

Coordination Meetings planned with the System Supplier. During system implementation monitoring, the Technical Advisory role includes: • Regular project review meetings with the Purchaser and Supplier including CCMs • Monitoring all Purchaser provided elements of the system, e.g., the Cable Landing Stations (CLSs), Beach Manholes, and Outside Plant • Monitoring of any Contract Variations • Monitoring of the permitting process • Monitoring and review System Supplier provided documentation • Monitor the Marine Survey results and Cable Route Engineering design • Monitoring the Factory Acceptance Testing reporting • Monitoring the Marine Survey and the marine installation reporting • Monitoring of Local Station Tests and Segment Tests reporting • Monitoring of System Commissioning and Acceptance reporting • Monitoring of any integration tests reporting • Monitoring of end-to-end commissioning, including terrestrial backhaul reporting as needed • Monitoring contractual notices to System Supplier (e.g., Deficiency Reports, Acceptance Certificates, Schedule Delays, etc.) • Monitoring of end-user Training reporting • Monitoring of Spares delivery, both wet and dry plant • Monitoring of all System Supplier invoices • Monitoring of expenditures vs. budget • Monitoring of actual vs. planned Plan of Work • Monitoring of as-builts, including notification to NOAA and the British Admiralty • Review of Operations, Administration, Maintenance & Provisioning (OAM&P) systems and procedures. While the main System Supplier should be the primary focus of many activities, additional suppliers will be involved in delivering the completed network. The success of Cable System depends on the integration and coordination of these activities with the work of the System Supplier. The Technical Advisor should compile the various implementation monitoring activities for the project: • Project Plan of Work - Technical Advisor should compile a high-level Project POW to monitor Purchaser provided and System Supplier elements to meet the required delivery timeframes.

• Work Breakdown Structure and Critical Path Analysis – A POW should be supported by a Work Breakdown Structure (WBS), which should be imported from Purchaser’s and System Supplier’s schedules into an overall schedule. A Critical Path Analysis to the overall POW should then be accomplished, identifying the major risks to the project. To monitor system implementation, the Technical Advisor will need to review the following activities: • Factory Acceptance Testing • Permitting Oversight • Terrestrial Civil Works • Marine Installation • Final System Testing and Acceptance • Documentation • Training • Sparing • Operations and Maintenance • Miscellaneous Cable System Support Activities • As-Built Documentation Status.

CONCLUSION

The role that Due Diligence plays will become more relevant as the industry sees yet another boom of capacity usage, this time driven by the COVID-19 pandemic and the profound demand for remote working environments. The world has adapted and is in the early stages of recovery from the pandemic, however early research suggests that most remote positions will remain remote, with companies citing the lower overhead and better tools for team accessibility, such as the host of video conferencing services available today. The effect of COVID-19 will be far reaching, but for the submarine cable industry, in the mean time it will ramp up demand for new systems and route redundancy yet again. While no two projects are identical, managing a well standardized approach to the reporting, advising and communications of project activities provides your client with a uniform product, fit for use well into the life of the system. STF KRISTIAN NIELSEN is the Quality & Fulfilment Director at WFN Strategies. He is a Project Management Professional (PMP™) and ISO 9001:2015 and ISO 27001:2013 auditor and possesses more than 13 years’ experience and knowledge in submarine cable systems, including Polar and offshore Oil & Gas submarine fiber systems. As Quality & Fulfilment Director, he reviews subcontracts and monitors the clients and vendors, and is the final check on all delivered WFN products. He is responsible for contract administration, as well as supports financial monitoring and in-field logistics. He has worked in-field, at-desk and everywhere in between.

MARCH 2021 | ISSUE 117

FEATURE

UPDATE ON THE CURRENT STATE OF LEASE ACCOUNTING FOR FINANCIAL REPORTING PURPOSES BY WILLIAM REDPATH

he portion of United States financial accounting standards that involves lease accounting has recently undergone major changes. Right-of-use leases, including IRUs (Indefeasible Rights of Use), are important assets to telecommunications companies, including those involved with submarine cables as lessors or lessees. This post is addressed to non-accountants (although accountants are welcome consumers of this article), so I will address lease accounting standards and these changes at a rather high level. Financial accounting rules in the United States are set by the Financial Accounting Standards Board (FASB), based in Norwalk, CT, which is empowered by the Securities and Exchange Commission (SEC) to set accounting standards for all companies that file their financial results with the SEC. The FASB does this through its issuance of Generally Accepted Accounting Principles (GAAP), which also usually must be adhered to by private companies in their audited, reviewed or compiled financial statements. As an aside, accounting standards for most other nations are issued by the International Accounting Standards Board (IASB). Although there has long been discussion of a “convergence” of GAAP and the IASB’s International

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Financial Reporting Standards (IFRS), that has not yet happened, and that is not in the foreseeable future. I also want to note that this post addresses only financial accounting, not tax accounting, for leases. Tax accounting for leases is not within the purview of the Financial Accounting Standards Board (FASB), but is a matter of tax law in the United States and was not affected by the issuance of ASB 842. Before I get to the lease accounting changes brought about by ASC 842, a predicate issue must be addressed: What qualifies as a lease? The rules by which an agreement qualifies as a lease have been tightened in ASC 842. A lease agreement involves at least two parties, a lessor and a lessee, and an asset that is to be leased. A lease involves Property, Plant or Equipment (PPE). Assets to which ASC 842 does not apply include intangible assets, natural assets (such as timber or coal), inventory, assets under construction, and financial assets. The lessor is the party that agrees to provide the lessee with a right to use an asset for a specified period of time in return for consideration. Leases can be structured in many different ways, and that leads to the accounting complexity with leases. The structure of a lease can include allocation of income tax benefits between lessor and lessee. Leases can be used to transfer

ownership or control of the leased asset. From an accounting perspective, what truly matters with leases is the substance, not the form, of a lease transaction. If the essence of a lease transaction is to effectively transfer ownership or control of an asset to the lessee, then the substance of the transaction is that of a sale, and it is recognized as such for accounting purposes even though the transaction is, in form, structured as a lease. Specific PPE must be identified in the lease. An example might be three strands of a dark fiber optic cable. The three strands would have to be specifically identified, and the lessor would have to have no practical ability to, at any time, substitute some other strands for the identified strands and would not benefit from doing so. If a lessor makes available to a lessee any three available strands, at the lessor’s choosing, at any time, the agreement does not qualify as a lease. It would then be a service contract, which has different accounting rules than leases. Also, the lessee must have controlled the use of the asset during the term of the lease, including how and for what purpose the leased asset should be used and the ability to receive substantially all of the economic benefits of the leased asset. There may be certain conditions (e.g., hours during each day that the leased asset can be used by the lessee) attached to the lease that do not affect whether the transaction is seen as a lease. The financial accounting rules for leases for both lessees and lessors has been changed by the issuance of FASB ASC 842 in 2016. ASC stands for “Accounting Standards Codification,” which came into existence in 2009 and replaced all prior financial accounting standards. The effective dates of ASC 842 will be addressed later in this article. The lease accounting rules changed much more for lessees than for lessors. Under the old lease accounting rules, from the perspective of lessees, a lease was either and operating lease or a capital lease. If a lease met any one of four criteria, it was a capital lease, otherwise it was an operating lease. Those four criteria were: 1. The lease transferred ownership to the lessee by the end of the lease term. 2. The lease contained a bargain purchase option. 3. The lease term is equal to 75% or more of the estimated economic life of the leased property, and the beginning of the lease term does not fall within the last 25% of the total economic life of the leased property. 4. The present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value to the lessor less any investment tax credit retained by the lessor. This requirement cannot be used if the lease’s inception is in the last 25% of the useful economic life of the leased asset. (I won’t address the interest rate for discounting here.)

If a lease was found to be an operating lease, no asset or liability was posted to the lessee’s balance sheet. Lease expense was recognized as the leased asset was used by the lessee. A liability would appear on the lessee’s balance sheet only if use of the lease asset exceeded payment for it, but such liability amount would usually be very small or non-existent. If a lease was found to be a capital lease, an asset and liability were posted on the lessee’s balance sheet. The liability amount was the present value of the future lease payments on that lease. The asset amount was usually the same as the liability amount. But these lease accounting rules had a problem. It allowed lessees and lessors to manipulate lease terms to qualify leases as operating leases, so that these leases could be kept off the lessee’s balance sheet. It has been asserted that ASC 842 came to be because of Enron and other companies that entered leases with the terms set so that the leases would qualify as operating leases and not have to be recognized on their balance sheets. (If so, the gestation period for ASC 842 was unbelievable long!). Enron ostensibly had a large number of leases that its financial executives classified as operating leases, thereby keeping the leases— and the financial obligations associated with those leases--off its balance sheets. When the end came for Enron in 2001, the existence of these leases and their long-term financial commitments were a surprise to analysts and investors. Under ASC 842, for lessees, the term “Capital Lease” that was employed under ASC 840 has been renamed “Finance Lease.” For lessees, a given lease will be classified as either an operating lease or a finance lease (both will be recognized on the lessee’s balance sheet). Also, there have been subtle changes to three of the four criteria, one of which must be met for a lease to now be classified a “Finance Lease.” The requirement that there be a ‘Bargain Purchase Option” has been changed to an option that is reasonably certain to be exercised by the lessee. The “bright line” numbers of 75% of remaining useful and present value of lease payments of 90% of fair market value of the leased asset have been removed, but it has been suggested that these respective percentages would be fair to be used by lessees. In evaluating these, remember that renewal terms should be included if likely the lease will be renewed. A fifth criterion has been added in ASC 842: “The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term.” Under ASC 842, it is presumed that nearly all leases will be included on the balance sheets of lessees. An exception is any lease with a term of one year or less (including likely renewal terms). MARCH 2021 | ISSUE 117

FEATURE LEASE ACCOUNTING FOR LESSEES FOR OPERATING LEASES:

The lease asset, called a “Right of Use Asset” goes on the balance sheet, as does a liability (sometimes called a lease obligation). The number posted for the liability is the present value of the future lease payments. The interest rate used for discounting the future cash flows, under the rules, can be—and probably usually is—the lessee’s incremental borrowing rate. That is, if the lessee were to purchase the asset only using borrowed funds, the interest rate the lessee would have to pay to effect that. The Right of Use asset’s value is the Lease Liability + any Lease Prepayments + any Initial Direct Costs – any Lease Incentives Received. The Right of Use asset carrying value may be different from the Lease Liability amount. Lease expense will usually be recognized each year by the total minimum cash outlay for the lease divided by the number of years of the lease (to smooth out expense recognition over the term of the lease). If there are any extra, variable lease payments, they are usually expensed in the year they are incurred. The Lease Liability will be reduced each year by the difference between the present value of the remaining lease payments at the beginning of the year minus the present value of the remaining lease payments at the end of the year. The Right of Use asset will be reduced by the same amount as the Lease Liability reduction each year, so that the Right of Use asset and the associated Lease Liability will both be zero at the end of the lease. With operating leases reported on lessees’ balance sheets, there can be a great increase in the total value of assets and liabilities. Under the older ASC 840 lease reporting standards, the liabilities on the balance sheet for capital leases were reported as debt on the balance sheet. The problem with this was that it could adversely affect companies’ debt covenants with their lenders. Under ASC 842, the lease liability is a non-debt longterm liability. This change undoubtedly makes ASC 842 more palatable to lessees than would be the case without this change.

However, during the lease term, the expense recognized due to use of the Right to Use asset goes to Amortization (not Lease) expense. Over the term of the lease, the lease liability (which was the present value of the future lease payments and equaled the amount of the Lease Right to Use asset at the beginning of the lease) also must be reduced as lease payments are made. Making those lease payments is like making mortgage payments on your home, and it is probably easiest to think of the accounting for this in those terms. When each lease payment is made, there is a reduction of cash on the balance sheet for that amount. Part of each payment is Interest Expense and part Liability reduction, with interest expense going down in each period over time, and liability reduction increasing with each payment. At the end of the lease payments, the remaining liability will be zero.

The Right of Use asset will be reduced by the same amount as the Lease Liability reduction each year, so that the Right of Use asset and the associated Lease Liability will both be zero at the end of the lease.

LEASE ACCOUNTING FOR LESSEES FOR FINANCE LEASES:

Because ownership of a leased asset is, in substance, being transferred to the lessee in a Finance Lease, the accounting is a little more complicated. The Right of Use Asset and the Lease Liability are initially booked in the same manner as with an Operating Lease.

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LEASE ACCOUNTING FOR LESSORS:

Lease accounting for lessors didn’t change that much with the issuance of ASC 842, so I won’t address lessor accounting pre-ASC 842. The number of lease categories for lessors shrank from four to three, with Leveraged Leases being the dropped category. That left Sales-type Leases, Direct Financing Leases and Operating Leases as the three options for lessors. From a lessor’s perspective, each lease will qualify for one (and only one) of those three options. The lessor’s category selection rules are as follows: At the commencement of the lease, if none of the five criteria for a lessee to classify a lease as a finance lease are met, then the lessor will classify the lease as an Operating Lease, unless ALL of the following criteria are met: 1. The present value of the sum of the lease payments and any residual value guaranteed by the lessee above and beyond the lease payments or by any other third party unrelated to the lessee equals or exceeds substantially all of the fair value of the underlying asset, and 2. It is probably that the lessor will collect the lease payments plus any amount necessary to satisfy a residual value guarantee, and 3. The lessor obtains a residual value guarantee from an unrelated third party (not the lessee). If this unrelated third party guarantee does not exist, the lease must be accounted for as either a Sales-type Lease or an Operating Lease.

If all three criteria above are met, the lessor shall account for the lease as a Direct Financing Lease. If any of lessees’ five criteria for a finance lease are met, the lessor will account for the lease as a Sales-type Lease. With a Sales-type Lease, the economic substance of the lease transaction is a sale of the asset from the Lessor to the Lessee. If collectability from the lessee is probable, the leased asset is “derecognized” from the balance sheet of the lessor, and a new asset “Net Investment in the Lease” takes its place. Any projected profit or loss is fully recognized at the commencement of the lease, under the theory that the asset has been constructively sold to the lessee. If collectability from the lessee is not probable (and I am not sure why a lessor would enter such a lease), the lessor does not “derecognize” the leased asset. Such asset remains as asset on the lessor’s balance sheet and cash received from the lessee is booked as an asset, with a “deposit liability” on the right side of the balance sheet. The deposit liability will be recognized as revenue if and when future collectability is deemed to be probable, at the end of the lease term or when the lessor takes back the asset from the lessee. If the lessor is to the treat the lease as a Direct Financing Lease, and there is no collectability issue with the lessee, the lessor should also “derecognize” (remove) the leased asset from its assets and put in its place a “Net Investment in the Lease” asset. If there is a selling loss, it should immediately be recognized by the lessor. Any selling profit should be deferred and included in the initial measurement of the Net Investment in the Lease. For the accounting going forward on the Net Investment in the Lease, I will return to the mortgage analogy. When you get a mortgage, you know the amount of the loan, the interest rate, and the frequency of payments (usually monthly). From that, you calculate the amount of the monthly payments. With the Net Investment in the Lease, you know the book value of the asset and the amount and frequency of payments. Knowing that, you can calculate the interest rate that would reduce the Net Investment in the Lease asset to the residual value of the underlying asset at the end of the lease term. That is, for each period: Beginning Net Investment in the Lease + Accrued Interest Income (which will be included on the lessor’s income

statement) – Total Period Lease Payment for that period = Ending Net Investment in the Lease (which will be a lower value than the Beginning Value). When this repeated for all periods in the lease term, at the end of the lease term, the Net Investment in the Lease will be equal to the residual value of the underlying asset. If the lessor is to treat the lease an Operating Lease, it should continue with the leased asset on its balance sheet and not recognize a Net Investment in a Lease asset. Revenue from lease payments should be recognized over the lease term on a rational, accrual accounting basis. Public companies needed to adopt ASC 842 for both annual and interim reporting for all periods starting after December 15, 2019, while private companies need to adopt ASC 842 for annual reporting for fiscal years starting after December 15, 2021, and for interim reporting for periods starting after December 15, 2022. There are a lot of technical details on lease accounting that cannot be addressed in this article, and that many users of financial statements don’t necessarily need to know to adequately grasp the information that such financial statements are trying to impart. But, now that lessees must recognize nearly all leases on their balance sheets, users of their financial statements should understand the most important concepts of lease accounting. If you want to dig deeper into lease accounting (and, believe me, there is a lot to be dug into!), one can easily find treatises on this topic from major accounting firms that are available for free online. STF

When this repeated for all periods in the lease term, at the end of the lease term, the Net Investment in the Lease will be equal to the residual value of the underlying asset.

WILLIAM “BILL” REDPATH is a Managing Director at Summit Ridge Group. He is a skilled appraiser with over three decades of experience valuing companies and assets in the broadcast, media, and telecom industries. He heads the Chicago office of Summit Ridge Group. Before joining Summit Ridge Group, Bill worked for nearly 35 years at BIA Advisory Services, LLC where he completed hundreds of fair market valuations, purchase price allocations for financial reporting and tax reporting purposes, and nearly 100 litigation support projects. Bill previously was a Senior Financial Analyst at NBC and an Internal Auditor at ABC (both in New York), Assistant Financial Manager at WISH-TV, Indianapolis, and a Staff Auditor at Arthur Andersen & Co. in Cincinnati. Bill is a member of the American Society of Appraisers, the CFA Institute and the CFA Society Chicago, and the American Institute of Certified Public Accountants. In addition to his professional license and certifications, Bill has passed the American Society of Appraisers’ four Machinery & Equipment appraisal courses (ME 201 through 204). He holds a General Class Amateur Radio License (KN4ACR).

MARCH 2021 | ISSUE 117

FEATURE PIPELINE CROSSING AGREEMENTS: Lessons Learned

BY MIKE CONRADI, CHRISTIAN KEOGH AND CORAN DARLING

n January of this year, DLA Piper concluded pipeline crossing agreements with two natural gas pipeline owners on behalf of our clients, a submarine cable owner, and a submarine cable operator. Any submarine cable owner or operator who has had to enter into such agreements will know that in certain scenarios, the negotiation process can be long and fraught with complications. As the number of these structures increases, the likelihood of coming across one of these agreements, or the need to enter into one, will only increase. In this article we set out: 1. what a pipeline crossing agreement is; 2. why a pipeline crossing agreement may be entered into; 3. some “lessons learned” from our recent negotiations, for other submarine cable owners and operators to consider when entering into pipeline crossing agreements of their own; and 4. a scenario where a pipeline crossing agreement is required to be entered into, but a crossing is undertaken in its absence.

In this article, we refer to the owner/operator of the existing pipeline the “crossed party” and the owner/operator of the submarine cable that will cross that existing structure as the “crossing party”.

WHAT IS A PIPELINE CROSSING AGREEMENT?

There are a number of matters relating to the ocean floor

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that need to be considered when laying a submarine cable. These include those which relate to naturally occurring aspects of the seabed, such as its geography, and those that relate to manmade structure, such as existing submarine infrastructure. While each present their own complications, it is the manmade items which can be the most problematic for a submarine cable owner. There are already hundreds of subsea cables and oil and gas pipelines in operation, which are on or buried under the seabed. Despite the best planning efforts, these structures can be difficult to avoid. For example, the existing structures may cut across a submarine cable’s planned route for a span of hundreds of kilometres. Re-routing a submarine cable’s route to avoid such structures may require a significant deviation to the originally planned route of the cable. This can involve many more metres of cable, changes to planned

operations, and additional time and effort, which can make re-routing expensive and uneconomical. It is where the routes of a submarine cable and another submarine cable or pipeline cannot be avoided that a submarine cable has to “cross” the existing structure. This means for the submarine cable to be physically laid over the other cable or pipeline, or to be laid over the portion of the seabed under which the existing structure is buried. In this scenario the parties will often enter into an agreement to set out matters relating to the crossing. A pipeline crossing agreement, is exactly what the name states: a crossing agreement covering a scenario where the existing structure being crossed by the submarine cable is a pipeline. The content of the agreement, and whether it will be entered into or not, will depend on the legal relationship between the parties and matters of international law. However, as a minimum, a pipeline crossing agreement records the agreed terms on a number of matters in respect of the crossing itself and potentially ongoing matters for the period the cable remains in place over the pipeline. These typically include: 1. risk and liability, and in particular what liability is owed by one party to the other if their structure damages the other structure; 2. obligations for the crossing party to have specific forms of insurance and the amounts of coverage required; and 3. the methodology for operations on or around the existing structure which should be undertaken by the crossing party and any rights for the crossed party to oversee or influence those operations. Often it may be possible to enter into a pipeline crossing agreement on a set of standard terms, such as those recommended by the ICPC – but there is no obligation on either party to use those terms (and see our comments below on the care needed to ensure any template is appropriate).

WHY ENTER INTO A PIPELINE CROSSING AGREEMENT?

As noted previously, the reason for entering into a pipeline crossing agreement and whether or not such agreement is discretionary or a mandatory requirement, will vary depending on the legal relationship between the crossing party and the crossed party and their respective rights to the relevant area of the seabed. The framework governing these matters is established and present in international law. In particular, the United Nations Convention of the Law of the Sea provides that: 1. In exclusive economic zone waters or on the high seas, a structure can cross a pre-existing structure on the seabed

without the need for consent, however if the crossing party causes any damage to the crossed party’s structure, then the crossing party will be liable for the damage caused. In these cases, while consent is not required to cross, entering into a pipeline crossing agreement can be mutually beneficial to both the crossing party and crossed party. This is because, amongst other factors, a limit on contractual damages can be agreed to the crossing party’s benefit and direct contractual remedies become available to the crossed party. 2. In territorial waters, the relevant territory has sovereignty and therefore the crossing party must comply with any relevant requirements imposed by the legal and regulatory regime of the territory in which the crossing is located. This includes respecting property rights granted in the territory and compliance with any requirements for the laying of a submarine cable. In some cases, some forms of property rights have been granted to the existing structure in priority to all other parties. The crossing party must therefore obtain the consent of that party to continue. Such consent will typically be provided in the form of a pipeline crossing agreement, with consent being withheld until agreement can be reached on the risk, liability, and other matters relevant to the parties. In other cases, a permit may be required from a local authority within the relevant territory to lay the cable within territorial waters before any operations can commence. In such cases the authority concerned may withhold the permit until a pipeline crossing agreement has been entered into with the crossed party.

LESSONS LEARNED

DLA Piper recently negotiated two pipeline crossing agreements on behalf of a client in the process of laying a cable in South East Asia: one in respect of a crossing in exclusive economic zone waters off the country concerned, and one in respect of a crossing in territorial waters. Set out below are some lessons learned in respect of both arrangements.

EXCLUSIVE ECONOMIC ZONE WATERS

In exclusive economic zone waters, negotiations are made with the mutual understanding that consent is not legally required from the crossed party to cross. As such, we found MARCH 2021 | ISSUE 117

FEATURE that our negotiations with the crossed party in exclusive economic zone waters were relatively straightforward - as both parties could see the benefit in reaching an agreement and having certainty about the procedures and risks. In such circumstances, some lessons learned include: 1. while certain procedural obligations can be agreed, anything which gives the crossed pipeline owner unilateral rights to stop the cable lay should be avoided, as neither party has a greater right to the seabed than the other party; and 2. a more mutual arrangement can typically be agreed and therefore the pipeline crossing agreement can be broadened to include work which may take place in the future – it can include obligations on the crossed party in respect of any work undertaken near the crossing party’s submarine cable.

TERRITORIAL WATERS

In the territorial waters, our client was required to obtain a permit to commence laying its submarine cable. Before this permit would be provided, a local regulatory entity required a pipeline crossing agreement to be signed with the owner of the pipeline that was proposed to be crossed. This requirement, however, was made within the broader context that the crossed pipeline owner did not own any of the seabed and could not itself prevent our client from crossing without an agreement if one could not be reached. In such circumstances, some lessons learned include: 1. Take care with model agreements: Different model agreements can be used for a crossing agreement and various versions have been made available online. However, careful consideration should be given to the different templates before use and whether the risk profile on which the model agreement has been drafted is appropriate to the context of the proposed crossing. The starting point for the pipeline crossing agreement we negotiated for the crossing in this matter was the Oil & Gas UK (“OGUK”) template for a pipeline crossing another pipeline. The terms included in this template are highly tailored to the risk profile of a pipeline is crossing another pipeline. This situation carries a much higher risk when compared to a submarine cable-over-pipeline crossing and so includes more aggressive terms to accommodate for the higher risk profile. For example, in respect of a pipeline crossing a pipeline, the crossing pipeline itself is extremely heavy, physical construction is carried out near/on the crossed pipeline,

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and typically ongoing maintenance is carried out on the crossing pipeline on a regular basis creating further opportunities for damage to occur. By contrast for a submarine cable crossing a pipeline, the risk profile is much lower. This is because the cable is light, physically small (being no larger than ten inches in diameter), does not require a physical crossing to be constructed as the cable can simply lay on top of the pipeline, and no regular maintenance is typically undertaken on the submarine cable. For various reasons specific to the matter, we had to use the OGUK template for pipeline/pipeline crossings for our negotiations. However, when negotiating a pipeline crossing agreement in respect of a submarine cable crossing a pipeline then a more suitable starting point should ideally be used. 2. Liability: The OGUK template crossing agreement proposed unlimited liability for the crossing party, expressed on an indemnity basis. As noted above, for a submarine cable crossing a pipeline, this liability profile is unreasonably high. This term was negotiated and instead liability was agreed to be limited and a capped to reflect the low risk involved in the cable laying process and crossing. In these circumstances, a crossing party should therefore aim to limit liability to appropriately reflect the risk profile of the cable lay operation. 3. Unilateral rights to revoke consent: Any unilateral rights for the crossed party to revoke consent to cross at any time should be removed. Most submarine cable owner/operators contract with a cable system supplier, who will perform the submarine cable lay operation. Once the cable laying vessel has set out to sea, unless there are delays due to inclement weather or similar issues, there is little to no opportunity to suspend operations without incurring significant costs to the submarine cable owner/operator through the vessel being held on standby. It is therefore sensible to remove such unilateral rights if possible. 4. Ability to suspend cable lay: Any rights for the crossed party to suspend operations, or those which gives the crossed party lengthy periods to consider matters before unsuspending operations, should be avoided. A sub-sea operation takes just a day or so and not an extensive period of time. As such, these kinds of positions could result in the cable laying vessel being put on stand-by (incurring significant costs for each day of the suspension) or may require a cut to the cable for the vessel to continue with other jobs. The likelihood of issues

arising with a submarine cable laying operation which would require operations to be suspended is very low. A submarine cable is much lighter and involves little to no construction on and around the existing pipeline, and therefore substantial hurdles in the laying operation are minimal. Our project applied industry best practice in respect of the cable laying operation, which further reduced the risks involved. It is therefore prudent to avoid such unnecessary terms where possible. 5. Insurance: Under the OGUK template, the crossing party must hold insurance and ensure that there is a “waiver of subrogation” rights in favour of the crossed pipeline owner. This is not appropriate for the purposes of many pipeline crossing agreements. As previously noted, most submarine cable owners/operators will procure a cable system from a turnkey supplier who will also perform the cable laying operation. It is this cable system supplier who should hold insurance to cover the cable laying operation. As such, it should be possible to comply with insurance requirements through addition of the crossing party to the cable system supplier’s existing policies. Because insurance is not often held directly by the crossing party, including a waiver of subrogation rights is not always within the crossing party’s control. Therefore, if pushed by the crossed party, such terms should be explored with the cable system supplier as soon as possible to ensure any relevant policies held by the cable system supplier can be amended to include the required rights.

CROSSING WITHOUT A PIPELINE CROSSING AGREEMENT

Rarely does a submarine cable owner/operator have the luxury of waiting until a crossing agreement is entered into before procuring a cable system, planning operations, and agreeing a date for the cable laying operation. As such, the negotiations between the crossing party and the crossed party may reach a stalemate, despite the impending date for the laying operation to commence. If obtaining consent and entering into a crossing agreement is a legal/regulatory requirement then entering into an agreement should be prioritised to regularise the parties’ position in respect of the crossing. However, in the above scenario, a submarine cable operator may need to consider crossing an existing pipeline without such agreement if it cannot be entered into time and if holding off on the cable laying operation until an agreement is made is not commercially feasible. On the project DLA Piper advised on, crossing with-

out a pipeline crossing agreement was a very real scenario which had to be considered. Fortunately, we were able to enter into a pipeline crossing agreement with days to spare, however crossing without a crossing agreement in place was seriously considered. Our clients were prepared to consider the option because: 1. appropriate procedures had been put in place to minimise the risk associated with the cable laying operation; 2. appropriate insurance was held to cover the risk of damage; and 3. it didn’t appear the gas pipeline had any stronger rights to the seabed than did our client, and there was no clear law on this position.

SUMMARY

At first glance pipeline crossing agreements can appear to be a small aspect of the broader contractual package being entered into by a submarine cable owner/operator. However, as identified in this article, such agreements cover and can unearth additional commercial, operational, and legal matters that have not been previously considered, and which can be difficult to traverse. As such, a submarine cable owner should from the outset, seriously consider the requirements for a pipeline crossing agreement, regardless of the location of the crossing to ensure no last-minute impediments to the submarine cable laying operation. STF MIKE CONRADI is co-chair of the international telecoms practice at global law firm DLA Piper LLP. He is rated amongst the leading telecoms lawyers globally by all the various guides and was the editor of the Communications Law Handbook. The legal guide Chambers and Partners says of him that “[he] produces punchy and straightforward answers - he’s direct and commercial and gets to the point quickly.” Mike has a particular interest in submarine cable systems - having worked on the legal aspects of more than 70 different cable projects during the course of his career. He has delivered a legal “masterclass” to every “SubOptic” event since 2004 and was the only private practice lawyer on the SubOptic industry legal standards working group. CHRISTIAN KEOGH is a member of DLA Piper’s telecommunications practice. Christian has broad expertise in advising on regulatory and commercial telecommunications projects including in relation to dark fibre, broadband, mobile termination, and sub-sea cables for clients in the Asia-Pacific, Middle East, Africa, Europe, and the UK. CORAN DARLING is a trainee solicitor at the London office of the global law firm DLA Piper LLP. His background expertise focuses on the areas of technology, financial regulation, and robotics, having completed an LL.M. in Innovation, Technology, & the Law and working within the technology sector prior to joining the team at DLA Piper LLP. He has published articles on automated data-transfer between wireless systems and the privacy concerns they include and continues to be involved in this area of research.

MARCH 2021 | ISSUE 117

FEATURE

THE NEPTUNE DECLARATION Over 300 Companies and Organizations Join Forces to Help Resolve a Humanitarian Crisis on the World’s Ocean BY GLOBAL MARITIME FORUM 68

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“We are witnessing a humanitarian crisis at sea. Throughout the coronavirus pandemic, seafarers have kept the world supplied with food, energy, and other vital goods, with no line of sight of when to go home to their families. They have become hostage of the situation and unable to disembark from their ships.

lobal industry and human rights leaders, including A.P. Moller Maersk, BP BW, Cargill, COSCO, DOW, Euronav, MISC Group, NYK, Rio Tinto, Shell, Trafigura, Unilever and Vale, sign the Neptune Declaration on Seafarer Wellbeing and Crew Change in a worldwide call to action to end the unprecedented crew change crisis caused by Covid-19. Hundreds of thousands of seafarers from across the globe have been left stranded working aboard ships beyond the expiry of their initial contracts and are unable to be relieved since the outbreak of the coronavirus pandemic. Fatigue after long periods at sea has significant consequences on the physical and mental wellbeing of seafarers. It also increases the risk of maritime incidents and environmental disasters and poses a threat to the integrity of maritime supply chains, which carry 90% of global trade. Despite significant efforts by international organizations, unions, companies, and some governments to resolve this untenable crew change crisis we are starting to see the situation getting worse as governments bring in more travel bans in response to the new strains of the Covid-19 virus. A number of key issues leave this critical situation unresolved: national authorities around the world continue to see crew changes and international travel as a Covid-19 risk; high-quality health protocols are not being consistently implemented by ship operators; and the disruption of international air travel has reduced the number of flights between traditional crew change hubs and major seafaring nations. “We are witnessing a humanitarian crisis at sea. Throughout the coronavirus pandemic, seafarers have kept the world supplied with food, energy, and other vital goods, with no line of sight of when to go home to their families. They have become hostage of the situation and unable to disembark from their ships. Yet, we can put an end to the crew change crisis without any risk to the general public health,” says Jeremy Nixon, CEO of ONE. More than 300 companies and organizations recognize that they have a shared responsibility based on their roles across the entire maritime value chain, and beyond, to ensure that the crew change crisis is resolved as soon as possible. They have signed the Neptune Declaration on Seafarer Wellbeing and Crew Change that defines four main actions to facilitate crew changes and keep global supply chains functioning:

Recognize seafarers as key workers and give them priority access to Covid-19 vaccines Establish and implement gold standard health protocols based on existing best practice Increase collaboration between ship operators and charterers to facilitate crew changes Ensure air connectivity between key maritime hubs for seafarers “Seafarers play a significant role in the global race to halt the coronavirus pandemic by providing critical medical supplies to the world’s population, particularly in developing economies. They are crucial to millions of peoples’ wellbeing. We call on our peers, government bodies and other stakeholders to join us in our efforts to ensure that the rights and wellbeing of the frontline workers of global supply chains are respected ,” says Graham Westgarth, Chairman of V. Group. The Neptune Declaration has been developed by a taskforce of stakeholders from across the maritime value chain including A. M. Nomikos, Cargill, Dorian LPG, Gaslog, Global Maritime Forum, International Chamber of Shipping, International Maritime Employers’ Council, International Transport Workers’ Federation, ONE , Philippine Transmarine Carriers, Sustainable Shipping Initiative, Synergy Group, V. Group, and World Economic Forum.

MEMBERS OF THE TASKFORCE BEHIND THE NEPTUNE DECLARATION COMMENT: CARGILL

“We believe it is essential that all parties in the supply chain-industry, government and non-governmental organizations-work together to find solutions that support the wellbeing of seafarers during the COV/0-19 pandemic. The Neptune Declaration is an encouraging step forward, bringing together leading industry leaders who are committed to taking action. Our top priority remains not only MARCH 2021 | ISSUE 117

FEATURE getting crews off board but also ensuring they are able to travel home safely.” Jan Dieleman, President, Cargill Ocean Transportation

GASLOG

“Through the Neptune Declarations I am so pleased to see the whole maritime logistics chain coming together to support our seafarers and to recognize them as key workers. It is a recognition of the vital role seafarers play in keeping the world economy moving and never more so than today as we continue to battle through the Covid pandemic.” Paul Wogan, CEO, Gaslog

GLOBAL MARITIME FORUM

“Seafarers are the key workers that allow vital global supply chains to continue to operate even during a pandemic . I am delighted to see how stakeholders from across the entire maritime value chain recognize that they have a shared responsibility to ensure that seafarers can do this safely.” Johannah Christensen, Managing Director, Head of Projects & Programmes, Global Maritime Forum

INTERNATIONAL CHAMBER OF SHIPPING

“Seafarers are the unacceptable collateral damage on the war on COV/0-19 and this must stop. If we want to maintain global trade seafarers must not be put to the back of the vaccine queue. You can’t inject a global population without the shipping industry and most importantly our seafarers. We are calling on the supply chain to take action to support seafarers now.” Guy Platten, Secretary General, International Chamber of Shipping

INTERNATIONAL MARITIME EMPLOYERS’ COUNCIL

“From the onset of the pandemic, an unprecedented tripartite cooperation between /MEG, ITF, JCS has resulted in ensuring governments and global maritime regulatory bodies focus on the plight of seafarers. Though the crisis and the difficulties remain, the industry was able to reduce the level of humanitarian crisis on board. Continued efforts are needed to ensure the four key actions raised in the Neptune Declaration are addressed by all stakeholders in the industry . Our thanks to the Global Maritime Forum and the Maritime Industry Crew Change Taskforce, for the great effort to bring all sectors of the industry together to commit to the Neptune Declaration. Let us hope, our combined effort will ease the suffering of our Seafarers·: Capt. Belal Ahmed, Chairman, International Maritime Employers’ Council

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INTERNATIONAL TRANSPORT WORKERS’ FEDERATION

“With the rise of new variants of Covid, we are sadly seeing governments backsliding from progress that was made last year and increasing their restrictions again. Let’s be honest here, the locking of borders to seafarers by governments is directly resulting in the forced labour of the world ‘s seafarers . Leaving the human indignity aside, this poses an incredibly dangerous risk to the supply chains of the global economy . Right now is the time for every CEO, every Board member, of every company that relies on global shipping, to recognise their responsibility to use their leverage to demand that governments unblock borders to seafarers before this crisis gets worse - it can’t be ignored anymore.” Stephen Cotton, General Secretary, International Transport Workers’ Federation

PHILIPPINE TRANSMARINE CARRIERS

“We have a unique opportunity to make a difference, coming together to resolve the humanitarian concerns of our seafarers - they are the “heart and soul” of a ship who enable this industry to “move the world.” Gerardo A. Borromeo, Vice-Chairman & CEO, Philippine Transmarine Carriers

SUSTAINABLE SHIPPING INITIATIVE

“The Covid-19 pandemic has thrust the human and labour rights risks faced by seafarers into the spotlight . As the world continues to rely on seafarers to keep our hospitals, pharmacies and supermarkets stocked, there is an urgent need to tackle the systemic challenges that have allowed the crew change crisis to continue. We join our industry peers today in calling for collaborative and coordinated action to bring this crisis to an end and meet our collective responsibility to our seafarers.” Andrew Stephens, Executive Director, Sustainable Shipping Initiative

SYNERGY GROUP

“Travel restrictions, despite the numerous efforts to ease them, have taken a devastating toll on the physical and mental wellbeing of the world’s seafarers. A majority of them onboard are still unsure on when they might return home even as they continue altruistically to play a critical role in the Vaccine and PPE supply chains. It’s a cruel paradox that is leaving their families in a constant state of despair and worry about their loved ones. The fact that many countries are still not giving the seafarers their deserved recognition is unacceptable. It is our collective responsibil-

ity to have all seafarers be truly recognized and treated as key workers with vaccinations a priority and travel restrictions lifted for them immediately.” Rajesh Unni, CEO, Synergy Group

WORLD ECONOMIC FORUM

“Keeping people safe while keeping food, material for the manufacture and administering of vaccines, and other essential goods moving efficiently is key for global supply chain continuity, trade and our everyday lives. By granting stranded seafarers key worker status, and by prioritizing vaccine a/location for transport crew, we can prevent a deepening humanitarian and economic crisis. Unified, prompt action from governments and other key stakeholders is needed to protect the lives and livelihoods of the 1.4 million seafaring men and women who serve us all across the seas, and who continue to face extreme risk to their safety and earnings.” Margi Van Gogh, Head of Supply Chain and Transport, Shaping the Future of Mobility, World Economic Forum .

FACT SHEET According to the latest Manpower Report from ICS and BIMCO, the worldwide population of seafarers serving on internationally trading merchant ships is estimated at 1,647,500 seafarers, of which 774,000 are officers and 873,500 are ratings . China, the Philippines, Indonesia, the Russian Federation and Ukraine are estimated to be the five largest supply countries for all seafarers (officers and ratings). During normal circumstances, ICS estimates around 100,000 seafarers are rotated every month, with 50,000 disembarking and 50,000 embarking ships to comply with relevant international maritime regulations, governing safe working hours and crew welfare, so that they can continue to transport global trade safely. At the height of the crew change crisis in the autumn of 2020, the UN International Maritime Organization estimated that around 400.000 seafarers were on their ships beyond the expiry of their contract, while another 400 .000 seafarers were unable to get to work.

these seafarers . Physically, seafarers can often work 7 days a week and 10-12 hours shifts to man ships, performing tasks that require constant professional attention. They also typically work between four and six months on ships, followed by a period of leave. However, extensive periods at sea, in some cases, over 17 months, have become routine as a result of Covid-19 and increase the risk of accidents onboard. On 1 December 2020 United Nations General Assembly adopted a resolution calling for all countries around the world to designate seafarers as key workers and implement crew change protocols . Progress on addressing the crew change crisis has been made through significant efforts by individual companies, international organizations , industry associations, labor unions, NGOs, and some governments, but the situation is still not resolved as many seafarers remain stranded on vessels beyond the expiry of their contracts . With the new Covid-19 mutations that spread more easily, some governments are introducing stricter measures on travelers in general and on seafarers and crew changes specifically, which can lead to a return to the untenable situation we saw last year. Inability to crew change poses a significant threat to the integrity of maritime supply chains. Around 90% of global trade is transported by commercial shipping, which moves the world’s food, energy, and raw materials, as well as manufactured goods and components - including vital medical supplies and many products sold in supermarkets. STF The Global Maritime Forum is an international not-for-profit organization committed to shaping the future of global seaborne trade to increase sustainable long-term economic development and human wellbeing. Learn more about the Neptune Declaration and For further information: Head of Communications, Torben Vemmelund at tve@globalmaritime forum.org or +45 2224 1446.

Fatigue after long periods at sea has significant consequences on the physical and mental wellbeing of MARCH 2021 | ISSUE 117

FEATURE

TO LAY OR NOT TO LAY A SUBMARINE CABLE IN CANADA BY JEAN-FRANÇOIS BILODEAU

ndersea fibre optic cables represent one of the most cost-efficient and reliable mechanisms to build high-speed telecommunications services to the population separated by large bodies of water. The installation or repair of subsea cables in Canada requires particular knowledge of statutory and regulatory provisions design to protect local owners. In this article, we will review the legislation enacted to protect local cable laying operators that must be considered when operating in Canadian waters. Let us imagine you have been awarded a contract by public tender to design, manufacture and install a subsea cable within Canadian waters to link communities separated by a large body of water. Many issues will require your attention but you will have to focus the laying operations on the vessel that will perform the installation and repairs during the lifecycle of the cable. The selection of a cable-laying vessel will depend on the amount of cable laid, the location and sea conditions prevailing in the selected area and the availability

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of support facilities for the vessel and crew. You will also need to be aware of the Coastal Trade Act1 (the “Act”) which provides that foreign ships shall not engage in any marine activity of a commercial nature in Canada unless allowed by a licence. The initial assessment of your options will require a determination on the availability of a Canadian operator to perform the envisioned installation. In the event, no Canadian operators are available or suitable, you may charter a foreign ship that will require a coastal trade licence to perform the activity or you may decide to enter a foreign ship into the Canadian bareboat registry. We will review the three options and discuss their advantage and difficulties from the Canadian law perspective. 1 * The author wishes to thank his colleagues at BLG, Jean-Marie Fontaine, partner and Nigah Awj, associate for their research and comments used in drafting the present article. S.C. 1992, c. 31

THE CANADIAN OWNED VESSEL SOLUTION

The hiring of a Canadian cable laying vessel would be the preferred solution because the Act is designed to protect Canadian shipping from the import of foreign ships to operate in local waters. The term “Canadian Ship” is defined in the Act as a vessel registered in the Canadian Register as provided in the Canada Shipping Act, 20012. This Act also defines “Foreign Ship” as a vessel that is not a Canadian vessel. The Act further provides that no foreign ship or non-duty paid ship shall, except in accordance with a licence, engage in coastal trade3. Coastal trade is defined as engaging in any marine activity of a commercial nature in Canadian waters4. In the event the Canadian operators are not available or interested in bidding on your cable installation sub-tender, you may elect to charter a non-Canadian ship as allowed by the Act by obtaining a licence authorizing this ship to engage in the coasting trade while in Canadian waters.

THE FOREIGN OWNED VESSEL SOLUTION

The application for the use of a foreign ship is made through a person residing in Canada such as a local agent by filing a form titled Application for vessel Temporary Admission to the Coasting Trade of Canada-Coasting Trade Licence Required. The form is submitted to the Canadian Border Services Agency (CBSA) and to the Canadian Transportation Agency (CTA). The applicant has to provide information on the foreign vessel, a complete description of the proposed operation, the identification of the “importer” and the details of the Canadian agent. The CTA publishes guidelines concerning trade licences that ought to be consulted in preparing an application.5 A Notice of Coasting Trade Licence Application will be posted on the CTA’s website and sent to all interested parties who subscribed to the service. The Notice will request that operators advise, within the time frames provided, whether they have a suitable ship available to perform the activity described in the application. If no offer of a Canadian ship is received by the deadline specified in the Notice, the CTA will consider the application uncontested and will issue a determination that there is no suitable Canadian ship available. The Minister of Public Safety and Emergency Preparedness shall then issue the requested licence to the applicant 2 S.C. 2001, c.26, article 2 and in Part II 3 Op. cit. 1. Article 3(1) 4 Id. article 2(1): (f) the engaging, by ship, in any other marine activity of a commercial nature in Canadian waters and, with respect to waters above the continental shelf of Canada, in such other marine activities of a commercial nature that are in relation to the exploration, exploitation or transportation of the mineral or non-living natural resources of the continental shelf of Canada; 5 Guidelines Respecting Coasting Trade Licence Applications

to perform the activity described in the application.6 The licence will include conditions relating to the service and activity to be performed, to the location of operations and to its duration which shall not exceed 12 months.7 However, if one or more Canadian ships are offered to perform the proposed activity, the CTA will consider the application contested and will receive written submissions from the applicant and the offeror. When an offer for a Canadian-registered ship is made, the applicant must contact the offeror to discuss the availability and suitability of the Canadian ship. If the application or offer are not subsequently withdrawn, the offerors will have 8 days to contest the application. The applicant has 5 days to file an answer and the offeror has 2 days to file its reply. The delays can be extended by making the necessary representations to the CTA. The complexity of the activity and the nature of the specialized equipment may support the need for time extension to exchange the pleadings and in our experience the CTA will grant reasonable extension requests. The administrative rules for the management of the process before the CTA is found in the regulations governing the CTA.8 To cite the Guidelines the role of the applicant and of the Offeror are as follows9: Applicant’s Role Faced with an offer of a Canadian-registered ship to perform the proposed activity described in the application that the applicant finds unacceptable, the applicant must prove to the Agency on a balance of probabilities that the offered ship is not technically or commercially suitable, or is not available to perform the activity described in the application; (…). The ultimate burden of proof rests with the applicant to demonstrate that the offered ship is not suitable and available (…). However, once an applicant has provided sufficient evidence to make its arguments persuasive, an evidentiary burden will shift to the offeror. This basically obligates the offeror to respond by adducing evidence to support its allegations. Offeror’s Role Where an applicant has submitted evidence to challenge the suitability and/or availability of the offered ship, the evidentiary burden will shift to the offeror to produce evidence to counter the applicant’s evidence.

THE CTA GUIDELINES

While the Act does not define the terms “suitable” and

6 Id. article 4(1) 7 Id. article 6 (1)(2) 8 Canadian Transportation Agency Rules (Dispute Proceedings and Certain Rules Applicable to All Proceedings) (SOR/2014-104) 9 Op. cit. 5, articles 3.3.2 and 3.3.3

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FEATURE “available”, the CTA will assess the suitability of the Canadian-registered ship in relation to the technical and operational requirements of the activity and whether the Canadian-registered ship is capable of performing the activity10. The suitability of a ship comprises technical and operational capability – technical characteristics of the ship and equipment required to operationally perform the proposed activity; and commercial and economic suitability – the commercial and economic implications of using the foreign ship versus the offered Canadian-registered ship. The availability of a ship will include a consideration of the following factors: • the underlying rationale as to why the dates stipulated in the application are crucial and why alternatives could not be considered; • the capability of the offered ship to be at the required site on time; • the normal, or usual, time period for conducting a proposed activity; and • the ability of the offered ship to perform the proposed activity by the end of the required period (or relevant shipping/activity season).

THE CTA DECISIONS

The prior decisions of the CTA provide a reference to determine whether the offered Canadian vessel is suitable or available to carry out the activity contemplated by the applicant. In particular, the CTA has held that: • It is the offering party’s responsibility to establish that the offered vessels can carry out the required work, and that if there is insufficient evidence that the offered vessels can meet the technical and availability requirements of the application, the offered vessel is not suitable11. • Where evidence is led by the applicant that the Canadian operator’s ship does not meet the technical requirements for the activity and has no prior experience conducting similar activities and the Canadian offering party fails to rebut this evidence, the Canadian vessel will be found to be unsuitable to the activity12. • The CTA recognizes the importance of respecting the project requirement regarding the type of vessel to be used. Where the project documentation calls for a vessel with certain specifications, the CTA will give weight to these requirements13. • The CTA also recognizes the importance of ensuring the availability of the vessels to carry out work in remote 10 11 12 13

Guidelines Respecting Coasting Trade Licence Applications Decision No. 314-W-2008 Decision No. 90-W-2020 Decision No. 584-W-2008

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areas with short shipping seasons, such as the Arctic14. • If the offering party fails to provide evidence (i.e. response to applicants’ technical questionnaire) on the offered vessels’ technical suitability, as well as cost information in response to the applicant’s statement regarding cost disadvantage, the offered vessel is not suitable15; • The CTA found that of the offering party did not demonstrate that any one of its offshore supply vessels could be outfitted with the specialized cable handling and repair equipment to meet the time frames for having a vessel underway upon notification of a cable fault or to meet the time frame for completion of a cable repair16. • Where an offering party fails to address adequately the technical requirements of the activity in its offer, the offered Canadian vessel will not be considered suitable17. • The CTA found that the offered smaller tanker was unsuitable because it would not provide sufficient capacity to suitably transfer the oil products between the refinery and the terminal and that its smaller capacity would require the lowering of the refinery output (i.e. throughput), which would affect the commercial viability of the project18. The CTA is bound to render a decision within 120 days of the filing of the application.19 In the event the application is denied, the foreign ship will not be issued a licence to trade in Canadian waters and the offered vessel will likely have to be used for the activity. A judicial review may be filed before the Federal Court of Appeal20 pursuant to section 41 of the Act or the matter may be brought to the Governor in Council by way of petition to vary or rescind the decision21. The CTA may also review or rescind its decision if there has been a material change in the facts or circumstances pertaining to the case.22 If the application is granted because the CTA concludes that no Canadian vessel is suitable and available for the activity, the applicant will be issued with a licence by the Minister. The licence, not the CTA decision constitutes the authority to commence the coastal trade activity.23 When employers are using temporary foreign workers aboard ships that plan to work in Canadian waters pursuant to the Act, they must obtain a Labour Market Impact 14 Decision No. 314-W-2008 15 Decision No. 261-W-2007 16 Id. 17 Decision No. 297-W-2004 18 Decision No. 461-W-2001 19 Canada Transportation Act (S.C. 1996, c. 10), article 29(1) 20 Federal Court Act, R.S.C., 1985, c. F-7, Section 28(1)(k) 21 Idem, article 31 22 Op. cit 19. Article 32 23 Op. cit 11, article 13

Assessment from Employment and Social Development Canada. The temporary foreign worker must also obtain a work permit from the Citizen and Immigration Canada. Vessels imported in Canada are usually subject to a duty rate of 25% of fair market value. Under the Vessel Duties Reduction or Removal Regulations24, duties on vessels authorized to be temporarily imported for use in Canadian waters will be reduced on the basis of 1/120 of the value of the ship. The duty will be calculated as follows25: (a) the value of the vessel in Canadian dollars, divided by 120 times the applicable rate of duty, equals the duty payable for each month or part of a month during which the vessel remains in Canada; and (b) the minimum payment under the accounting procedure equals one month (or a 30-day period) of duties. It should be noted that the goods and services tax (GST) is payable. The other possibility available to you would be to lease the foreign vessel to a Canadian operator via a bareboat charter.

THE BAREBOAT CHARTER SOLUTION

You conclude, after having canvassed the Canadian market that no vessel is capable of conducting the intended cable operation. However you have identified a foreign vessel that can perform the activity. In order to circumvent the costal trade application, the foreign vessel could be bareboat chartered to a Canadian operator for the duration of the activity. In a bareboat charter, an owner leases the commercial vessel to another person. The charterer becomes responsible for providing the crew and the provisions. The bareboat charter-party delegates to the charterer complete possession and control of the vessel. In order to charter a foreign vessel to work in Canada, you will have to list the vessel in the Canadian Register of Vessels.26 You also need to ensure its registration is suspended in its original foreign registry. This option would require the vessel to be manned by a Canadian crew that will be paid at the local rates. You will also need to either incorporate a Canadian company or partner with a local operator to manage the vessel for the charter-party duration. The vessel would be subject to the payment of the same duties. The following information will be needed to proceed with the transfer: 24 Sor/90-304 25 Canada Border Service Agency, Temporary Importation of Vessels, Memorandum D3-5-7, ISSN 2369-2391, January 6, 2016 26 Op. cit. 2, article 48: A vessel that is registered in a foreign state and that is bare-boat chartered exclusively to a qualified person may be listed under this Part as a bare-boat chartered vessel for the duration of the charter if, for the duration of the charter, the registration is suspended in respect of the right to fly the flag of that state.

• Completed Form 18—Application for Bareboat Charter Registry • Bareboat charter party agreement • Certified transcript or abstract of vessel registration in the foreign state that shows all liens and mortgages • Letter from the existing foreign state (flag) stating that the bareboat charter registration is permitted under the law of that state and that for the duration of the charter, the registration is suspended in that state. • Letter of consent from the mortgagees if there are any • Current International Tonnage Certificate (ITC) • Letter of consent from the owners The registration of a foreign vessel into the bareboat registry will present administrative difficulties from the crewing perspective and management of the vessel. However, this can be alleviated by delegating the management to an agency.

CONCLUSION

The laying of cables in Canada may be problematic because few cable ships are available in the market. The alternative may be to use and modified a Canadian offshore supply vessel but such a platform will have limitations with respect to the lengths of cables that may be laid and you will also have to hire specialized personnel to operate the cable equipment. In bidding for a cable manufacturing and installation, due consideration must be given to the use of the cable-laying vessel because the Canadian legislation is designed to protect the local shipping industry from the importation of foreign vessels to operate in Canadian waters. The preferred method would be to use a Canadian cable ship. However, the number of cable ships available in Canada are limited and the contractual demands by the local cable companies may not be compatible with your project commercial requirements. Event if the local companies do not seem interested in your project, they could still oppose the temporary importation of a foreign vessel under the coastal trade application. It would seem that the negotiated use of a Canadian vessel must be fully explored before deciding to apply for a coastal trading licence or to the register a vessel in the bareboat registry. STF JEAN-FRANÇOIS BILODEAU is Counsel at Borden Ladner Gervais LLP and focuses his practice on maritime law-related disputes. As a former member of the Royal Canadian Navy Reserve, his experience in navigation and ship management enable him to provide relevant legal services, supported by technical knowledge of the marine industry. He represents different interests active in the marine industry before Québec and federal courts and the Supreme Court of Canada.

MARCH 2021 | ISSUE 117

FEATURE

SO, YOU WANT TO LAY A CABLE

A FABLE BY STEPHEN NIELSEN

Going from Proposal to Permitted

had a bit of a windfall lately. A new, previously absolutely untapped market to the submarine cable industry became open to the possibility of a new cable route in the Atlantic Ocean; the lost city of Atlantis is finally ready for hi-speed internet. I won’t lie. I’m fairly new to the installer side of the industry, as I’ve mostly just reported on it as a SubTel Forum journalist. That said, I’m not going to look a gift horse in the mouth, so I immediately began taking all the steps necessary to get my first new cable project underway. So, here I am, my system is designed. I have a tentative landing sight to link with a terrestrial system that feeds Atlantis’ largest city, the Council of Elders has my award ceremony scheduled, and I even have some real prospects for financing. Things are going about as smoothly as I could have possibly imagined and I’m hoping my new cable could hit the water in under 12 months. Then, suddenly, I hit the unique install challenge known as “Permitting.” Now, I won’t dive into the minutia of the various departments of the Atlantean Oligarchy this ultimately involved. Instead, let’s talk about how this led me to finding out that

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my experience was hardly unique (besides the hitherto lost civilization). In the international industry of submarine cables, each country like Atlantis has its own set of permits required for the many situations that can arise when planning a new system. Some environmental, some territorial, others financial. The big take away is that organizing all of the permits to allow a project to progress can take significantly longer than you would expect. In fact, system suppliers might agree that permitting is one of the most time intensive aspects of installing a new cable, even if it can be done concurrently with other aspects of the project. The permitting for a new system can be time consuming and costly, even beyond the Pillars of Heracles. It needs to be included very early in the planning stages of a project to properly avoid any issues down the line. For instance, cables in the U.S. can be subject to multiple government agencies, including, but not limited to, the U.S. Army Corps of Engineers, U.S. Fish and Wildlife Service, the EPA, NOAA, state departments of Environmental Quality/Protection, archeological or cultural preservation bu-

reaus, or other local agencies. That’s in addition to occasions where new system projects are under the scrutiny of non-governmental groups, like environmental activists, or representatives of local populations. As preliminary planning is completed, identifying possible landing points, additional research must be done to identify any local agencies and any possible permits required in that area. Construction plans must be kept flexible as these are identified so that adjustments can be made. Collecting all this technical, commercial, and regulatory data is generally referred to as the feasibility study. The second step in this permitting process is the, sometimes complex, process of the actual paperwork needed for the permits, navigating the bureaucracies of multiple agencies. First must come the desktop study, to identify the agencies’ jurisdiction, regulatory requirements, and any seabed user requirements. This will also determine more accurate time and cost estimates for the project budget and scheduling. At this point, any restricted areas for cultural or environmental reasons will come to light, allowing re-engineering of the system to work around them. This is the point where you’d contact local Atlantean agencies to find out which permits, licensing agreements, zoning waivers are required. It’s worth mentioning, however, that even the most comprehensive desktop study will only give a rough estimate of total costs and what permits will be required. Again, each agency has its own bureaucracy, and each country has its own laundry list of authorities that will have requirements. To give an idea of the kinds of agencies we’re talking about, many countries have four general categories of necessary permitting:

1. Operator’s License – the license to operate a submarine cable system 2. Permits in Principle – the permissions or approvals to install a cable system within a country’s territorial waters, possibly its EEZ, and along a terrestrial route to the Terminal Station 3. Operational Permits – those permits necessary for survey, installation, and maintenance operations by the installer/ contractor who is employed onsite (whether marine or terrestrial) to accomplish day-to-day operations 4. Permission from other Marine Users – includes crossing permissions from other cable and pipeline owners. Having successfully received my permits from the Atlantean Oligarchy, re-engineered my planned system to avoid their National Kelp forest, and negotiated permissions with the local Kraken Ranchers’ Association, my system is ready for install. When all is said and done, permitting took more than a year. After checking around, I’ve found that a year or more is about the average, highlighting exactly why planning for it from the beginning is absolutely necessary, and my mistake by not doing so added at least six months to my entire project. It’s a mistake I absolutely won’t make when planning my next system. I hear Avalon is looking to move to a fiber optic cable! STF A graduate of the Virginia Commonwealth University School of Mass Communications, STEPHEN NIELSEN has been a Staff Journalist for Submarine Telecoms Forum since 2012. He was previously the Life Section Reporter for Winchester Star in 2014 to 2015, and Staff Writer for Capital News Services in 2013. He was a Finalist for Society of Professional Journalism’s Mark of Excellence Award and has supported blogging and streaming at multiple PTC and SubOptic conferences. Of late, he is a 6th grade English teacher for young budding scholars in Loudoun County, Virginia, where over the last year he has become ‘expert’ on asynchronous, virtual teaching. In 2021, he is completing a master’s degree in education at George Mason University.

MARCH 2021 | ISSUE 117

• Almanac Data Sets • Capacity Pricing • Data Center and Cable Market Studies • Market Sector Reports • Customized Reporting

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MARCH 2021 | ISSUE 117

BACK REFLECTION

THE MAN HISTORY FORGOT (PART 5) BY STEWART ASH AND BILL BURNS

s we explained in January, new funding was required to keep the dream of an Atlantic cable alive, and perhaps in part because of the adverse publicity of the 1865 failure, securing British investment was once again proving difficult. Also, in the aftermath of the American Civil War, which had ended in May 1865, Cyrus Field found little enthusiasm in America for supporting another attempt at laying the cable. Once again it was Daniel Gooch and John Pender who answered the call. They raised £600,000 of new investment, contributing £10,000 each and co-founding the Anglo-American Telegraph Co in March 1866. Both became Directors of this new company, and Richard Atwood Glass was appointed as its first Chairman. The company took over the remaining equity in Field’s New York, Newfoundland & London Telegraph Co, appointing Field as a non-executive Director. Unsurprisingly, a new contract to manufacture and lay a second Atlantic cable was given to Telcon; the fee for this was to be paid in shares of the Anglo-American Telegraph Co. There has been no correspondence found to date to indicate that James Stuart-Wortley played any active role in setting up this new company, although he remained Chairman of the Atlantic Telegraph Co. Telcon had already started manufacture of the cable at their own risk,

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“Awaiting the Reply” (Robert Dudley) The scene on board Great Eastern after the recovery of the 1865 cable.

allowing the work to be completed quickly. All the cable was loaded by late June, so the Great Eastern was able to sail for Ireland from Sheerness on 30 June 1866. The lay commenced from Bantry Bay on 13 July, and this time all went well. Just two weeks later, on 26 July, Great Eastern reached Heart’s Content in Newfoundland, and the cable end was landed the following day. On 9 August, Great Eastern, together with a small squadron of support ships, sailed from Heart’s Content in search of the buoy marking the position of the lost end of the 1865 cable. After thirty attempts the cable end was finally brought on board on 2 September and a 600nm length of new cable spliced on. The completed

cable was tested successfully to Ireland, then laid back to Heart’s Content, and on 8 September the lay of the 1865 cable was finally completed when the shore end was landed. On 19 September 1866, the Great Eastern returned to Liverpool in triumph and, to celebrate this great achievement, the American Chamber of Commerce in Liverpool, an association founded in 1801 to promote trade between Britain and the USA, put on a gala dinner chaired by Sir Stafford Northcote (1818-87), 1st Earl of Iddesleigh. At the dinner, Sir Stafford read out a letter he had received from Edward George Geoffrey Smith-Stanley (1799-1869), 14th Earl of Derby, then Prime Minister, conferring by order of

Queen Victoria a number of decorations on some of the major contributors to the project. There were baronetcies for Daniel Gooch and Curtis Miranda Lampson (1806-85), and knighthoods for James Anderson, Richard Atwood Glass, Samuel Canning and William Thomson. Despite his very large part in the success of the enterprise, John Pender was denied an honour, and regular readers will know the reasons for this. However, it also appears that James Stuart-Wortley and Augustus Hamilton both refused the offer of honours. The next letter in the collection alludes to all not being well with this process, but tantalisingly gives no clear indication of what the problems might have been. On 4 October, Stuart-Wortley sent a letter of congratulation to Samuel Canning in anticipation of the honour to be bestowed on him. Having received no reply, he sent a follow-up note on 13 October. Canning replied on 14 October, apologising for not replying sooner, and concluded with the following note: ‘Although I am of opinion that from some cause or other the privilege of merit could not well be put in a more objectionable manner either to Mr Glass or myself. I have now to inform you that it is not my intention to refuse the distinction offered me by Her Majesty’. Unlike Stuart-Wortley, Canning was prepared to accept a knighthood, but clearly was not satisfied with how it had been offered. This may relate to the fact that his Chairman had not received his just recognition from the establishment, because of the unjust findings of the committee of enquiry into the 1865 Totnes election, but we cannot know. The Atlantic Telegraph Co now

entered a period of profitable business, working in concert with the Anglo-American, but relationships between the shareholders of the two companies were not cordial. The shareholders of the Atlantic Telegraph Co felt that as the pioneers they deserved the lion’s share of the revenue, and the shareholders of Anglo-American believed that it was only through their

Menu of the Gala Dinner at Liverpool, 1st October 1866

investment that the Atlantic Telegraph’s cable was working, and they deserved a share of this revenue. It was up to James Stuart-Wortley and Richard Atwood Glass to keep a lid on this powder keg. However, due to ill health, Atwood Glass was forced to stand down as Chairman of the Anglo-American in March 1867. He was replaced by Charles Edward Stewart (1806-68). Charles Stewart was a wealthy bachelor, who had joined the Navy as a young boy in 1827, rising through the ranks before joining the diplomatic service as

Financial Secretary and Treasurer to Sir Henry Pottinger (1789-1856), in Hong Kong during the second Chinese War (1856-60), playing an active role in the negotiation of the peace treaty that ended the campaign. As well as an investor in the Anglo-American Telegraph Co, he was also Secretary of the London and North-Western Railway Co. From about this time on it appears that the Anglo-American began to promote a merger between the two companies. There was a new battle for Stuart-Wortley to fight, but by now he was suffering a serious decline in his health. On 21 October 1867, the Morning Post reported that: ‘The Right Hon. James Stuart Wortley, who is at present on a visit to his relative, Lord Wenlock, at Escrick Park [Yorkshire], was on Friday suddenly attacked with a serious illness while in York.’ Despite his ongoing bouts of illness, he continued to serve as Chairman of the company. Towards the end of 1867, the directors of the Atlantic Telegraph Co were anxious to improve the position of the company, possibly by an amalgamation with Anglo-American, and the business conducted at an extraordinary meeting held at the London Tavern on 2 December 1867 was reported the next day by the Morning Post. In his opening remarks, after telling the meeting that the Board wished the shareholders to take action (which he later set out in a motion, outlined below), Stuart-Wortley continued: ‘For himself he had been ill for some time, and he was afraid that he should be obliged to consider the return of his illness as periodical.’

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BACK REFLECTION

At the close of his remarks, he presented this motion: ‘That a committee of the shareholders be appointed to assist and advise the directors as to the best means for carrying out such measures as may be deemed necessary to improve the position of the company, either by amalgamation with the Anglo-American Telegraph Company, or by raising the necessary capital to redeem the existing charge of £125,000 per annum on the revenue of the Atlantic Telegraph Company, and to aid the board in consideration of other important matters.’

The motion was adopted unanimously and, on 10 January 1868, a prospectus was published in the Daily News for an issue of preferential capital in the amount of £1,300,000: ‘For the purpose of regaining possession of the Cables at present worked by the Anglo-American Telegraph Company’ These extracts from the prospectus provide more details: ‘The negotiations recently conducted by the Board, conjointly with the Committee of Shareholders appointed at the Extraordinary Meeting of December 2, with the object of effecting—in union with the Anglo-American Telegraph Company’s Board—a general amalgamation of all interests, thereby simplifying the management and securing economy and efficiency, have been unsuccessful. ‘These negotiations have, however, still further impressed the Board and the Committee with the great importance of united management, and they have therefore unanimously decided upon the immediate issue of a new preferential capital at 10 per cent. per annum, to enable the Atlantic Telegraph Company to recover possession and

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management of their two submarine cables.’ ‘This will relieve the shareholders from a charge of £125,000 now payable in each year to the Anglo-American Company before the Atlantic Stock becomes entitled to interest of any kind. No allotment will be made, and all moneys received on applications will be returned, if the Board are unsuccessful in raising the amount necessary to extinguish the rights and privileges of the Anglo-American Telegraph Company.’

The closing date for applications was 28 January 1868, but in the interim, further negotiations with Anglo-American again failed to result in an agreement. This left the Atlantic Telegraph Co in a difficult position, and on 15 February, this news was published in the New York Journal of the Telegraph: ‘It appears that the scheme to buy out the Anglo-American Company has not been successful. At a meeting held in London, January 24, Mr. Wortley, chairman of an extraordinary meeting of the Atlantic Telegraph Company, complained of the Anglo-American Company as having obstructed the project and endangered its success. A new meeting was called for further consultation, on some day during the present month.’ Four days later Anglo-American’s Chairman, Charles Stewart, collapsed and died in the company offices in Old Broad Street, and the shareholders elected John Pender to replace him. At that time Pender was still Chairman of Telcon, but in order to take up the role he stood down in favour of Daniel Gooch while still retaining his equity stake in Telcon. Later that year Pender would start building his cable to India, known

as the Red Sea Line (Issue 111 March 2020) that would become the foundation of the Eastern Telegraph Company. On 16 March 1868, another extraordinary meeting was held to again consider the raising of £1,300,000 of new capital. However, there had been dissent among the ranks of the company’s shareholders, and Stuart-Wortley had to advise the meeting that some shareholders had taken the extreme measure of having an Act of Parliament passed that would prohibit the Atlantic Telegraph Co from making an offering to raise capital without a 75% affirmative vote. He also reported that these shareholders had subdivided their holdings, creating such a large number of small votes that it would be impossible for the board to reach the threshold. While there is no documentary evidence to prove it, this sounds very similar to a tactic that Pender later used in his fight for control of the Direct United States Cable Co in 1877. Given this, the Chairman told the meeting that he believed the only course now open to them was to accept counterproposals made by Anglo-American for the joint working of the two companies. As Stuart-Wortley’s physical condition continued to worsen, A Scrap Screen (Alice Buchan’s 1979 family memoirs), records the decision to give up Upper Sheen House and move his family back to Central London, in April that year, as follows: ‘…as the two girls were growing up, and the boys had to be educated, something in the way of a London home for them had to be contrived. The house they chose, No. 16 St James Place,…’

On 29 May 1868, a contract was signed setting out an agreement between the Atlantic Telegraph Co and Anglo-American, in which each company retained its own board, but the management was remitted to a joint committee formed from the two boards. By this stage Stuart-Wortley was clearly struggling to carry out his duties as Chairman, and further bouts of incapacity followed. On 6 July 1868, Curtis Lampson wrote to his wife, Jane: ‘I hesitated for a long time about troubling Mr Wortley in his present feeble state of health with my letter of resignation but I did not feel like writing to any one else on the subject & I was anxious that he should at this time keep up his connection with the Company as Chairman by transmitting my letter of resignation. I do hope and expect that his health will so improve as to enable him to go into the City at no distant period – the work will now be simple & easy, indeed his presence at the office will not often be required if he should not desire to go – I fancy that Mr Grimston will be made deputy chairman & if Mr Wortley is well enough to see him he would no doubt at my suggestion go out to Sheen? My Wife has reported your observations about the Knighthood your views are in accordance with mine & I do not think it desirable at this time to trouble Mr Wortley about this matter –‘ At the age of 62 Lampson had decided to retire, and was indicating to his Chairman that Robert Grimston, who had finally agreed to join the Board, was willing to replace him. Once again there is a reference to the knighthood that Stuart-Wortley refused in 1866. There were no further public

meetings reported in 1868, but on 20 March 1869 an ordinary general meeting was held at the offices of the company with Stuart-Wortley in the chair. This was to be the last meeting he ever attended; he closed it with this advice to the shareholders, and the meeting was then adjourned until 2 July. The record shows that: ‘He advocated an amalgamation between this and the Anglo-American Company. It would, in his opinion, contribute largely to the prosperity of both Companies.’ It would appear that around this time Stuart-Wortley accepted the inevitable, as A Scratch Screen continues: ‘At last, somewhere about 1869, all efforts to stand and walk and be as other men, were relinquished, and from that moment the clouds seemed to lift. He suffered less, he took up as it were a new life within narrow limitations, and his natural bravery and serenity of mind made for years the sunshine of our home.’ The adjourned meeting re-convened on 2 July 1869. In his opening remarks, the Chairman, now L.M. Rate rather than Stuart-Wortley, explained that: ‘he took the place of the Hon. James Stuart Wortley on account of that gentleman’s illness necessitating his withdrawal from all active pursuits at present, but it would be a source of satisfaction to the shareholders to learn that the hon. gentleman would still remain a member of the board.’ Bradshaw’s 1869 Shareholders’ Guide in its entry for Anglo-American lists the members of the Joint Committee which was then managing the two companies. These were Richard Glass from

Anglo-American and Stuart-Wortley from the Atlantic Telegraph Co, together with four others drawn from both companies: Robert Grimston, F.A. Bevan, Captain James Gilbert Johnston, and J.C. Pickersgill-Cunliffe. At a special general meeting of Anglo-American on 31 January 1870, a resolution was passed 19 to 12: ‘approving an agreement between the Anglo-American Telegraph Company (Limited) and the Atlantic Telegraph Company for varying the articles of [the May 1868] contract between those Companies.’ A few days later, on 3 February 1870, the very last annual meeting of the Atlantic Telegraph Co was held at the London Tavern, with L.M. Rate in the chair. The last order of business was a resolution to approve and adopt: ‘...the agreement between the Anglo-American Telegraph Company and the Atlantic Telegraph Company, varying the articles of contract between the two Companies, dated the 29th of May, 1868, authorising the Directors to introduce a bill into Parliament to sanction the conversion of the stocks of the Atlantic Company into stocks of the Anglo-American Company at the rates agreed upon, and for the transfer of the property of the former to the latter Company, and authorising the Directors to carry into effect the foregoing resolutions.’ Finally, at a meeting of Anglo-American on 3 May 1870, with Captain A.T. Hamilton in the chair, the new chain of command was made clear, the only vestige of the Atlantic Telegraph Co being the appointment of two of its former directors to the Anglo-American board: MARCH 2021 | ISSUE 117

BACK REFLECTION ‘According to the provisions of the contract between the Anglo-American and Atlantic Telegraph Companies, the powers of the joint committee ceased and determined on the 25th February, since which date the Company’s business has been carried on by the Directors of the Anglo-American Company; two Directors of the Atlantic Telegraph Company, the Hon. Robert Grimston and L.M. Rate, Esq., having been elected members of the board of this Company.’ This, then, was the end of the company which James Stuart-Wortley had worked so hard to bring back from the brink of disaster after the failure of the 1858 Atlantic cable, and it coincided with the beginning of the final decline in his own health. From the family’s return to London in May 1868 he had required the use of a wheelchair, a “bath chair” in the terminology of the time, although he still maintained a lively interest in politics and current affairs. There is little mention of him in the press over the next decade, although we do have this photo of him from the family’s archive: In March 1872, James and his wife were in Bruges, where he was ‘in but indifferent health’. From there they were leaving for Dusseldorf. In May 1874 he again became politically active for a time, serving as president of a private committee formed by two sitting MPs to promote the preservation of the jurisdiction of the House of Lords as a court of final appeal. Several meetings were held over the next twelve months, including some at his home. He appears to have remained on good terms with John Pender, because

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he, Jane and his two daughters are recorded in the Visitors Book for 18 Arlington Street every May from 1876 to 1880. From 1877 they had moved to 5 Mandeville Place off Manchester Square in London. The timing of these visits to Arlington Street coincided with the opening of Royal Society of Arts Summer exhibitions. The Penders were James Stuart-Wortley in his Bath Chair

major patrons of the RSA and Emma used to host an annual Academy dinner for the great and good during the week the exhibitions opened. These dinners had proved so popular that they had expanded from a single event to three consecutive nights, to which, as well as artists, writers, academics and politicians were invited. The queue of coaches arriving at the doorstep stretched back past Devonshire House in Piccadilly, and it took them over an hour to get into the courtyard at 18 Arlington Street. It is likely that the Stuart-Wortleys were guests at these dinners. No further news of him can be found in the newspaper archives until

the notice of his final illness in early August 1881. James Stuart-Wortley died at age 76 on 22 August 1881, at Belton House in Grantham, now owned by the National Trust. He and Jane had been visiting Henry Francis Cockayne-Cust (1819-84), who had been a Captain in the Hussars and the Conservative MP for Grantham between 1874 and 1880. The will of the Right Honourable James Stuart-Wortley was proved in London, on 21 December 1881. He left a personal estate of £8,394 17s 9d and his two sons, Archibald John Stuart-Wortley (1849-1905) and Charles Beilby Stuart-Wortley (1851-1926), were appointed his executors. James Stuart-Wortley was laid to rest in the family plot in the churchyard of St Leonard at Wortley in South Yorkshire. The day after James Stuart-Wortley’s death, his home-town newspaper, The Sheffield Daily Telegraph, published an obituary with a detailed account of his life, which included this description of his last years: ‘For the last ten or twelve years, Mr Stuart Wortley has not had the use of his limbs, and during that time he has lived the life of an invalid, though taking a keen interest in public affairs until nearly the close of his existence. His was a wellknown figure in the west end of London, as he was wheeled about in his bath chair, but though thus cut off, in a sense, from the ordinary ways of the men of mark to whom he belonged, his interest in the affairs of the nation, in which during the prime of his years he had played a distinguished part, was not abated by his ill-health. Up to very recently he read

James Stuart-Wortley’s

Gravestone

Gatehouse to the Courtyard at 18 Arlington Street

his Times regularly in the morning, and with all the carefulness of a man who felt that as he could not mingle with the crowd of workers, it was the more important he should keep himself fully informed of all that was passing in the busy world about him. Not many days before his demise one of the questions he put to his son, our respected Junior Member, was an inquiry as to whether the Lords and Commons had arrived at an agreement on the Land Bill. So hard is it for the man who has borne his part in the battle to forget others on whom the duty has fallen!’ In this long and detailed obituary, there is only a single sentence on his work with the Atlantic Telegraph Co: ‘He was chairman of the first Atlantic Cable Company in 1863—the company, it will be remembered, which “lost” its cable, and had ships engaged “grappling” till it was successfully picked up and safely laid.’ With three factual errors in its 35 words, it appears that this is all the paper’s editors could find to say about James Stuart-Wortley’s significant contributions to submarine telegraphy, so there is little wonder, when it comes to our industry, that he is the man that history forgot! STF BILL BURNS is an English electronics engineer who worked for the BBC in London after graduation before moving to New York in 1971. There he spent a number of years in the high-end audio industry, during which time he wrote many audio, video, and computer equipment reviews, along with magazine articles on subjects as diverse as electronic music instruments and the history of computing. His research for these articles led to a general interest in early technology, and in the 1980s he began collecting instruments and artifacts from the fields of electricity and communications.

In 1994 a chance find of a section of the 1857 Atlantic cable inspired a special interest in undersea cable history, and soon after he set up the first version of the Atlantic Cable website <https://atlantic-cable. com>, which now has over a thousand pages on all aspect of undersea communications from 1850 until the present. Bill’s interest in cable history has taken him to all of the surviving telegraph cable stations around the world, and to archives and museums in North America and Europe. He has presented papers on subsea cable history at a number of conferences, and in 2008 he instigated and helped organize the 150th Anniversary Celebration for the 1858 Atlantic cable at the New-York Historical Society. Most recently, in 2016 he was involved with the celebrations in London, Ireland and Newfoundland to mark the 150th anniversary of the 1866 Atlantic cable. Since graduating in 1970, STEWART ASH has spent his entire career in the submarine cable industry. He joined STC Submarine Systems as a development engineer, working on coaxial transmission equipment and submarine repeater design. He then transferred onto f ield engineering, installing coaxial submarine cable systems around the world, attaining the role of Shipboard Installation Manager. In 1986, he set up a new installation division to install f ibre optic submarine systems. In 1993, he joined Cable & Wireless Marine, as a business development manager and then move to an account director role responsible for, among others the parent company, C&W. When Cable & Wireless Marine became Global Marine Systems Ltd in 1999, he became General Manager of the engineering division, responsible for system testing, jointing technology and ROV operation. As part of this role he was chairman of the UJ Consortium. He left Global Marine in 2005 to become an independent consultant, assisting system purchasers and owners in all aspects of system procurement, operations, maintenance and repair. Stewart’s interest in the history of submarine

cables began in 2000, when he project managed a celebration of the 150th anniversary of the submarine cable industry. As part of this project he co-authored and edited From Elektron to ‘e’ Commerce. Since then he has written and lectured extensively on the history of the submarine cable industry. From March 2009 to November 2015 he wrote Back Reflection articles for SubTel Forum. In 2013 he was invited to contribute the opening chapter to Submarine Cables: The Handbook of Law and Policy, which covered the early development of the submarine cable industry. To support the campaign to save Enderby House—a Grade II listed building— from demolition, in 2015 he wrote two books about the history of the Telcon site at Enderby Wharf on the Greenwich Peninsula in London. The f irst was The Story of Subsea Telecommunications and its Association with Enderby House, and the second was The Eponymous Enderby’s of Greenwich. His biography of Sir John Pender GCMG The Cable King was published by Amazon in April 2018. Footnote The authors would like to take this opportunity to thank James Stuart-Wortley’s great-great-granddaughter, Caroline Oldridge, for making available to us this unique collection of correspondence and allowing us to publish extracts from the text that relate to her ancestor. Because of this, over the last five issues of the Forum, we have been able to tell the story of this remarkable man and his significant contribution to the ultimate success of the Atlantic Telegraph. We think it is safe to say that his role in keeping the dream alive, after the 1858 failure, was as significant as that of the much-heralded Cyrus W Field, and his contribution has now been properly recorded. Caroline and her family were unaware of James Stuart-Wortley’s role in the founding of our industry, so we are pleased to report that having read our tale, they have decided to donate this collection to the Museum of Global Communications | PK Porthcurno Cornwall, where the documents will be available for future researchers to review.

MARCH 2021 | ISSUE 117

ON THE MOVE WFN Strategies welcomed the addition of industry veteran GREG OTTO as their new Offshore Energy Manager in mid-January. “Greg Otto is an outstanding addition to the WFN Strategies’ family, as he brings a deep blend of knowledge and experience to ensure we continue to offer our clients superior quality of service and value,” said Wayne Nielsen, Managing Director of WFN Strategies. “He will support the acquisition and management of various submarine cable projects for Oil & Gas and other offshore energy related clients.” BAI Communications announced the appointment of BRENDAN O’REILLY in January as the new Chief Technology Officer. “I’m delighted to be joining BAI in the early stages of executing its ambitious growth plans. This role offers me the opportunity to play a pivotal role in defining and implementing the technology strategy that will help BAI become a globally renowned provider of neutral host solutions to MNOs and municipalities. BAI’s engineering expertise, alongside its proven experience in delivering large scale connected infrastructure and networking solutions, positions it perfectly to lead the next phase of digital transformation that 5G is creating,” said Brendan.

SUBMARINE TELECOMS MAGAZINE

BAI Communications also brought ANDREW MCGRATH on to fill the open Global Chief Commercial Officer position at the beginning of March. McGrath will be responsible for leading the delivery of BAI’s global commercial strategy, focusing on enhancing the company’s go-to-market approach across all its markets. Discussing McGrath’s appointment, Group CEO, Igor Leprince, said: “We very much look forward to welcoming Andrew to the team. Andrew’s ability to identify new market opportunities and gain stakeholder support right across our broader industry, demonstrates a unique combination of relationship skills and commercial acumen. This, alongside his skill in advancing innovation, will make him a great asset to the BAI’s evolving business and transformative developments in the 5G and neutral host space.”

HAVE EXCITING EMPLOYMENT NEWS TO SHARE WITH THE INDUSTRY? LET US KNOW! EMAIL ON-THE-MOVE@SUBTELFORUM.COM

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FOR MEDIA & SPONSORSHIP INFORMATION VISIT: SUBTELFORUM.COM/ADVERTISING MARCH 2019 | ISSUE 104

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NEWS

CABLE FAULTS & MAINTENANCE Internet Resumes After Repairs To IA and APG Complete Outages Affect WIOCC Clients In Multiple African Countries Pakistan Experiencing Another Cable Fault

NOW Southern Cross NEXT will use Ciena GeoMesh Extreme Kumul Submarine Cable Network Nears Completion ASN Starts The Construction of Africa-1

Pakistan’s IMEWE Submarine Cable System Offline

STATE OF THE INDUSTRY

Sea-Me-We-5 to Undergo Repairs This Week

Orange Contracts Vard To Build New Cable Ship ‘Decarbonizing Global Cable’ Network Project Wins Grant

CONFERENCES & ASSOCIATIONS SubOptic Association Launches the SubOptic Foundation

CURRENT SYSTEMS Dialog Axiata Commissions Maldives Sri Lanka Cable APNG 2 Submarine Cable Decommissioned Can Argentina’s Big Fiber Plans Live Up To Reality? Telxius Leads Transatlantic With Dunant, Marea in Service

Hexatronic Signs Agreement With Vocus in Australia Nexans Opens New Cable Accessories Plant In Morocco China Enters the Arctic Digitization Race Hexatronic Wins Submarine Cable Orders Totalling Approximately 60 MSEK

SUBTEL FORUM Submarine Cable Almanac – Issue 37 Out Now!

Quintillion And GCI Announce Partnership

TECHNOLOGY & UPGRADES

Orange Announces Dunant Cable Ready for Service

NEC Delivers Submarine Cable Seismic And Tsunami Observation System

Accusations Against ALVAL/ORVAL Cable System

FSMTC Awards Contract to Xtera to Upgrade Hantru1

DATA CENTERS Vero Internet to Partner with Seaborn for PoPs in Brazil DE-CIX Exchanges Saw 32 Exabytes of Data Traffic Interxion To Deliver PEACE Submarine Cable Data Center

FUTURE SYSTEMS Telecom Egypt Plans Launching HARP Submarine Cable APTelecom and Bulk Fiber Networks Partner On HAVFRUE Cable New Subsea Cable Announced Between Florida and Cancun, Mexico Ocean Networks Inc. Launches Caribbean Express Project Telecom Namibia and Paratus Secure Equiano Branch New Caledonia Cable Moving Forward After Court Case Possible New Submarine Cable From Casablanca to Lomé

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ADVERTISER CORNER Dear Readers, Greetings! My name is Terri Jones, and I am the Sales Manager for SubTel Forum ... and I invite you to use this link to register, and join the growing family! We welcome: Your participation, Your support, Your feedback, and, Your articles! And we will continue to provide premier publications for you to sponsor and reach your clients, future clients, vendors, and peers to keep them updated on your unique brand. The submarine telecoms industry is strong, viable, and growing! Below is a brief recap of upcoming opportunities and all include additional online promotion. Thank you for taking the time to review, and your consideration. Please reach out with any questions or suggestions. And, once again, a very special thanks to our current and future sponsors. Let’s keep our industry thriving! STF

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FORUM ISSUE 118 | MAY 2021

Terri Jones, Sales Manager, SubTel Forum tjones@subtelforum.com TERRI JONES is Sales Manager for Submarine Telecoms Forum, Inc. For over 20 years, she was in the business of buying… media that is. Terri was managing million dollar buys with a variety of advertising agencies, such as Media Reactions and Time Life, buying time on radio and television for client advertising. She first joined SubTel Forum in 2018 to support sales of the SubOptic 2019 Conference in New Orleans , which was managed by STF Events. Since then, she has been responsible for sales in all of the SubTel Forum products and publications such as the Magazine, Submarine Cable Almanac, Cable Map and Industry Report.

SUBMARINE TELECOMS FORUM MAGAZINE Over 100,000 downloads per bi-monthly issue. Two months exposure. Rates start as low at $1,750.

ISSUE THEMES:

GLOBAL CAPACITY

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January: Global Outlook March: Finance & Legal May: Global Capacity July: Regional Systems September: Offshore Energy November: Data Centers & New Technology

SPONSORSHIP BENEFITS:

• Complimentary tile web banner (visible on SubTel Forum Newsfeed) • 30 second promotional video (FullPage and Two- Page Spread only) • Social media acknowledgment (LinkedIn, Facebook & Twitter) • Acknowledgment in announcement Press Release and mailer

MARCH 2021 | ISSUE 117

ADVERTISER CORNER SUBTEL FORUM INDUSTRY REPORT Over 560,000 downloads per annual issue. One- year exposure Yearly cost: $3,750

SPONSORSHIP BENEFITS:

1. Advertisement viewable throughout one section of the industry report – either a static image or looping video 2. Complimentary tile web banner (visible on SubTel Forum Newsfeed)

• Social media acknowledgment (LinkedIn, Facebook & Twitter) • Acknowledgment in announcement Press Release and mailer New this year: Sponsors can now lock into a specific category! Let me know which category you would like, so I can lock you in for 2021.

SUBTEL FORUM ALMANAC Over 525,000 downloads per quarterly issue. Three months exposure. Quarterly cost: $5,000

SPONSORSHIP BENEFITS:

• Exclusive sponsor of next issue • Logo and link on cover and acknowledgment on publication webpage • Single page ad (8.5 x 11) near front of document

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• 30 second promotional video • Complimentary tile web banner (visible on SubTel Forum Newsfeed) • Social media acknowledgment (LinkedIn, Facebook & Twitter) • Acknowledgment in announcement Press Release and mailer

SUBTEL FORUM ONLINE CABLE MAP We are pleased to announce our newest opportunity for Sponsors: If you haven’t had the chance, use this link to the Online Cable Map to explore our many layers. Monthly rate: $1,800

SPONSORSHIP BENEFITS:

• One month sponsorship of the layer of your choice (details below) • Logo/Link on every level your layer • Complimentary tile web banner (visible on SubTel Forum Newsfeed) • Social media acknowledgment (LinkedIn, Facebook & Twitter) • Acknowledgment in announcement Press Release

SPONSORSHIP LAYER OPTIONS/ DESCRIPTIONS:

• In- Service Cables – details of more than 450 cable systems, updated biweekly • Planned Cables – more than 50 cable systems, updated biweekly

• Cableships – location and status of more than 45 cableships accomplishing both cable installation and repair activities, updated every 6 hours • Data Centers – more than 1,700 data centers; grouped by company owners, updated quarterly

• Offshore Facilities – representing more than 40 offshore O&G facilities, both planned and in- service, updated biweekly

SUBTEL FORUM PRINT CABLE MAP And, last, but certainly not least: This beautiful, large format print map showcases every major international submarine cable system, and we are proud to say, hangs in many offices in our industry. Order now to secure your spot for 2022! Yearly logo cost: $3,750

SPONSORSHIP BENEFITS:

Complimentary tile web banner (visible on SubTel Forum Newsfeed) Social media acknowledgment (LinkedIn, Facebook & Twitter) Acknowledgment in announcement Press Release and mailer MARCH 2021 | ISSUE 117

SubTel Forum Magazine #117 - Finance & Legal

Articles inside

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