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Pipe dreams - Tech giants are building their own undersea fibre-optic networks

2017-10-10 05:58:31

Google, Facebook and Microsoft want more control over the internet s basic

infrastructure

WHEN Cyrus Field, an American businessman, laid the first trans-Atlantic cable

in 1858, it was hailed as one of the great technological achievements of its

time and celebrated with bonfires, fireworks and 100-gun salutes. Alas, the

reason for the festivities soon went away. Within weeks the cable failed.

On September 21st the completion of another trans-Atlantic cable was welcomed

with much less ado. But it is remarkable nevertheless: dubbed Marea, Spanish

for tide , the 6,600km bundle of eight fibre-optic threads, roughly the size

of a garden hose, is the highest-capacity connection across the ocean.

Stretching from Virginia Beach, Virginia, to Bilbao, Spain, it is capable of

transferring 160 terabits of data every second, the equivalent of more than

5,000 high-resolution movies. It is jointly owned by Facebook and Microsoft.

Such ultra-fast fibre networks are needed to keep up with the torrent of data

flowing around the world. In 2016 traffic reached 3,544 terabits per second,

roughly double the figure in 2014, according to TeleGeography, a

market-research firm. And demand for international bandwidth is growing by 45%

annually. Much traffic still comes from internet users, but a large and growing

share is generated by big internet and cloud-computing companies syncing data

across their networks of data centres around the world.

These firms used to lease all of their bandwidth from carriers such as BT and

Level 3. But now they need so much network capacity that it makes more sense to

lay their own dedicated pipes, particularly on long routes between their data

centres. The Submarine Telecoms Forum, an industry body, reckons that 100,000km

of submarine cable was laid in 2016, up from just 16,000km in 2015.

TeleGeography predicts that a total of $9.2bn will be spent on such cable

projects between 2016 and 2018, five times as much as in the previous three

years.

Owning a private subsea fibre-optic network has several advantages, including

more bandwidth, lower costs, and reduced delay, or latency . Having access to

multiple cables on different routes also provides redundancy. If a cable is

severed by fishing nets, sharks, or an earthquake, among other things traffic

can be rerouted to another line. Most important, however, owning cables gives

companies greater say over how their data traffic is managed and how equipment

is upgraded. The motivation is not so much saving money. It s more about

control, says Julian Rawle, a submarine cable-industry expert.

Some people worry that owning the pipes that carry their customers data will

give big tech firms even more power than they already have, likening the

situation to Amazon s owning the roads on which its packages are delivered and

the lorries that carry them. Others fret that conventional network operators

may struggle to adapt their business models, as companies such as Facebook are

moving onto their turf. Within the next 20 years, predicts Mr Rawle, the

whole concept of the telecom carrier as the provider of the network is going to

disappear.

This article appeared in the Business section of the print edition under the

headline "Pipe dreams"