Statistics
ISSN No. 1948-3031
PUBLISHER: Wayne Nielsen
MANAGING EDITOR: Kevin G. Summers
CONTRIBUTING WRITERS: Stewart Ash, Kent Bressie, Dr. Paul Davison, Madeleine Findley, Jim Lemberg, Andrew D. Lipman, Yoani Sanchez
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 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.
Contributions are welcomed. Please forward to the Managing Editor at editor@subtelforum.com.
Submarine Telecoms Forum, Inc. 21495 Ridgetop Circle, Suite 201 Sterling, Virginia 20166, USA subtelforum.com
Copyright © 2013 Submarine Telecoms Forum, Inc.
Welcome to our Finance & Legal edition of Submarine Telecoms Forum!
Kristian came in my office midafternoon Thursday with an urgent message. Five minutes from now a guy named “Sam” was going to call me. And true to his word the phone rang and what started was a short, yet interesting conversation.
This guy Sam tells me that he was the owner of what was a barge business that had been wiped out by Hurricane Sandy. His vessel had come loose, hit a pipeline, and the excavator had fallen sideways on some submarine cable. He wasn’t sure who owned the cable, and he was looking for a point of contact at a cable company with which to talk; he had lost all his contact information in the storm. So I dug up an old, trusted contact who I knew would steer him to the right guy within the organization, then did the same with another company contact for good measure. And that was that.
I know the contacts I steered him to will point him in the right direction; it’s what they do.
It dawned on me later how devastated this guy must feel. We have our laptops and servers and such; but if a proper Midwestern tornado came through my town in Virginia and wiped out everything, how would or could we put it all back together. Living on the Potomac I regularly watch during the year as the bottom floodplain is enveloped with the rising river bloated from the Shenandoah River or Blue Ridge Mountains’ run-off to the west.
It is an imperfect world with daily challenges – some anticipated and expected, and some not. I backed up my laptop last night. I hope it works out for Sam.
In This Issue...
News Now
Capacity Agreement Reached for High-Speed Data Connectivity on the New-Build Submarine Cable System “Emerald Express” Branch to Iceland
Alcatel-Lucent Appoints Michel Combes as CEO
Alcatel-Lucent confirms Ben Verwaayen to step down from his CEO position
Alcatel-Lucent upgrades cable system linking Japan and California
America Movil Promises World Arctic Fibre Extends Network To Northwest Alaskan Communities
Bell Labs Lays the Foundations for the Future of Optical Communications
Cahaya Malaysia: TM Consortium aims to land subsea cable spur on Sunshine Coast
Coresite To Develop Expansive, High-Performance Data Center In Secaucus, New Jersey To Meet Growing Demand
Cross River Fiber Completes Ultra-Low Latency Route Between Weehawken and Secaucus, New Jersey
Cuba’s Submarine Cable Is Finally Activated
Emerald Networks Announces Execution of Landing Party Agreement with AT&T
Emerald Networks Obtains Preliminary Commitment (PPL) from US Ex-IM Bank to Finance Emerald Express Construction of New-Build System
Farice Boosts Submarine and Terrestrial Connectivity for Iceland FCC Adopts New International Reporting
France Telecom-Orange and Alcatel-Lucent deploy world General Cable Reports Fourth Quarter Results
Hibernia Networks To Provide 100 Gigabits Of Diverse Capacity For Major NTT Communications
Huawei Marine Announce Commercial Availability of 2nd generation Repeater and Branching Unit
KDDI Selects Infinera DTN-X with Instant Bandwidth for 100G Network
MedNautilus, TI Sparkle Group New Trans-Tasman
Submarine Cable Proposed
New TTD Cable to Up-skill SA
New Undersea Cable Connecting Cape Town To Mtunzini Planned
NIST Requests Information for Cybersecurity Framework: Industry Has Significant Opportunity to Influence Regulatory Process
Pacnet Announces 100 gigabit Pacnet Boosts Content
Delivery Capabilities in China
Sea Fibre Networks Expand C-Fibre Solution to Frankfurt
SEACOM Upgrades Submarine Network Capacity To Turbo-Boost African Internet
SMD Deliver an HD3 Plough Ahead of Schedule to Reef Subsea
Submarine Cable Under Private Initiatives
SubOptic 2013 - Come and Hear Our Keynote Speakers!
SubOptic 2013 Masterclass Tutorial Programme!
SubOptic Hosts Sunday Morning Submarine Session
SubPartners Cable Lures Backers
Tata Communications Brings 100G Connectivity to Carriers and Enterprises Across the US and Europe Using Ciena
TE SubCom Announces the Completion of an Upgrade to Trans-Pacific Express Cable System
TE Subcom Commences Production Of Chevron Big Foot Undersea Network
TE Subcom Demonstrated 100GB/S Upgrade Capability On Transatlantic Submarine Cable System Constructed In 2001
The Lebanese Ministry Of Telecommunications And Cyta Will Jointly Provide A Telecommunications Bridge Between Lebanon And Europe Via Cyprus
Xtera Announces 100G Technology for Long-Haul Subsea Cable Systems
Xtera Announces New OTN Switch for Efficient and Resilient 100G and Beyond 100G Optical Networking
The Undersea Cable Report 2013
From Terabit Consulting
The most diligent quantitative and qualitative analysis of the undersea cable market - 1,600 pages of data, intelligence, and forecasts that can be found nowhere else.
Terabit Consulting analysts led by Director of International Research Michael Ruddy tell you what’s real and what’s not, where we’ve been and where we’re headed.
The Undersea Cable Report capitalizes on Terabit Consulting’s global on-site experience working with carriers, cable operators, financiers, and governments in over 70 countries on dozens of leading projects (e.g. AJC, BRICS, EASSy, Hibernia, SEAS, TBI)a world of experience, at your fingertips in a single resource!
YOUR KEY TO UNDERSTANDING AND HARNESSING THE $20 BILLION UNDERSEA MARKET OPPORTUNITY
perspective
expertise
For Undersea Cable Industry
Kent Bressie & madeleine Findley
For the past decade or so, the U.S. Government has escalated its oversight of infrastructure security and information security of undersea cable systems and services. It has designated undersea cables as critical infrastructure, imposed new requirements for initial licensing and mergers and acquisitions, required reporting of deployed equipment, software, outages, and restoration arrangements, and even tried to influence procurements of equipment and software. Most of these initiatives were ad hoc and specific to undersea cables. All of these measures increased the costs of doing business for operators and suppliers.
With news of cyberattacks increasingly making front-page headlines, and with many governments already moving to counter such attacks, the United States has now acted to adopt broad cybersecurity measures for U.S. communications infrastructure, including but not specific to undersea cables. These new measures will add to existing regulatory burdens and threaten to create new regulatory uncertainties and tensions in existing commercial relationships. These measures pose a particular risk to undersea cable operators, as neither
the undersea cable industry nor many of the agencies that regularly regulate undersea cables are identified expressly as stakeholders or decisionmakers for the development and implementation of those measures. In this article, we describe the U.S. Government’s recent cybersecurity initiatives, outline issues of concern for the undersea cable industry, and make some preliminary recommendations for enhancing cable protections while minimizing regulatory burdens.
1. Executive Order and Presidential Policy Directive
On February 12, 2013, U.S. President Barack Obama issued a broad Executive Order1 designed to enhance physical and cybersecurity protections for critical infrastructure. The President also issued a Presidential Policy Directive (“PPD”)2 to implement the
1. Executive Order No. 13,636, Improving Critical Infrastructure Cybersecurity, 78 Fed. Reg. 11,739 (Feb. 19, 2013).
2. Presidential Policy Directive/PPD-21, Critical Infrastructure Security and Resilience (Feb. 12, 2013), http://www.whitehouse.gov/the-press-office/2013/02/12/presidential-policy-directive-critical-infrastructure-security-and-resil.
WASHINGTON, DC - JANUARY
25: U.S. President Barack Obama addresses a Joint Session of Congress while delivering his State of the Union speech January 25, 2011 in Washington, DC. During his speech Obama was expected to focus on the U.S. economy and increasing education and infrastructure funding while proposing a three-year partial freeze of domestic programs and $78 billion in military spending cuts.
(Photo by Chip Somodevilla)
Executive Order. The PPD provides for increased coordination between government and industry regarding physical and cyber security, and resilience of critical infrastructure, noting, in particular, the vital role that communications networks play in such infrastructure. The Executive Order and PPD define “critical infrastructure” as “systems and assets, whether physical or virtual, so vital to the United States that the incapacity or destruction of such systems and assets
would have a debilitating impact on security, national economic security, national public health or safety, or any combination of those matters.” This definition clearly encompasses undersea cable systems, although neither the Executive Order nor the PPD references them specifically.
The Obama Administration has long contemplated issuing an Executive Order and PPD due to concerns about cyber risks and Congress’ inability to enact comprehensive cybersecurity legislation. This Executive Order and PPD create an initial cybersecurity framework, and U.S. regulatory agencies have begun the process of developing and implementing the framework’s objectives. The potential for Congressional action still exists and may be increased as a result of the Administration’s actions.
The Executive Order and PPD direct the Department of Homeland Security (“DHS”) and the National Institute for Standards and Technology (“NIST”) to, among other things:
• develop a “Cybersecurity Framework” to reduce risk to critical infrastructure; and
• create a voluntary, incentivesdriven cybersecurity program for critical infrastructure to share threat information with the U.S. Government.
The Executive Order and PPD provide little specific information about how DHS and NIST will fulfill their new obligations, or the degree to which they will consult with industry stakeholders in designing the Cybersecurity Framework or cybersecurity information-sharing program.
The Executive Order includes the following key provisions:
• create policies and procedures to increase information sharing about cyber threats;
• Information Sharing. The Executive Order directs federal government agencies to share unclassified reports of cyber threats with U.S. companies. It also requires DHS to provide classified government cyber threat and technical information to eligible critical infrastructure companies.
• Framework
to Reduce Cyber Risk to Critical Infrastructure
.
The Executive Order requires NIST to work with industry to develop a set of industry best practices (the “Cybersecurity Framework”) to reduce cyber risks to critical infrastructure. A preliminary version of the Cybersecurity Framework is due within 240 days of the Executive Order and a final version within one year.
• Regulatory Review. The Executive Order directs federal agencies to review their regulations and propose new authority as needed to address current and projected cyber risks to critical infrastructure.
The PPD designates DHS as the sector-specific agency for the communications sector, subject to consultations with the FCC.
• Identifying Critical Infrastructure. Within 150 days, DHS must “identify critical infrastructure where a cybersecurity incident could reasonably result” in catastrophic consequences.
DHS must confidentially notify owners and operators of critical infrastructure that they appear on the list, and listed entities will have an opportunity to appeal their identification as high-risk critical infrastructure.
The PPD includes the following key provisions:
• DHS to Take Lead Role. As in the Executive Order, the PPD designates DHS as the primary authority in coordinating the federal government’s actions to improve the security of critical infrastructure. The PPD instructs DHS to establish and operate two national critical infrastructure centers—one for physical infrastructure and one for cyber infrastructure.
• Directives to FCC. The PPD instructs the FCC to identify communications infrastructure and communications-sector vulnerabilities and to work with industry to address those vulnerabilities. The PPD also instructs the FCC to work with industry to develop best practices to promote the security and resilience of critical communications-sector infrastructure. Because the FCC is an independent regulatory agency, however, the PPD is not binding on the FCC.
• Information Sharing. The PPD requires all levels of government and critical infrastructure owners and operators to timely exchange information on threats
and vulnerabilities, including information that allows for the development of a situational awareness capability during incidents.
2. Issues of Concern to the Undersea Cable Industry
The undersea cable industry should be concerned about a number of aspects of the regulatory program established by the Executive Order and PPD. These include:
• Mismatch Between Decisionmaking Responsibility and Expertise. The regulatory processes established by the Executive Order and PPD could result in inappropriate or overly burdensome regulation because regulatory responsibility for undersea cables is diffuse, and many of the agencies that play a role in regulating undersea cables have not been identified formally as decision-making agencies. The Executive Order and PPD identify DHS as the sector-specific agency responsible for developing and implementing the Cybersecurity
Framework and cybersecurity information-sharing program for the communications sector. The PPD directs the Federal Communications Commission (“FCC”)—the principal licensing agency for undersea cables landing in the United States pursuant to the Cable Landing License Act of 19213—to partner with DHS to the extent legally permitted. But the President and his Administration can only request but not require FCC action, as the FCC is answerable to the Congress as an “independent regulatory agency.” Even for Executive Branch agencies, however, the processes do not expressly include agencies such as: the U.S. Department of State (which coordinates Executive Branch input on cable landing license applications filed with the FCC and plays a key role in defending undersea cable treaty rights and freedoms from encroachment by other governments); the National Telecommunications and Information Administration; the U.S. Army Corps of Engineers (which authorizes
the installation of undersea cables in the navigable waters of the United States and in coastal estuaries pursuant to the Rivers and Harbors Act of 1899 and the Clean Water Act); and the U.S. Navy (which plays a key role in cable protection initiatives and works closely with the State Department in protecting treaty rights and freedoms). Most of these agencies are not even identified as stakeholders in the Executive Order or PPD. Even within DHS, the agency component most versed in undersea cable issues—the Office of Policy, which acts for DHS in the Team Telecom process—resides in a completely different part of DHS from the National Programs and Protection Directorate, which holds primary responsibility for cybersecurity matters.
• Absence of Liability Protections.
The cybersecurity informationsharing program contains no liability protection for industry. To obtain such protection, the Congress would need to pass legislation.
• Mandatory in All but Name.
Although the program is supposedly “voluntary,” the Executive Order requires agencies to report annually on which owners and operators are participating—a “name and shame” provision— and encourages agencies to devise incentives to encourage participation. In practice,
program participation will be all but mandatory.
• New
Requirements
for Sales to Government Customers. The Department of Defense (“DOD”) and the General Services Administration (“GSA”) must also recommend how to incorporate the program into federal procurement processes—
further underscoring the essentially mandatory nature of the program. Federal law already requires industry to provide cybersecurity information to GSA and DOD. The Executive Order, however, is likely to increase ongoing reporting obligations for federal contracts and to create new compliance risks. These requirements would apply to capacity sales to U.S. Government agencies, including the Defense Information Systems Agency.
• Disparate Burden on Infrastructure Owners. The Executive Order creates obligations regarding both physical and virtual or cyber infrastructure, but excludes from its scope “commercial information technology products or consumer information technology services.” As a result, the Executive Order clearly reaches physical network and infrastructure providers, but may not clearly reach edge, application, and overthe-top providers. Undersea cable owners and operators may find themselves subject to additional regulatory
compliance requirements that do not apply equally to customers or end-users, and for which they may be unable to recover costs. The Executive Order thus may complicate commercial arrangements between network or physical infrastructure providers and edge or overthe-top providers, and create ambiguity about cybersecurity obligations and accountability.
3. Initial Implementation Steps by NIST and DHS
NIST began preparing for implementation of the Executive Order and PPD long before the White House issued final versions of those documents, thereby underscoring the need for early industry engagement.
On February 12, 2013, NIST and DHS entered into a Memorandum of Agreement (“MOA”) that sets forth their collaboration plan for cybersecurity issues. Under the MOA, NIST agrees, among other things, to enable DHS participation in NIST-led engagements with industry. DHS agrees to consult with NIST on the metrics it intends to use to measure the effectiveness of cybersecurity programs.
On February 26, 2013, NIST published in the Federal Register a Request for Information (“RFI”)4 to stakeholders, including critical infrastructure owners and operators, asking them to share: (1) current cybersecurity risk management practices; (2) current use of existing cybersecurity standards and best practices; and (3) specific industry practices concerning, among other things, encryption and key management, asset identification and management, and security engineering practices. Stakeholders may submit responses to the RFI until April 8, 2013.
4. Congressional Initiatives
Congressional action on cybersecurity remains likely. In the immediate
4.
wake of the President’s action, Representatives Mike Rogers (R-Mich.) and Dutch Ruppersberger (D-Md.) reintroduced the Cyber Intelligence Sharing and Protection Act (“CISPA”), which passed the House but not the Senate in the last Congress. The House Permanent Select Committee on Intelligence held a hearing on the bill on February 14, 2013, and the Secretary of Homeland Security testified before a hearing of the Senate Committee on Homeland Security and Governmental Affairs on cybersecurity issues on March 7, 2013. Before passing any legislation, however, Congress must first resolve several key contentious
issues, including whether to mandate specific cybersecurity standards or provide liability protection to industry.
Representative Mike McCaul (R-Tex.), chairman of the House’s Homeland Security Committee, and Senator Tom Carper (D-Del.), chairman of the Senate’s top homeland security committee, have both expressed their intent to push for legislation in the coming months.5
5. Preliminary Recommendations for Industry Involvement
Given the risks and uncertainties of the http://online.wsj.com/article/ 662404578336862508763442.html; Rep. Michael McCaul, Feb. 12,
processes established by the Executive Order and PPD, we think it important for the undersea cable industry to take several actions. First, the industry should participate actively in the standards-development and other implementation proceedings already begun by various U.S. Government agencies, including the NIST RFI and stakeholder meetings. Second, it should continue to monitor and influence cybersecurity legislation. If possible, it should consider introducing other cable-protection elements in such legislation, including an increase in the statutory penalties for cable damage and a broader definition of cable damage. Third, it should engage proactively with U.S. Government agencies, the U.S. Congress, and other stakeholders to share information about existing industry cybersecurity efforts and the impact of proposals for new or additional compliance requirements. Fourth, it should take any and all opportunities to remind the U.S. Government and other stakeholders of the critical importance of undersea cable infrastructure and services to the U.S. economy and national security. Fifth, it should remind the U.S. Government and other stakeholders that infrastructure protection—and undersea cable
protection in particular—involves more than just malicious threats. In fact, other natural and human activities pose greater day-to-day risks to undersea cable infrastructure.
Given the number of entities involved and the timelines provided in the Executive Order, agencies likely will feel significant pressure to act quickly. The undersea cable industry should therefore plan to engage quickly and proactively with DHS, NIST, and the other key entities in order to ensure that the policies and procedures created
do not result in overly burdensome or costly reporting and compliance obligations. Its first opportunity is to participate in the NIST-led effort to develop a Cybersecurity Framework. Additionally, industry may benefit from engaging, either individually or as part of industry coalitions, with regulatory agencies, including DHS, the FCC, and others, and with legislative bodies, including the U.S. Congress, to share information about the cybersecurity efforts already underway and the impact of proposals for new or additional compliance requirements.
Kent Bressie is a partner with the law firm of Wiltshire & Grannis LLP in Washington, D.C., and heads its international practice. An expert on telecommunications regulation and international trade and investment, he has extensive experience with the range of legal and regulatory issues affecting undersea cables, including licensing and permitting; national and cyber security, export controls, and economic sanctions; transaction and investment reviews; market access; corporate and commercial transactions; and the law of the sea. He has represented undersea cable operators, suppliers, and investors in connection with projects on six continents.
Madeleine Findley is a partner with Wiltshire & Grannis LLP in Washington, D.C., and practices principally in the area of telecommunications law. She regularly advises undersea cable operators and suppliers on a wide variety of legal and regulatory issues arising from cross-border operations.
The Power of Submarine Information Transmission
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Current Legal Trends and Contract Issues For Data Center Development and Leasing
andrew D. Lipman
Aprominent feature in the ecosystem of the submarine cable world is the large scale data center. Data centers are frequently cited as one of the primary factors driving growth in submarine cables, not only in developed countries, but increasingly in developing countries in Asia, Latin America and Africa. Within the past several years, an increasing number of business plans and models for new submarine cable systems include interconnected data centers. Although data centers are increasingly integrating with submarine cables, many in the submarine cable industry are just now becoming familiar with the manner in which these facilities operate and the opportunities and challenges in running these buildings.
By way of brief background, data centers are buildings, or rooms within buildings, that are especially designed to house servers and other networking equipment in conjunction with the cabling and global connections needed for a modern IT network. Today’s data centers must have adequate primary and back-up power sources, high capacity heating, cooling, ventilation and humidity-control systems, access to the best telecommunications networks and sophisticated security systems.
Some of the data centers now being planned will be significantly larger than any that presently exist. Such facilities will bring new attention to energy consumption and other environmental issues. At present, at least in the US (as well as in most other countries), there are few Federal or state laws that impose special environmental
conditions on data centers. This article discusses where the prospect for regulatory action exists, and also suggests the issues that providers and users of data centers should consider when negotiating their own private contracts.
Regulations and Standards for Environmental and Utility Usage
In general, a data center is subject to no greater environmental regulation than any other large building. Development in some areas may involve National (or State, e.g., California) Environmental Quality Act review, air quality considerations and issues that arise from wetlands and endangered species. In addition, some
data centers built in urban areas have been cited by zoning officials after construction because their oversized air conditioning plants violated local noise ordinances. Other data centers have been treated like unwelcome neighbors in the cities where they are located due to their rooftop antennas or the fact that neighborhood activists might have preferred a building of that size be occupied by a business that generates more local jobs. For these
reasons, developers of data centers should be observant of environmental issues, aware of noise ordinances, and should anticipate the possibility of public opposition to their project in municipal council or planning board hearings if the facility requires a zoning variance or any other local approval. Such opposition may be addressable by a community relations initiative.
Data centers also often produce a significant amount of electronic and electrical equipment wastes, including the hazardous chemicals they contain (“e-waste”). At present there is no Federal mandate to recycle e-waste, although in the US, at least twenty states and the City of New York have enacted recycling laws. None of the existing laws impose recovery, fee or reporting obligations on data center providers, but e-waste issues are likely to receive more attention from the government in the future. If the US and other developed and developing countries follows Europe’s lead, responsibility for handling e-wastes will fall primarily on producers of electrical and electronic products. However, consumers ultimately bear the burden of recovery and disposal of electrical and electronic equipment if no producer is obligated to take it back. In
most cases, the consumer of equipment housed in a data center is the customer, rather than the owner of the center, but it is advisable for the parties to contractually assign the responsibility for recycling or disposing of e-waste.
Data center owners may be required to negotiate special interconnection agreements with electric utilities, and existing distribution lines may be insufficient for the demand. Individual interconnection agreements and special construction of distribution lines require, in most countries, the approval of Federal and local utility regulatory agencies, which will examine each transaction to ensure that the utility’s charges to the data center are not preferential or subsidized by other electric ratepayers. The potential for regulatory scrutiny of the transaction will complicate negotiations with the electric utility. If the data center undertakes to supply any of its own power by use of solar panels or cogeneration, or merely wants to install uninterruptible power sources, it is wise to consider the environmental issues, energy regulations ( in the US, Federal Energy Regulatory Commission (“FERC”)) and possible tax incentives. Self-supply rights are not legally unlimited, and FERC regulation
may, in certain circumstances, entail the data center becoming a “public utility” subject to Federal financial and corporate regulation.
Ideas for reducing power consumption and cooling requirements at data centers are generally addressed as cost-saving measures. However, the environmental benefits of such technologies are beginning to be recognized. Data centers are generally not subject to any mandatory social
responsibility standards, and there have been no known cases in which data centers have been opposed because of their carbon footprints. However, at least in the US, the U.S. Environmental Protection Agency (“EPA”) provides an energy performance scale by which data centers may voluntarily assess the energy efficiency of their facilities.
Data centers that score 75 or higher on EPA’s 1-100 scale are eligible to display an “Energy Star” logo, which may have commercial and public relations value. This trend is expanding globally.
Data Center Contract Issues/The Customer’s Viewpoint
Data center agreements vary widely in the reasonableness of their terms and the degree to which they address their customers’ important legal and operational issues. Some data center operators offer their customers standard agreements resembling the commercial leases that building owners and managers offer to tenants of ordinary office space, replete with terms and conditions that can lead to future difficulties.
Typical of the terms and conditions found in some data center agreements are clauses describing the equipment space with phrases like “as is,” “with
all faults” or similar words which agreements may also include significant hold-over penalties for continuing to occupy the space after expiration of the term, or may provide the data center provider with an unrestricted right to approve all transfers, assignments and changes of ownership by the customer, often combined with a provision that even an approved transfer does not release the transferor from liability for the transferee’s future defaults. Such provisions are common in commercial leases, but often do not meet the expectations of most data center customers, and many data center operators will typically agree to compromise or soften those terms. An increasing number of data centers are owned and operated by
telecommunications carriers, including submarine cable operators. Frequently, contracts drafted by the owners of these facilities contain clauses that require all or a significant portion of the customer’s backbone network services be provided by the data center operator or its affiliates. In addition, telecom carrier owners of data centers have a familiar practice of incorporating other documents into their contracts by reference, and all such extrinsic documents must be obtained and examined carefully by both parties. Many of the incorporated documents include terms and conditions that address problems that arise in the context of providing telecommunications service, but may be inappropriate for a data center
agreement. The customer should question the inclusion of inapplicable terms that impose additional risks or may lead to misunderstandings.
All data center agreements address the issue of termination, but very few of them contain sufficient language related to orderly disengagement at the end of the term. An adequate data center contract should provide that a customer who is not in default may continue to occupy the facility on a month-to-month basis without a holdover penalty and with continuation of all services for a period of at least ninety days, even after the initial term of the agreement expires.
Most data center customers look for clauses in the agreement that provide for service level commitments, which should be compared for competitiveness. Service levels should be backed by credits for failures in performance, but even the most liberal credits are seldom enough to compensate for a single failure that causes a network outage. More importantly, customers should look for contract terms in which the operator agrees to provide a stable physical environment, reasonable intervals
for installations, around-the-clock monitoring and adequate security.
Data Center Contract Issues/The Owner’s Viewpoint
Most data center agreements grant customers a licence to use space in a data center for a term of at least one year. Customers ordinarily expect some form of renewal option, and the
The customer’s right to use risers and common areas should generally be expressly stated as non-exclusive.
licence agreement should provide for routine adjustments to the fee schedule, at least upon each renewal. Electrical power usage is ordinarily capped at a specific capacity for a fixed rate, subject to periodic adjustment.
In the typical data center agreement, customers receive exclusive occupancy rights to a specific cage, cabinet or rack.
Customers should generally not be permitted to assign or sublicense their rights or obligations under a data center agreement, or authorize any third party to use data center space without the provider’s express written consent. Many customers have business plans that specifically anticipate sublicensing, so that issue should be addressed while the licence agreement is being negotiated. It is important to identify any affiliates of the customer or other third parties that are entitled to have access to the space, and clarify that the licensee retains all liability for rent, security breaches, property damage and the like. The customer frequently disclaims any real property interest under the data center agreement, together with any rights as a tenant under landlord/tenant laws, regulations or ordinances.
Customers move in and out of data centers on a regular basis, and their space requirements change over time. Accordingly, the provider must have the ability to “groom” the facility to maximize utilization of the space as
customers come and go. This requires the provider to have a right to relocate customers, in which case the customers whose facilities are moved should have the right to recover their reasonable costs, especially if such relocation occurs before expiration of a license term. The operator’s right to relocate customers is generally a major area of discussion in license negotiation. The act of operating a data center will not, in itself, generally subject the provider to conventional telecom
regulatory or common carrier telecom requirements. However, data center operators should be cautious in connection with providing electronic interconnections within the data center. Providing unlit cabling would not be considered a telecommunications service in the US and in most countries, but “lit” services, even over a short distance, could subject the provider to regulation as a common carrier in the US under federal and state laws, and possibly under various foreign telecom regulatory laws, as well.
Conclusion Although data centers are critical links and points of vulnerability in global communications and submarine cable networks, and while they are major consumers of electric power and emitters of heat and noise, they are essentially unregulated in the US and most other countries. However, it would not be surprising if the customers, owners and neighbors of data centers find creative ways to seek regulatory solutions to real and perceived commercial and real estate based problems. Meanwhile, it is advisable for data center owners and customers to avoid such regulation and to attempt to address the risks of their relationship by deliberative contract drafting and review. As illustrated above, disputes and misunderstandings can be prevented through a process of careful contract negotiation.
Mr. Lipman is a senior partner at the law firm of Bingham McCutchen, LLP and Chairman of its Telecommunications Media and Technology Practice Group.
Eating a Cable: Internet access Still Elusive
In Cuba
Yoani Sanchez
There is a popular expression in Cuba that is synonymous with difficulty and crisis. When you want to indicate that someone is doing badly economically, it is sufficient to say that he is "eating a cable." Street humor has identified the act of chewing and swallowing a bundle of wires with scarcity and material want. The parable has gained strength these days in reference to the fiber-optic cable installed between Cuba and Venezuela, which has yet to provide service to Cu-
ban clients despite reports that it is finally functioning.
In 2007, Cuba and Venezuela began working on installation of the Alba-1 submarine cable, named for the Spanish acronym of the Bolivarian Alternative for the Countries of Our America. At the cost of $70 million and after a series of delays, the cable touched ground in Santiago de Cuba in February 2011. However, the island continued to use satellite providers for what
little Internet service was available. In the two years since, government media has been silent about the cable, generating rumors of a possible failure due to mismanagement or the diversion of resources.
Three weeks ago, an expert at Renesys, a U.S. firm that analyzes Internet traffic, suggested in his blog that the Alba1 cable had started showing activity. At first, traffic was detectable in only one direction, but after several days he had
confirmed the sending and receiving of data. Doug Madory, a Renesys research engineer, said the Spanish company Telefónica SA had begun to direct Internet traffic to the government-owned Internet service provider ETECSA. Telefónica denied it was supplying routing services for the Alba-1, but confirmed that it was providing other services to ETECSA.
The expert said lower Internet latencies to Cuba could be evidence that the
island is using other sources of access in addition to the satellites. "While activation of the Alba-1 could be a good way to improve ETECSA's links to the Internet, Cuba will probably continue to be unable to provide a wide range of network access," Madory wrote on Renesys's website.
doubt by many analysts, who say that the rate includes users of the country's intranet, where no websites are available that dissent from the regime. Studies have ranked Cuba in last place in Latin America for international Internet connectivity with a rate of only 3 percent, but even that number seems optimistic.
In the two weeks since the first signs of cable activity, there has been no perceptible change in connectivity for users in work or educational centers. Nor, as far as can be proved, has the speed increased in the few Internet cafés that exist in Havana. With prices ranging between 5 and 10 euros (about US$7 to US$13) per hour, hotels continue to offer extremely slow connections to the Internet and many sites are blocked.
According to official statistics, 23 of every 100 inhabitants on the island have access to the Internet. That figure has been heavily criticized and put in
The same day the Alba-1 activity was reported, a young man who was waiting outside a crowded Internet café in Old Havana was surprised by the information provided by Renesys. "Now how will they explain why we have to pay so much for an hour of connection?" he asked. The various people waiting their turn for a computer concurred.
The independent journalist Frank Abel
Garcia, whose tweets under the handle @FrankAbelCuba are published only via text messages, was skeptical about the news. "I think there is no interest or political will on the part of the government for the people to have Internet access." In his estimation, if the cable was activated on a massive scale it could be a "strong blow to state propaganda. It would open the eyes of a lot of people in regards to what happens in the world and in our own country."
The official media, as usual, have been silent, and television programs continue to depict the Internet as a conglomerate of violence, pornography,
and false information. But many young people seem excited and anxious about the latest details on the cable that have appeared in the international press. Perhaps the great World Wide Web is closer than it appears.
Yoani Sánchez is a pioneer in the Cuban blogger community. Time magazine listed her as one of the world’s 100 most influential people in 2008. In 2009, she received a Maria Moors Cabot citation from Columbia University’s Graduate School of Journalism.
This article originally appeared on the Committee to Protect Journalists website
Cuban citizens waiting to use the Web stand outside an Internet café in Havana.
(AFP)
advancements of Plough Technology
Dr. Paul Davison
SMD telecommunications trenching and ploughing equipment has been developed to provide a suite of products suited to offshore wind and offshore power cable installation. The broad product range is applicable to different soil conditions and vessel requirements. The heavy-duty HD3 Plough shares all of the proven benefits of its MD3 predecessor (originally developed for telecoms) such as patented steering and multi-depth capability with its unique pivoted chassis. Optional water jetting is available to transform performance
in sands. The HD3 Plough also uses two methods of monitoring as-laid tension. Primary method is through precision load cells mounted within the cable trough and a secondary method is through load cells monitoring depressor push force as the cable is positioned in the bottom of the trench. This is important to ensure the cable is installed within its tension limits.
loading offers the operators the potential to de-couple lay and burial operations and to manage crossings and skips in an increasingly crowded seabed. Subsea un-load allows cable to be ejected and the lay vessel to surface lay cable ends close to the wind turbine. Subsea unload also allows the cable to be ejected in an emergency so the plough can be recovered without cable interference.
The ploughs are launched with the cable installed from the vessel, or use a cable grab to locate and load the power cable subsea. The plough is then towed by the mother vessel and creates a trench into which it depresses the product.
The HD3 plough has been developed allowing subsea loading of power cables pre-laid on the seabed and burial to an increased trench depth of 3.3m. Subsea
The HD3-300 was developed to work with export and interconnector cables up to 300mm in diameter with a depth rating of 3.3m, as a result the vehicle measures 15m in length and weighs 45Tonnes, close to double the weight of the MD3. This size of vehicle has a substantial footprint and therefore can only be operated from a large vessel. The HD3-200 plough has been developed as a more compact plough (35Te) where the product size is smaller. It is still capable of working with the vast majority of export and inter-array cables, without the requirement for such a large and therefore expensive vessel. With all the features of the larger plough, it can handle products
up to 200mm diameter and has a burial depth rating of 2m to 2.4m. The ploughs are controlled and powered by a SMD DVECS II PLC control system, housed in ergonomically designed 20ft containers or built into host vessels. This control system interfaces and monitors the sophisticated subsea surveillance equipment with full PC SCADA control. Surveillance systems include cameras, obstacle avoidance sonars, profiling sonars and multi-beam sonars allowing significant sensory
feedback for controlling the ploughing process. Ploughs have developed levels of complexity to handle conditions that stopped operations previously. Operating in dense sands, rocky outcrops, low visibility, handling of bundles, handling pre-laid product are all challenges that Smart Ploughs (MD3 & HD3) have met with advanced technology. Ploughing remains the most cost effective and secure burial method for long runs and further advances in plough share design and
cable handling for stiffer power cables, umbilical and other linear products continue to challenge our engineering team.
With over 40 years’ experience in subsea trenching and supplying in excess of 100 trenching assets worldwide, SMD look to continuously develop their range to meet the changing market demands.
Paul joined SMD in 1995 after completing an engineering doctorate at Bath University. Early career involved the design of subsea vehicles for the Oil & Gas markets, mainly ploughs & tracked trenching machines. This concentrated up to 2000 on installation and burial of submarine telecommunication cables, development of the Multi-Depth Cable Plough and introduction of jetting onto ploughs. Paul returned to SMD in 2001 to develop its Work Class ROV products, firstly in Cable Maintenance ROVs and latterly in Work Class ROVs. Paul managed delivery of multiple Work Class ROV projects to establish its place as the leading independent supplier of Work Class ROVs in the market. In 2009 Paul returned to lead SMD’s trenching business and is responsible for all towed and selfpropelled trenching equipment.
Sponsors awards For "Best Poster" & "Best Paper" at
Financing a Submarine Cable System
Jim Lemberg
Iam acquainted with the general manager of a service provider who tells an interesting tale: His company makes up about 1% of the parent corporation’s total revenues, but because his unit is high-tech, he sits on some senior groups within the corporation. He recently helped evaluate technologies for another unit’s project and subsequently participated in the analysis of that project’s likely cashflfow. His own professional assessment was that the project had equal chances of losing or making money. In his words, “Nobody can tell for sure which way certain trends will turn, and the models show that small changes in those trends have huge impacts on the cashflows. It’s basically a blind bet.” Some of his colleagues shared his views and opposed the project. Others, mostly within the group that “owned” the project, were convinced that the project would bring in a pile of cash and position the corporation as a forward-thinking leader within the marketplace.
We’ve all been there, in one way or another. Should we do the project? Should we stand pat? One group sees it as an opportunity for huge success. Another bunch is convinced nothing but disaster waits around the corner. And the judgments are rarely onehundred percent objective. The group that thinks the project is bound to succeed in a big way will have to hire 25 new staff if the project moves forward. The group that absolutely knows the project is doomed from Day 1 will become an after-thought in the larger company picture if the project is pursued.
So, how do some of the dynamics play out as the dollars and cents of submarine cable systems get studied? Who asks what kind of questions and why do they ask those questions? And how well do the risks of these projects get measured? Let’s roll up our sleeves and try to dig in for some answers.
I understand that you have a submarine cable project in mind and think that I can help assemble finance. Please tell me what you’re thinking. Why should I decide to help you out? What makes this a worthy effort? Well, with whom might I speak on your behalf? To whom might I present your project as deserving financial support?
financing, the mix of equity and debt financing, and the assessment of risk. Much more can and should be said about this subject, but time and space limit what we put our hands to at the moment.
Sources Of Financing
Before we actually get started on this quest, remember that, in most cases, we are not looking simply for tens of millions of dollars. We will most likely need hundreds of millions, and those funds may need to come from more than one source and arrive at different times in the project. So, we will very possibly need to assemble a team of folks to chase down this pot of gold, with each member having a network of professional and personal contacts to get us in the door of one or two particular funding sources.
This humble little article will only quickly visit three broad areas related to financing these large capital projects: sources of
The first pool of potential project investors is the world’s communications services providers. In point of fact, the service providers used to be the underlying owners and operators of submarine cable systems. Today, however, things have become a bit more… varied. To a significant extent, the ownership and operation of these systems has become a bit of a niche, in many cases at least one step removed from the true communications service provider. Having said that, we will want to at least explore the possibility of one or more service providers playing a leading part in your project.
The next obvious source is the commercial banks and financial institutions of the nations involved in your project. This includes both the countries in which your system will land and the countries that are home to the (potential) manufacturers of your infrastructure. In each case, those institutions likely have some vested interest in continued investment into their nation’s communications infrastructure. They may especially find themselves motivated to participate in an opportunity that holds the promise of bringing money into the national economy via the project’s manufacturer(s) and/or installer(s).
A third group of sources are various large commercial entities for whom communications infrastructure plays a strategic role. Some of these newer players anticipate a significant and growing requirement for robust networks to transport data literally around the world. Where such global entities previously expected traditional service providers to be the parties directly involved in submarine cable project development, these new entities possess a confidence and initiative that – when combined with mountains of cash – results in their eager entry to project participation. If you are fortunate enough to have targeted countries or regions into which they wish to gain or maintain strategic position, you could find yourself with a rich friend.
A fourth group exists that is sometimes overlooked or downplayed as far as participation in submarine cable system projects. Insurance companies and large investment groups have significant amounts of funds which they need to invest. The challenge with these players is that they might not have previously participated in a project such as yours. That is decreasingly the case, however, as such projects are becoming somewhat more widely known around the world. Having said that, you will have some interesting discussions with these funding sources about the various risks in your project (and which we will address in a moment).
moment when we talk about the mix of equity and debt financing. It’s enough for now to observe that any other project financial supporters will expect you to have made the first investment.
A fifth group of potential (actually, necessary) project investors is you and your partners. We’ll talk about this in a
Lastly, are you perhaps proposing to offer significant connectivity to a country or group of countries that have limited access to the outside world at present? Maybe you think the nation you propose to serve is well-positioned to take advantage of advanced communications technologies. Perhaps the country is widely perceived as needing advanced connectivity… so much so that even the World Bank might be willing to lend its strength to the effort. This is one possibility: political clout standing ready to support your very worthy project that promises to bring genuine opportunities for advancement to the countries in which it will land. Indeed, this has been a significant part of projects in recent years in both the African and Asia-Pacific parts of the world. Another recent European regional project that is not quite ready to create lots of public fanfare is reported to have obtained similar financing guarantees for 50% of its debt. These backstop provisions have at least two impacts on project financing: (i) bankers are significantly more willing to consider lending money under such conditions; (ii) the risk of nonpayment is significantly mitigated. Both are good for you! Although we are not going to talk about
it in detail, any potential investor (debt or equity) will expect you to have created a comprehensive business plan that at least includes:
• Market research about…
• Traffic demand
• Bandwidth available on existing infrastructure
• Other planned infrastructure
• Bandwidth pricing & trends
• The technologies your project will employ, including the project’s future expandability
• Rough order of magnitude costs to purchase, install & commission system
• Pro forma financial statements, including timing & type of investments required
• Management & staffing plan, including directly related previous experience
• Sales & marketing plan
• Network operating plan, including marine maintenance provisions
Equity & Debt
Before we go any further, let’s remind ourselves that some party is going to have to be the first to put cold hard cash into this adventure. And since it’s your idea, you are in the best position to appreciate its value and be Investor Number One. Subsequent investors will almost certainly expect you to have somehow put your skin into this game. And cash is considered the most valuable of skins.
You will possibly be tempted to substitute sweat-equity for cash. Depending upon how attractive potential investors will realistically see your project, you may decide to resist the easy path of sweat equity. If you have any uncertainty about how others will view your project, consider becoming its first equity investor. Form a legal entity, fund it with your own cash and pay yourself as you go about early project development activities. Most of this will be moving money from your left pocket to your right pocket. Depending upon specific conditions, some of your initial investment will likely not complete the journey from left to right pockets, but will instead end up in the government’s pocket via payroll taxes. As painful as that may be, consider it the cost of persuading subsequent investors to give your project a serious look.
If you choose to structure your initial project investment as debt, it will carry a similar message to that of an equity investment, but with less impact because it implies that you expect repayment from the project’s cashflows. On the other hand, the implicit message of equity is that you expect to get your money back, perhaps through dividends but more likely through a buyout (which in turn
implies a third party’s being able to clearly see value in the project).
As a result of having talked with system suppliers and having developed pro forma financials, you will know approximately how much funding the project will require and when those funds will be needed. You will also have some sense of how much debt service the project can support and when principal payments can be made. The sooner the debt can be repaid, the better both for the project’s cashflows and for the lender’s comfort. Having said that, an overly aggressive plan for debt repayment runs the risk of stressing the project’s cash position. Potential investors will want to see a realistic plan that maintains prudent cash reserves for unforeseeable developments.
If you plan to market equity investments into your project, you need to be prepared to answer the question of how the investor will recover his money. Although we mentioned dividends just a moment ago, very few investments truly pay dividends. Rather, financing people talk about exit strategies through which the initial investors receive their original cash plus some premium. You will need to tentatively
identify what kind of party might want to buy out the initial investors and at what approximate price.
The possible exception to the initial investor wanting to exit the project is the investor for whom the project provides some other reward. This generally comes in the form of access to bandwidth, either at a discount to prevailing market conditions or on an assured basis. In the former, the investor is likely an entity whose business operations require bandwidth and who has access to special pricing of some sort. To be clear, I am referring here to a special pricing schedule that is available to a general class of customers, typically the very first customers to have made commitments to purchase bandwidth on the system. Subsequent customers buy bandwidth from a price schedule that contains some premium reflecting the timing of the purchase commitment. With regard to a requirement for assured availability of bandwith, the investor is again an entity whose operations require the system’s capacity but this circumstance arises when bandwidth along the route in question is unusually difficult to obtain. This investor may consider it worth his money to hold an equity position in the project in order to guarantee access to the system’s bandwidth. At the end of the day, equity is understood to carry greater risk than debt. Your initial
investment as equity will make a stronger impression on subsequent investors than will an initial debt investment. On the other hand, the relatively safer debt investment will generate far less return than the riskier equity investment. Which lead us to…
Assessing Risk
When a financial manager considers whether or not to loan you money, he is really just renting you that money. Those dollars are a tool that you are going to use for some particular job, and you will eventually return them to their owner. While you use them, you must pay rent. Financial folks call that rent either interest or return, depending upon whether the arrangement is one of debt or equity.
One of the major underlying factors that determines how much interest will charged or return will be expected is called “risk.”
The average person will agree with that, thinking that a given project has perhaps
low, moderate or high risk. Ah, yes. Financial folks look a bit more closely than simply a generalized, overall description like that. All sorts of different risks are identified and assessed. If really turned loose, a financial manager could probably produce hundreds of pages of analysis on the various risks in your project. You would be amazed at how risky your simple little project actually is!
One of the principles involved in assessing a project’s risk is that the greatest risks tend to exist in its very early stages. Another way of describing risk is to call it the possibility of bad things happening. It stands to reason that when there are a lot of things yet to be accomplished in a project, there is a pretty fair chance of something going wrong along the way. We might not be able to accurately predict what that will be or when it might happen, but we can say that there is a chance of some deviation from the plan. So, the earliest investors in a project, whether the investment is equity or debt, can reasonably be seen as exposing themselves to the greatest risks. Thus, the earliest debt or equity earns the highest interest or return.
If risk if significantly impacted by uncertainty, doesn’t it make sense that you should be able to reduce your project’s risk by reducing some of its uncertainties? Do your homework! Make realistic assessments of how much demand exists
for bandwidth along your system’s routes. Hire people with demonstrated experience. Do business with system suppliers who can be relied upon to deliver the technology and deliver it on time. And, be prepared to communicate this in a believable manner to potential system investors.
Three fairly specific risks exist for submarine cable systems that deserve just a bit of attention. These are risks that come into play for almost all such projects, but can be successfully mitigated by competent practitioners in the field. We will not deal with them in any particular order. All are important.
Presales
There is a very holy word in the world of these projects… p r e s a l e s. Pronounce that very slowly, with special reverence. However, there are presales and there are PRESALES. At least three significant factors are involved in determining the value of any given presale. First, is the firmness of the buyer’s commitment to actually purchase the bandwidth. Has a contractual obligation been created, or has a nonbinding statement of intention been made? Second, is the buyer a well-known carrier / bandwidth user or a lesser known party? Third, how much of the system’s initial bandwidth has been taken up through presales and how do the resulting revenues play out in your pro forma financials?
My wife and I once sold a house to a young couple. The parents on each side had given them money with which to buy their first home together. You’ve heard of “earnest money”? Maybe a few thousand dollars. Well, these folks gave the entire purchase price as their earnest money. They wanted the place! Presales are a lot like earnest money. Higher numbers make the deal much easier to do.
given system. Unless your project spans very short distances, the project engineers will design the system around fibers with very specific, tightly defined optical characteristics. Further, the fibers along any given portion of the system will be closely matched within the bounds of the defined characteristics. This all means that your system supplier will be very careful about fiber selection… and the desired fibers may or may not be readily available in the desired quantities within the desired timeframes. Uncertainty about adequate availability may exist. If it does, it gets translated into financial risk.
Manufacturing & Installation Capacity
Some risk will exist with regard to the availability of manufacturing & installation capacity within the broad submarine cable industry when your project is ready to be built & deployed. Your system’s technology will be comprised of three broad components, two of which have underlying limitations in their availability, fiber and cable.
From time to time, suppliers find themselves challenged to obtain the precise quantities & types of fiber they need for a
A finite number of cable factories exist throughout the world. Your selection of a system supplier may be partly driven by availability of cable manufacturing capacity within the timeframe in which you wish to undertake your project. That may in turn affect the price you pay to your selected supplier. If your system requires a fair amount of cable, the cable factory in which it is manufactured may experience any of several possible operational upsets. This area of difficult to predict uncertainties also gets translated into financial risk.
There also are a finite number of cableships throughout the world, and the limitations may become even tighter in the region of the world in which your system will be deployed. Weather conditions are related to but distinct from the availability
of cableships. These uncertainties are translated into financial risk.
Permitting
Significant delays in project execution sometimes arise during the permitting process. This is a risk component that you will be well-advised to address (and resolve) as early as possible. While most nations present few obstacles to obtaining licenses giving a submarine cable system the telecommunications regulatory right to land on the nation’s shores, the local permitting issues are often a very different situation. Environmental concerns are frequently huge, requiring significant time and resource to be satisfactorily addressed. A given landing site may even need to be abandoned because of intractable resistance. To the extent you have addressed and resolved these uncertainties, you will reduce the amount of uncertainty that gets translated into financial risk.
Finally, the process of determining the amount of overall risk in a submarine cable system project is a somewhat subjective matter. Although specific numbers are used, the process is filled with opportunities to move those numbers in one direction or the other. Your interest as the system developer and owner is for the lowest possible risk to be assigned. On the other hand, the parties from whom you will “rent” your funding will wish to see those numbers float as high as can be reasonably achieved. Reduce your costs by doing your homework and showing how the various risks will be minimized!
Additional Considerations
I worked for a number of years on the supplier side of the submarine cable market. Suppliers exercised various ways in which to effectively make certain projects happen. I can remember more or less sponsoring what used to be called “data gathering meetings” where carriers met to talk through how much capacity each would take on a given project. Those days, of course, are long gone. Today suppliers still have specialists who know what it takes to obtain project financing of different sorts. They are there to help people like you. Some suppliers have roots, connections or even participations in the carrier side of the market (each of which has its own facile way of finding dollars). Depending upon specific market conditions, you may be able to find a
particular supplier very eager to have your business… an eagerness that translates to any of several financial advantages for you.
Let’s go back to the parties who actually use your system to transport bits of data from here to there. Some of those parties will be carriers with true needs to get certain amounts of data to specific places. Others will be entities operating global networks and having gaps in those networks that you might be able to fill. Some will be the carriers in the countries in which your system lands; they need to get their bits to other parts of the world, and they want carriers from other parts of the world to bring bits to their country. You may even be pleasantly surprised to find one of these players willing to exercise significant influence to bring other players to your project in order to give you the critical mass necessary to turn your promising idea into reality.
Conclusion
The friend that I mentioned at the beginning of the article reports that the project he viewed as of questionable merit is moving forward. The largest factor in the decision to pursue the project was a cashflow analysis that portrayed many millions of dollars pouring into the corporation. He remains skeptical about the project’s playing out as depicted in that analysis, but admits that his colleagues won over the board of directors by presenting a great
deal of detailed information in support of a favorable outcome.
Any number of people and companies stand to gain from your project’s moving forward to reality. It takes money to make that happen, and you can significantly increase your chances of getting that money and getting it at affordable “rents” by identifying the parties who will benefit from your project in various ways and winning them to your side. Find a way to demonstrate that you have already placed some skin in the game, that some of your resources are at risk and dependent on your successful execution of your project plan. Do your homework, use the resources that lie within your reach and lay solid foundations upon which to ensure your project’s success.
Jim Lemberg is General Manager of LMF Data Networks in Central Florida, a provider of metro Ethernet, dark fiber and Internet bandwidth solutions. He was previously vice president of a competitive local exchange carrier in Hawaii, and before that worked within the submarine cable system industry. He also supports a select clientele of submarine cable system operators through private consultations.
submarine telecoms INDUSTrY rEPOrT
where
it’s never been done before
Back reflection
by Stewart ash
Was the Atlantic Cable a Humbug?
We all love a good conspiracy theory don’t we? The magic bullet and the gunman on the grassy knoll; did NASA actually go to the moon; are there aliens at Area 51; these are just some that have captured the public’s imagination. They are by no means a modern phenomenon, the nineteenth century had its fair share and there was one concerning the first Atlantic Telegraph Cable.
The first message sent over the Atlantic cable was transmitted on 14th August 1858; it was from the directors of the Atlantic Telegraph Company and it read “Europe and America are united by telegraphic communication. Glory to God in the highest, on earth peace, goodwill towards men.” On the 16th August, messages were transmitted between President James Buchanan (1791-1868) and Queen Victoria (1819-1901). Among the 400 messages that were transmitted, perhaps the most important was one from London to Halifax, Nova Scotia, instructing the 62nd Regiment that it need not repatriate as
originally planned as the Indian Mutiny had been successfully put down. This saved the British Government some £50,000, a significant sum at that time.
As is well known, transmission over the cable became increasing difficult and by 20th October 1958, it had failed completely. At the time, the failure of the Atlantic Cable was blamed on the chief engineer of the Atlantic Telegraph Company; Dr Edward Orange Wildman Whitehouse (181690), because of his strategy of applying signals of increasing voltage to try and overcome the difficulties in transmission. Dr. Whitehouse, who was recruited to the position by Cyrus W Field (1819-92), was fired and later replaced by William Thomson (1824-1907).
The first indication the public had that there were problems with the cable was an article in the London Times, on 7th September 1858. The failure of the Atlantic Telegraph and the loss of its investors’ money had coincided with the failure of the Red Sea & Telegraph to India Company. Many investors had lost money on both projects
and were disgruntled. There was a public outcry, and newspapers on both sides of the Atlantic took up the story. Rumours began to circulate that the Atlantic Cable had been a hoax and a confidence trick perpetrated by the directors of the company. The conspiracy theorists were gathering.
On 3rd February 1859, the Boston Courier published, under the headline “Was the Atlantic Cable a Humbug” a letter to its editor, dated 17th January 1859, from someone identified only as “Observer” of Boston. In the letter, Observer” sets out the financial incentives to officers of the company, in particular Dr Whitehouse, he then cites statements from Lieutenant Francis Higginson Royal Navy, who was in dispute with the Atlantic Telegraph Company, about the cable being broken and never repaired. He then quotes an opinion given to the directors of the Atlantic Telegraph Company by Cromwell Fleetwood Varley (1828-83) concerning the location of the fault. From this he concludes that the cable had been laid
between Ireland and Newfoundland, but that it had never actually worked. Furthermore, he states that the directors had determined to lay the cable whether it worked or not and had made plans that, in the event of it not working, such messages that had supposedly been sent over the cable, could either be sent in other ways or be pre-planned, in order to fool the public. He then goes on to cite some significant news items of the time; the collision between the Arabia and the Europa off of Cape Race; the Queens message to President Buchanan; the announcement of a peace treaty between China, England & France and the break-up of the Gwalior Insurgent Army in India. For each of these major stories he argues that information was received in the USA by other means than over the cable.
Shortly after (date unknown) the letter from Observe was published, the Boston Courier published repudiation, from “Vindex”. In this article, Vindex puts counter arguments to Observer’s claims and as a final proof cites the death of Mr James Eddy (18181858), General Superintendent of the American Telegraph Company. This occurred in Burlington Vermont on 23rd August 1858 and was reported in The Times in London on 25th August.
A letter to the editor of the Boston Courier from someone identified only as “A passenger on the Arabia”, arguing that the news of the collision with the Europa must have been sent over the cable to England, was published by Boston Courier 4th February 1859. This letter preceded the
Vindex repudiation. A rebuttal from “Observer” written on 9th February was published in the Boston Courier on 10th February 1859.
It appears that this was the end of the story for the Boston Courier and neither, Observe, Vindex nor the Passenger on the Arabia” corresponded with the editor again. However, the controversy continued for some time in other newspapers that reprinted the Boston Courier’s original articles, adding their own commentary from both editors and readers.
Who were Observer, Passenger and Vindex? What was their motivation?
Were they investors that had lost money, concerned members of the public, or could they have been in the pay of the Atlantic Telegraph Company or its dissenters? Was this an early example of the art of Spin Doctoring? The debate about the first Atlantic Telegraph was final put to bed when the joint committee of the British Government and the Atlantic Telegraph Company published the results of its enquiry in 1861 (Subtel Forum Issue 43). The report contained a complete transcript of all the messages sent over the cable, these were itemised on a day-by-day basis, thus confirming that the information contained in them could have crossed the Atlantic in no other way than through transmission over the cable.
Over the years I, like many before me, have seen references to the Boston Courier and Humbug in publications about the history of our industry. I have always taken them for granted and even transferred them to my own writings. It wasn’t until I was asked to cite my source for the statement “Was the Atlantic Cable a Humbug” that I started to try and track down its true history. I have to admit I struggled, but in a moment of pure inspiration I contacted Bill Burns and somehow managed to fire his interest. Thanks to his efforts and those of Bill Glover, the full transcript of these articles can now be discovered at http://atlantic-cable.com/ Article/1859Humbug/index.htm
My personal thanks to Bill2 without whom, this month’s article would not have been possible.
Conferences
SubOptic 2013
22-25 April 2013
Paris, France
Website
ICPC
21-23 May 2013
Miami, USA
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Submarine Networks Africa
27-30 May 2013
Johannesburg, South Africa
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Submarine Networks World 10-12 September 2013
Singapore
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Submarine Cable Forum
4-5 November 2013
Miami, USA
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Issue Themes:
January: Global Outlook
March: Finance & Legal
May: Subsea Capacity
July: Regional Systems
September: Offshore Energy
November: System Upgrades
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Kristian Nielsen
Tel: +1 (703) 444-0845
Email: knielsen@subtelforum.com
by Kevin G. Summers
Ihave a confession to make. I'm writing this in my overalls. Most of my work on SubTel Forum is actually done from my home office, about an hour outside of Washington, D.C. I live on a small farm where we raise hogs, turkeys, chickens and beef... a little bit of everything.
It's a good life, and thanks to submarine cables, I can have a confernce with an author in the UK or Japan or Israel without having to get on an airplane. I can also conference with my co-workers, who tell me that I'm looking more and more like a mountain man whenever I do stagger into the office. I don't dress in overalls when go to the office, but I also don't wear the wool suit. Unless I'm going to a wedding or a funeral, you pretty much won't catch me in a tie. You see the portrait of me on this page? That was taken in 2010 and I think it was the last time I wore the wool suit.
Regardless if you wear the wool suit or overalls, there are exciting things ahead coming from SubTel Forum. Our 2013 Industry Report is slated to be released in a few weeks, and there are three more editions of our popular Almanac coming this year. Finally, we are going to be reporting live from SubOptic through our STF Today portal.
Thanks for reading. Until next month...
SubOptic