A Cable Owners
Perspective on
SMART Cables
April 2016
Confidential and proprietary materials for authorized Verizon personnel and outside agencies only.
Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.
Our Priorities
1. Customer Experience (connectivity and resilience)
2. Shareholder Value (operating a profitable business)
3. Sustainability (being corporately and environmentally
responsible)
2
Are SMART cables complementary to our
goals?
Despite not being part of
our core telecoms
business
SMART
cables
Improved
Sustainability
More
Diversity
More
Investment
More
Connectivity
3
Cables and Science
•
Recovered cables came back
with organisms from depths
(>500 fathoms) that during laying
& repairs of first trans-Atlantic
cable, depths some scientists
thought were too inhospitable to
support life.
•
To settle this fundamental issue,
the HMS Challenger was
commissioned to undertake the
first global ocean survey and
determine the best cable routes
in 1872-1876.
•
A major finding is that life
occurred at most ocean depths.
Hazard Study in Taiwan, China – collaboration of science and industry
,
 Research group led by
 Peter Talling (UK)
 James Liu (Taiwan, China)
 Lionel Carter (ICPC and NZ)
 Assessing hazard risk in the Strait of
Luzon.
 Improved knowledge of the deep
ocean
 Recognition of earthquake, typhoon
and giant waves as triggers of
submarine landslides and turbidity
currents.
 Five papers in peer reviewed
international journals 2006-2015.
Cables Ideal for Science
Updated Monday 27 April 2015
The first and largest of a new generation of oceanographic observatory, in this case
the NEPTUNE system located across the Canadian continental margin and adjacent
abyssal ocean floor off western Vancouver Island. Source,
http://www.oceannetworks.ca/
Cables and Science
98% of all international voice, data, video,
and internet traffic is on submarine cables
 The approximately 265 independent, fiber-optic submarine cable
systems form the world’s undersea submarine cable networks. With
the laying of fiber-optic cables along the east coast of Africa in 20092010, the last major group of States now has access to these globally
linked systems.
 Each day the Society for Worldwide Interbank Financial
Telecommunications (SWIFT) transmits about 15 million messages to
more than 8300 banking organizations, securities intuitions, and
corporate customers in 208 countries. The United States Clearing
House for Interbank Payment System (CHIPS) process over USD 1
Trillion per day to more than 22 countries for all manner of commodity
exchanges, investments, and securities. Industries such as shipping,
airlines, supply chain, and manufacturing are all enmeshed in the
global economy through submarine cables.
“When the communication [cable] networks go down,
the financial sector does not grind to a halt, it snaps
to a halt.” Malphrus, Board of Governors of the Federal Reserve, 3-5 May 2010.
Seven facts policy makers need to know:
 There is no single global submarine network any more than there is a single
world airline network (about 265 systems = 1,576,481KM).
 Cable systems are generally owned by consortia of 4-30 private companies or
on occasion a single company-99% are non-government owned. Cable systems
are not “flagged” to any one State.
 Cable repair is organized regionally by private contract-not by government
mandate. Contracts require repair ships to sail within 24 hours; GOAL = FAST
RESPONSE.
 There are about 59 cable ships in the world, about half are on stand-by and half
laying new cables or other tasks(training, maintenance)
 Cable ships are expensive, custom built, conspicuous, require specialized
crews, and fly diverse flags (UK, France, Marshall Islands, Singapore, Japan,
China, Korea, UAE, Indonesia)=COMPETITIVE RATES + EFFICIENCY
 Cable repairs are urgent not only to restore service, but because each cable
acts as the backup for other cables=RESILIENCY
 Cables have a neutral to benign environmental footprint on the seabed
Submarine Cables Carry over 98% of the
world’s international voice, video, and
data
United Nations Convention on the Law
of the Sea (1982)

The preamble of UNCLOS state, in part:


Recognizing the desirability of establishing through this Convention, with due regard
to the sovereignty of all States, a legal order for the seas and oceans which will
facilitate international communication…
The official position of the UN on this issue:

“Beyond the outer limits of the 12NM territorial sea, the coastal State may not (and
should not) impede the laying or maintenance of cables, even though the
delineation of the course for laying of pipelines [not cables] on the continental shelf
is subject to its consent”

Response to Question #7, Frequently Asked Questions at UN website:
www.un.org/Depts/los/LEGISLATIONANDTREATIES/frequently_asked_questions.ht
m
UNCLOS provides the historically proven international legal regime that has allowed the
submarine cables to flourish and benefit all States. (NOTE-IF IT IS NOT BROKEN,
DON’T FIX IT)
Submarine Cables Future?
 Bright, providing UNCLOS provisions* on submarine cables remain.
 Socio-economic benefit examples? Will change face of education
allowing universities to offer courses worldwide. Underpin global
monitoring of the marine environment for change, hazards and
knowledge.
 Cradle to grave carbon footprint of an international cable system is about
7 grams of carbon dioxide equivalents for every 10,000 gigabit kilometer.
 Compare to a 2 day video conference NY to Stockholm (5.7 kg of CO2)
with an equivalent 2 day face to face meeting (1920 kg CO2)
 3-D printing will reduce the amount of aircraft flights and shipping
voyages-and their carbon input into the atmosphere/ocean, but the
blueprints, software, payments that will allow this new process to work
will depend upon cables
*Articles 21, 51, 58, 79, 87, 112-115 and 297
The Dual Use Cable (Telecom and
Marine Scientific Research (MSR)
 The Engineering Issues
 The Science Issues
 The Business Case Issues
 The Legal Issues
The Engineering Issues
 Submarine Cables are extensively test and engineered for a 25 year
undisturbed service life, but may be out of service in 15 years for
commercial reasons.
 Manufacturer warranty for optical amplifiers (repeaters) = 25 years
 Some manufacturers have expressed interest in SMART cables
(Alcatel-Lucent Submarine Systems, Huawei, Xtera & TE Subcom)
 But Japan has decided no dual use cables.
 Need prototype funding and ocean testing before any telecom
company would even consider risking a major investment.
 New players in the cable business (Google, Microsoft, Facebook),
but no evidence that fundamental ocean engineering practices that
have proven themselves over time will not be followed.
The Science Issues
 Lack of agreement on what data should be collected (Every scientist
has a vision = no consensus)
 Pressure, temperature, salinity may be considered as militarily
sensitive.
 Scientists want to be able to change out sensors over 25 year period,
but telecom interests want the cable undisturbed = no updates in
sensors (sit and forget).
 Tethering sensors to amplifier raises cost of manufacture and
installation.
 Cable coverage worldwide is not uniform, but follows great circle
based routes between major population centers, and this leaves
major gaps in coverage. Based on history and risk analysis,
materially expanded coverage unlikely.
The Business Issues
 Who pays for the up-front costs of the science component of a
dual use cable (manufacturing, testing, & Installation)?
 Who pays for the O&M maintenance component of the science
use over 25 years (cable repair ship, spares, contracts) ?
 Telecom companies do not see ocean monitoring science as a
core business function.
 What happens if the science component fails but the telecom
system is not affected-will the cable be repaired and who pays for
it?
 How will the science co-owners take part in the Construction &
Maintenance contract and system governance?
 What about the decision on retiring the cable system or upgrading
it?
The Legal Issues
 International telecom cables enjoy special protection under the
UNCLOS
 10 articles govern cables in territorial seas, EEZ, Continental Shelf,
and high seas
 The freedom to lay and maintain international cables does not allow
Maritime Scientific Research (MSR).
 If the cable is used for MSR, then MSR legal regime under UNCLOS
may apply to the entire cable (at the discretion of the states involved).
 UNCLOS MSR legal regime requires coastal State (and land locked
States) consent in the EEZ and continental shelf; this could make
laying a dual-use cable impracticable because the permitting risks
and costs multiply.
 Publication of data removes the marine cable route survey from the
freedom to lay cables into MSR regime. Besides increased regulatory
burden, competitors may gain unfair advantage.
The Regulatory Issues
 Having sensors on submarine cables should not be imposed upon
system owners and investors (especially by a non-industry body)
 Standards should not be mandated for sensors to become an integral
part of undersea telecommunications cables (due specifically to the
change in legal status under UNCLOS)
Thank you.