 62 M a r Voice 2012 of the ISSN 1948-3031 Industry

Finance & Legal Edition In This Issue: Financing A Submarine Cable System Increasing Focus on Submarine Cable Operations Under Foreign Corrupt Practice Act ISSN No. 1948-3031

PUBLISHER: Wayne Nielsen MANAGING EDITOR: Kevin G. Summers elcome to the 62nd issue of spring and the abundance of the summer Submarine Telecoms Forum, beyond. CONTRIBUTING WRITERS: Stewart Ash, Kent our Finance & Legal issue. Bressie, Derek Cassidy, Madeleine Findley, Jim W In this world of economic and geo-political Lemberg, Andrew D. Lipman, Keith Schofield, Christian von der Ropp March Madness is once again upon us. stress I take solace in the thought of all that is yet to come this year, and the promise Submarine Telecoms Forum magazine is To anyone outside of the USA, or even UK of spring. As William Shakespeare wrote published bimonthly by Submarine Telecoms Prime Minister David Cameron’s inner in Richard III: “Now is the Winter of our Forum, Inc., and is an independent commercial circle, this may mean little. But to us here publication, serving as a freely accessible Discontent; Made glorious summer by this forum for professionals in industries connected in the Commonwealth of Virginia or the sun of York…” with submarine optical fiber technologies and people in the other 49 American states, it is techniques. Submarine Telecoms Forum may a month of heroes, upsets and trepidation. Maybe the madness and promise that is not be reproduced or transmitted in any form, in whole or in part, without the permission of Stories of David versus Goliath or March will indeed bring a more interesting the publishers. basketball behemoths versus regional and productive time to the year ahead. wonders abound. Descriptions, such as Liability: while every care is taken in “epic” or “stunning” or “apocalyptic” are preparation of this publication, the publishers cannot be held responsible for the accuracy of commonplace. We compare “brackets;” the information herein, or any errors which even our President has a “bracket.” may occur in advertising or editorial content, And then we read that not only does or any consequence arising from any errors or omissions, and the editor reserves the right March Madness cause lifetime gambling to edit any advertising or editorial material problems, but also a drop of business submitted for publication. productivity on the order of $70M!

Contributions are welcomed. Please forward to It must be March. the Managing Editor at [email protected]. March has also brought new, green shoots Submarine Telecoms Forum, Inc. 21495 Ridgetop Circle, Suite 201 of flowers and grass to the browned Sterling, Virginia 20166, USA landscape. Soon, what was a relatively subtelforum.com mild winter will be completely gone, and in its place will be the sights and smells of 2 Copyright © 2012 Submarine Telecoms Forum, Inc. In This Issue...

Exordium 2 Increasing Focus on 21 Back Reflection 44 Wayne Nielsen Submarine Cable Operations Stewart Ash Under Foreign Corrupt News Now 4 Practice Act Conferences 47 Andrew D. Lipman Financing A Submarine Cable 7 Advertiser Index 48 System Jim Lemberg Remote South Atlantic 29 Island Lobbies For Coda 49 Submarine Cable Landing Coping With India’s New 15 Kevin G. Summers Telecom Equipment Security Christian von der Ropp Requirements And Indigenous Innovation Policies The Search for Submarine 34 Kent Bressie & Telegraph Communications Madeleine Findley Derek Cassidy

Submarine Cable Maintenance 38 from Mess to Mesh? Keith Schofield

3 News Now  Ancotel in Frankfurt Selected by Cable&Wireless Worldwide  Cross River Fiber Completes the Construction of an Express to be one of three EPEG Terrestrial Landing Stations in Fiber Route Between Carteret and Newark New Jersey Western Europe  DeepOcean Group Holding AS Names Frank Eggink as CFO  ASSC-1 Announce Perth to Singapore Submarine Cable  Djibouti’s IP hub guarantees access to the Global Internet System to Operators and Service Providers in East Africa despite  Australia Japan Cable Upgrades Submarine Link with Ciena recent triple submarine cables outage 40G Coherent WaveLogic Technology  Du undersea cable cut  Axin and Huawei Marine Finalize Survey Agreement for  E-marine expands its Salalah Storage Facility to match rising Optikor Network customer demand  Bezeq International and Alcatel-Lucent turn up ‘JONAH’  EASSY Cable Repairs to Take 2 Weeks Billionaire Ambani Said to Plan $1.5 Billion IPO of Submarine Cable Unit  EASSy downtime may last for days  Cable&Wireless Worldwide Selects Infinera CAT diagrams  East Africa undersea cable outage enters third week its backhaul overhaul  Emerald Networks Signs A System Supply Contract For  Ciena Widens Leadership in High Speed Optics with New Generation Trans-Atlantic Fibre Optic Cable System Innovative WaveLogic 3 Technology  EPEG - New submarine cable to link Oman with Europe  EUROPA and ALEXANDROS to enhance connectivity  Polatis 192x192 Optical Switch Enhances Availability of between Middle East and Europe High-Performance Terrestrial and Undersea Networks  First Israeli-owned high-speed cable system goes live  Rwanda: Govt Intervenes to Address Internet Disruptions  GBI lands submarine cable in Iraq  SAex cable plans on track: eFive CEO  GlobeNet And TE SubCom Begin Construction Of Bermuda-  Scripps Researchers, Noaa And TE SubCom To Implement US (Segment 5) Replacement Science Ports On Transoceanic Fiber Optic Cable Lines  Gulf Bridge International And TE Subcom Achieve Status Of  Seaborn Networks To Deploy First Submarine Cable With Ready For Service For The GBI Undersea Cable System Direct Route Between US And Sao Paulo, Brazil  Huawei Marine Launches BDM Cable System Solution  SEACOM Signs Capacity Agreement with Mozambican Ministry of Sscience and Technology  Italian Cable Co’s Patents Make Their Way To Google  Southern Cross Capacity Up and Price Down - Again  Lighthouse R & D Enterprises, Inc. 4000-m-rated physical oceanographic monitoring system reaches two-year  SubOptic supports internationally significant Porthcurno milestone Telegraph Museum  LION2 submarine cable goes live in Kenya in April  TE Subcom Marks Crucial Milestone Toward Delivering World’s First Ultra-High Capacity, 100g-Based, New  Main One builds own network infrastructure Undersea Cable System  Pacific Fibre And TE Subcom Complete Permitting Study  When undersea cables linked England to India For Trans-Pacific Subsea Cable System  Yenista Optics Releases Ultra-Narrow Tunable Filter with 4  Pacnet Expands 10G IP Transit Service GHz Bandwidth  PLN to lay $2b submarine cable from Sumatra to Java 6 Financing A Submarine Cable System

7Jim Lemberg am acquainted with the general We’ve all been there, in one way or another. financing, the mix of equity and debt manager of a service provider who tells Should we do the project? Should we stand financing, and the assessment of risk. Ian interesting tale: His company makes pat? One group sees it as an opportunity for Much more can and should be said about up about 1% of the parent corporation’s huge success. Another bunch is convinced this subject, but time and space limit what total revenues, but because his unit is nothing but disaster waits around the we put our hands to at the moment. high-tech, he sits on some senior groups corner. And the judgments are rarely one- within the corporation. He recently helped hundred percent objective. The group that Sources Of Financing evaluate technologies for another unit’s thinks the project is bound to succeed in Before we actually get started on this project and subsequently participated in the a big way will have to hire 25 new staff if quest, remember that, in most cases, we analysis of that project’s likely cashflfow. the project moves forward. The group that are not looking simply for tens of millions His own professional assessment was that absolutely knows the project is doomed of dollars. We will most likely need the project had equal chances of losing or from Day 1 will become an after-thought hundreds of millions, and those funds may making money. In his words, “Nobody in the larger company picture if the project need to come from more than one source can tell for sure which way certain trends is pursued. and arrive at different times in the project. will turn, and the models show that small So, we will very possibly need to assemble changes in those trends have huge impacts So, how do some of the dynamics play out a team of folks to chase down this pot of on the cashflows. It’s basically a blind bet.” as the dollars and cents of submarine cable gold, with each member having a network Some of his colleagues shared his views systems get studied? Who asks what kind of professional and personal contacts to and opposed the project. Others, mostly of questions and why do they ask those get us in the door of one or two particular within the group that “owned” the project, questions? And how well do the risks of funding sources. were convinced that the project would these projects get measured? Let’s roll bring in a pile of cash and position the up our sleeves and try to dig in for some The first pool of potential project investors corporation as a forward-thinking leader answers. is the world’s communications services within the marketplace. providers. In point of fact, the service I understand that you have a submarine providers used to be the underlying owners cable project in mind and think that I can and operators of submarine cable systems. help assemble finance. Please tell me what Today, however, things have become a bit you’re thinking. Why should I decide to more… varied. To a significant extent, the help you out? What makes this a worthy ownership and operation of these systems effort? Well, with whom might I speak on has become a bit of a niche, in many cases your behalf? To whom might I present your at least one step removed from the true project as deserving financial support? communications service provider. Having said that, we will want to at least explore This humble little article will only quickly the possibility of one or more service visit three broad areas related to financing providers playing a leading part in your these large capital projects: sources of project. 8 The next obvious source is the commercial A fourth group exists that is sometimes your partners. We’ll talk about this in a banks and financial institutions of the overlooked or downplayed as far as moment when we talk about the mix of nations involved in your project. This participation in submarine cable system equity and debt financing. It’s enough includes both the countries in which your projects. Insurance companies and large for now to observe that any other project system will land and the countries that investment groups have significant financial supporters will expect you to are home to the (potential) manufacturers amounts of funds which they need to have made the first investment. of your infrastructure. In each case, those invest. The challenge with these players institutions likely have some vested is that they might not have previously Lastly, are you perhaps proposing to offer interest in continued investment into their participated in a project such as yours. significant connectivity to a country or nation’s communications infrastructure. That is decreasingly the case, however, as group of countries that have limited access They may especially find themselves such projects are becoming somewhat more to the outside world at present? Maybe motivated to participate in an opportunity widely known around the world. Having you think the nation you propose to serve that holds the promise of bringing money said that, you will have some interesting is well-positioned to take advantage of into the national economy via the project’s discussions with these funding sources advanced communications technologies. manufacturer(s) and/or installer(s). about the various risks in your project (and Perhaps the country is widely perceived which we will address in a moment). as needing advanced connectivity… so A third group of sources are various much so that even the World Bank might large commercial entities for whom be willing to lend its strength to the communications infrastructure plays a effort. This is one possibility: political strategic role. Some of these newer players clout standing ready to support your very anticipate a significant and growing worthy project that promises to bring requirement for robust networks to genuine opportunities for advancement to transport data literally around the world. the countries in which it will land. Indeed, Where such global entities previously this has been a significant part of projects expected traditional service providers to be in recent years in both the African and the parties directly involved in submarine Asia-Pacific parts of the world. Another cable project development, these new recent European regional project that is entities possess a confidence and initiative not quite ready to create lots of public that – when combined with mountains of fanfare is reported to have obtained similar cash – results in their eager entry to project financing guarantees for 50% of its debt. participation. If you are fortunate enough These backstop provisions have at least two to have targeted countries or regions impacts on project financing: (i) bankers into which they wish to gain or maintain are significantly more willing to consider strategic position, you could find yourself lending money under such conditions; with a rich friend. A fifth group of potential (actually, (ii) the risk of nonpayment is significantly necessary) project investors is you and mitigated. Both are good for you! 9 Although we are not going to talk about You will possibly be tempted to substitute implies a third party’s being able to clearly it in detail, any potential investor (debt or sweat-equity for cash. Depending upon see value in the project). equity) will expect you to have created a how attractive potential investors will comprehensive business plan that at least realistically see your project, you may As a result of having talked with system includes: decide to resist the easy path of sweat suppliers and having developed pro forma • Market research about… equity. If you have any uncertainty about financials, you will know approximately • Traffic demand how others will view your project, consider how much funding the project will require • Bandwidth available on existing becoming its first equity investor. Form a and when those funds will be needed. You infrastructure legal entity, fund it with your own cash will also have some sense of how much • Other planned infrastructure and pay yourself as you go about early debt service the project can support and • Bandwidth pricing & trends project development activities. Most of when principal payments can be made. • The technologies your project will this will be moving money from your left The sooner the debt can be repaid, the better employ, including the project’s future pocket to your right pocket. Depending both for the project’s cashflows and for the expandability upon specific conditions, some of your lender’s comfort. Having said that, an • Rough order of magnitude costs to initial investment will likely not complete overly aggressive plan for debt repayment purchase, install & commission system the journey from left to right pockets, but runs the risk of stressing the project’s • Pro forma financial statements, will instead end up in the government’s cash position. Potential investors will including timing & type of investments pocket via payroll taxes. As painful as that want to see a realistic plan that maintains required may be, consider it the cost of persuading prudent cash reserves for unforeseeable • Management & staffing plan, including subsequent investors to give your project a developments. directly related previous experience serious look. • Sales & marketing plan If you plan to market • Network operating plan, including If you choose to structure your equity investments into marine maintenance provisions initial project investment your project, you need as debt, it will carry a to be prepared to answer Equity & Debt similar message to that of the question of how Before we go any further, let’s remind an equity investment, but the investor will recover ourselves that some party is going to have with less impact because his money. Although we to be the first to put cold hard cash into it implies that you expect mentioned dividends just a moment this adventure. And since it’s your idea, repayment from the project’s ago, very few investments truly you are in the best position to appreciate cashflows. On the other hand, pay dividends. Rather, financing its value and be Investor Number One. the implicit message of equity people talk about exit strategies Subsequent investors will almost certainly is that you expect to get your through which the initial expect you to have somehow put your skin money back, perhaps through investors receive their original into this game. And cash is considered the dividends but more likely cash plus some premium. most valuable of skins. through a buyout (which in turn You will need to tentatively 10 identify what kind of party might want to investment as equity will make a stronger low, moderate or high risk. Ah, yes. buy out the initial investors and at what impression on subsequent investors than Financial folks look a bit more closely than approximate price. will an initial debt investment. On the other simply a generalized, overall description hand, the relatively safer debt investment like that. All sorts of different risks are The possible exception to the initial investor will generate far less return than the riskier identified and assessed. If really turned wanting to exit the project is the investor equity investment. Which lead us to… loose, a financial manager could probably for whom the project provides some other produce hundreds of pages of analysis reward. This generally comes in the form Assessing Risk on the various risks in your project. You of access to bandwidth, either at a discount When a financial manager considers would be amazed at how risky your simple to prevailing market conditions or on an whether or not to loan you money, he is little project actually is! assured basis. In the former, the investor is really just renting you that money. Those likely an entity whose business operations dollars are a tool that you are going to One of the principles involved in assessing require bandwidth and who has access to use for some particular job, and you will a project’s risk is that the greatest risks special pricing of some sort. To be clear, eventually return them to their owner. tend to exist in its very early stages. I am referring here to a special pricing While you use them, you must pay rent. Another way of describing risk is to call it schedule that is available to a general Financial folks call that rent either interest the possibility of bad things happening. It class of customers, typically the very first or return, depending upon whether the stands to reason that when there are a lot of customers to have made commitments arrangement is one of debt or equity. things yet to be accomplished in a project, to purchase bandwidth on the system. there is a pretty fair chance of something Subsequent customers buy bandwidth One of the major underlying factors that going wrong along the way. We might not from a price schedule that contains some determines how much interest will charged be able to accurately predict what that will premium reflecting the timing of the or return will be expected is called “risk.” be or when it might happen, but we can purchase commitment. With regard to The average person will agree with that, say that there is a chance of some deviation a requirement for assured availability of thinking that a given project has perhaps from the plan. So, the earliest investors in bandwith, the investor is again an entity a project, whether the investment is equity whose operations require the system’s or debt, can reasonably be seen as exposing capacity but this circumstance arises when themselves to the greatest risks. Thus, the bandwidth along the route in question earliest debt or equity earns the highest is unusually difficult to obtain. This interest or return. investor may consider it worth his money to hold an equity position in the project in If risk if significantly impacted by order to guarantee access to the system’s uncertainty, doesn’t it make sense that you bandwidth. should be able to reduce your project’s risk by reducing some of its uncertainties? At the end of the day, equity is understood Do your homework! Make realistic to carry greater risk than debt. Your initial assessments of how much demand exists 11 for bandwidth along your system’s routes. My wife and I once sold a house to a young given system. Unless your project spans Hire people with demonstrated experience. couple. The parents on each side had given very short distances, the project engineers Do business with system suppliers who can them money with which to buy their first will design the system around fibers be relied upon to deliver the technology home together. You’ve heard of “earnest with very specific, tightly defined optical and deliver it on time. And, be prepared to money”? Maybe a few thousand dollars. characteristics. Further, the fibers along communicate this in a believable manner Well, these folks gave the entire purchase any given portion of the system will be to potential system investors. price as their earnest money. They wanted closely matched within the bounds of the the place! Presales are a lot like earnest defined characteristics. This all means that Three fairly specific risks exist for money. Higher numbers make the deal your system supplier will be very careful submarine cable systems that deserve just much easier to do. about fiber selection… and the desired a bit of attention. These are risks that come fibers may or may not be readily available into play for almost all such projects, but in the desired quantities within the desired can be successfully mitigated by competent timeframes. Uncertainty about adequate practitioners in the field. We will not deal availability may exist. If it does, it gets with them in any particular order. All are translated into financial risk. important. A finite number of cable factories exist Presales throughout the world. Your selection of There is a very holy word in the world of a system supplier may be partly driven these projects… p r e s a l e s. Pronounce by availability of cable manufacturing that very slowly, with special reverence. capacity within the timeframe in which However, there are presales and there you wish to undertake your project. That are PRESALES. At least three significant Manufacturing & Installation Capacity may in turn affect the price you pay to your factors are involved in determining the Some risk will exist with regard to the selected supplier. If your system requires value of any given presale. First, is the availability of manufacturing & installation a fair amount of cable, the cable factory in firmness of the buyer’s commitment to capacity within the broad submarine which it is manufactured may experience actually purchase the bandwidth. Has a cable industry when your project is ready any of several possible operational upsets. contractual obligation been created, or has to be built & deployed. Your system’s This area of difficult to predict uncertainties a nonbinding statement of intention been technology will be comprised of three also gets translated into financial risk. made? Second, is the buyer a well-known broad components, two of which have carrier / bandwidth user or a lesser known underlying limitations in their availability, There also are a finite number of cableships party? Third, how much of the system’s fiber and cable. throughout the world, and the limitations initial bandwidth has been taken up through may become even tighter in the region presales and how do the resulting revenues From time to time, suppliers find of the world in which your system will play out in your pro forma financials? themselves challenged to obtain the precise be deployed. Weather conditions are quantities & types of fiber they need for a related to but distinct from the availability 12 of cableships. These uncertainties are Finally, the process of determining the particular supplier very eager to have your translated into financial risk. amount of overall risk in a submarine business… an eagerness that translates to cable system project is a somewhat any of several financial advantages for you. Permitting subjective matter. Although specific Significant delays in project execution numbers are used, the process is filled Let’s go back to the parties who actually use sometimes arise during the permitting with opportunities to move those numbers your system to transport bits of data from process. This is a risk component that in one direction or the other. Your interest here to there. Some of those parties will you will be well-advised to address (and as the system developer and owner is for be carriers with true needs to get certain resolve) as early as possible. While most the lowest possible risk to be assigned. On amounts of data to specific places. Others nations present few obstacles to obtaining the other hand, the parties from whom will be entities operating global networks licenses giving a submarine cable system you will “rent” your funding will wish to and having gaps in those networks that the telecommunications regulatory right see those numbers float as high as can be you might be able to fill. Some will be to land on the nation’s shores, the local reasonably achieved. Reduce your costs the carriers in the countries in which your permitting issues are often a very different by doing your homework and showing system lands; they need to get their bits situation. Environmental concerns are how the various risks will be minimized! to other parts of the world, and they want frequently huge, requiring significant time carriers from other parts of the world to and resource to be satisfactorily addressed. Additional Considerations bring bits to their country. You may even A given landing site may even need to I worked for a number of years on the be pleasantly surprised to find one of be abandoned because of intractable supplier side of the submarine cable these players willing to exercise significant resistance. To the extent you have addressed market. Suppliers exercised various influence to bring other players to your and resolved these uncertainties, you will ways in which to effectively make certain project in order to give you the critical mass reduce the amount of uncertainty that gets projects happen. I can remember more necessary to turn your promising idea into translated into financial risk. or less sponsoring what used to be called reality. “data gathering meetings” where carriers met to talk through how much capacity Conclusion each would take on a given project. Those The friend that I mentioned at the beginning days, of course, are long gone. Today of the article reports that the project he suppliers still have specialists who know viewed as of questionable merit is moving what it takes to obtain project financing forward. The largest factor in the decision of different sorts. They are there to help to pursue the project was a cashflow people like you. Some suppliers have analysis that portrayed many millions roots, connections or even participations of dollars pouring into the corporation. in the carrier side of the market (each of He remains skeptical about the project’s which has its own facile way of finding playing out as depicted in that analysis, dollars). Depending upon specific market but admits that his colleagues won over conditions, you may be able to find a the board of directors by presenting a great 13 deal of detailed information in support of Submarine Cable Cable Submarine a favorable outcome. 21495 Ridgetop Circle, Suite 201 | Sterling, VA 20166, USA submarine telecoms 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 Compliments of INDUSTrY increase your chances of getting that

money and getting it at affordable “rents” - Almanac by identifying the parties who will benefit rEPOrT from your project in various ways and 2012 winning them to your side. Find a way to demonstrate that you have already 2011 edition 2011 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.

14 arriving this summer: Coping With India’s New Telecom Equipment Security Requirements And Indigenous Innovation Policies

Kent Bressie &

15Madeleine Findley he telecommunications sector is one To address the threats it sees, the Indian Indian Customs and Tax Challenges of the great success stories of the Government has over the last three years Indian economy. Mobile penetration issued a series of amendments to the licenses T The challenges of landing, operating, has grown more quickly in India than just granted to Indian telecommunications and repairing undersea cables about anywhere else in the world. Indian services providers (“TSPs”) and Internet connecting into India extend beyond carriers own and operate the most extensive service providers (“ISPs”), imposing new new national security regulation and global networks of undersea cables. India’s telecom equipment security requirements indigenous innovation policies. With telecommunications infrastructure has and proposing a variety of measures recent cable projects (particularly the also helped to power one of India’s other to encourage or require development, Europe-India Gateway system), the great economic successes, the outsourcing manufacturing, and testing of equipment Indian Government has also sought industry. Notwithstanding the roaring in India. The Indian Government has also to impose excessive customs duties successes of India’s telecommunications issued a serious of draft national policies and taxes on undersea cable operators sector, however, the Indian Government designed to enhance infrastructure and and their suppliers and maintenance feels threatened by the state of the sector. information security and to increase providers. First, India sees telecommunications as the reliance on electronic equipment designed source of security threats. Fear of a repeat and manufactured in India by Indian firms. Extraterritorial Assessment of Customs Duties: Operating units of India’s of the November 2008 terrorist attacks in All of these measures apply to undersea Central Board of Excise and Customs Mumbai—where Lashkar-e-Taiba militants cable operators and their suppliers, as (“Indian Customs”) have assessed used mobile phones and VoIP to direct the undersea cable operators hold licenses customs duties on all goods “imported” attacks—or of having one’s agency blamed subject to the DoT amendments and fall into the Indian exclusive economic for such a repeat run deep within the within the scope of the contemplated zone (“EEZ”), including those imported Indian Government. Second, India sees policy changes. These measures will make temporarily. These assessments conflict a vibrant telecommunications services it more expensive and burdensome to with the Indian Customs Act and with sector operating largely with equipment operate undersea cables landing in India interpretative guidance issued by manufactured and tested outside of India and to sell new undersea cable systems India’s Ministry of External Affairs, using technologies developed outside and spare plant in India. both provide for assessment of customs of India, inflaming sensitivities about duties on non-energy-exploration- the need for self-sufficiency and about License Amendments related activities within the Indian the comparative success of China in territorial sea only. These assessments encouraging domestic innovation and Since December 2009, India’s Department also conflict with India’s treaty obligations, namely United National manufacturing of electronic equipment. of Telecommunications (“DoT”) (in Convention on the Law of the Sea The Indian Government has cast such consultation with India’s Ministry (“UNCLOS,” which India has ratified) foreign-developed, -manufactured, and of Home Affairs) has imposed new and India’s specific commitments under -tested equipment itself as a security requirements it asserts are necessary to the WTO General Agreement on Trade threat. secure its telecommunications network in Services (“GATT”). infrastructure from malware, spyware, 16 and other national security threats. DoT to fines and criminal proceedings for has issued multiple amendments to security breaches.5 DoT has suggested, Improper Assessment of Customs Duties on Services: Indian Customs its operating licenses for TSP licensees however, that a licensee may use the has also assessed customs duties on the (including undersea cable operators) and 2011 Template Agreement to assist value of services provided within the ISPs, and has created a template TSP- in the licensee’s compliance efforts Indian EEZ. These assessments violate vendor agreement, all designed to address (meaning that the licensee could use Indian law, Indian GATT commitments, infrastructure security and equipment the execution of such an agreement and customary international law. Duties testing, and to require technology transfer as a defense or to shift liability to the apply only to goods, not services. to Indian firms and employment of Indian vendor). engineers. Extraterritorial Assessment of Service • Vendor Assurance and Certification: Tax: Indian Customs has also assessed DoT issued the current license amendments The 2011 Template Agreement’s the Indian Services Tax (Chapter V of in May 2011.1 Although the DoT originally relevant provisions, if executed in the Finance Act, 1994) on the value of mandated the template TSP-vendor an equipment purchase agreement, services provided within the Indian agreement,2 in May 2011 DoT made it would require that a vendor ensure EEZ. Since 2009, Indian Customs has optional, with its clauses recommended and certify, and provide any test assessed its service tax on installations, structures, and vessels out to the limit for inclusion in equipment purchase reports, demonstrating that the of the Indian continental shelf and agreements.3 Together, the May 2011 equipment: complies with the latest Indian EEZ. These actions conflict with international security standards and License Amendments and 2011 Template UNCLOS and customary international Agreement do the following: recommendations; conforms to the law, which permit India to assert licensee’s security policies; has been authority over fiscal matters only out • Licensee Liability: The May 2011 subject to penetration testing and is safe to the edge of its contiguous zone License Amendments each provide to connect; is secure against malware; is (24 nautical miles) and over natural that the “Licensee shall be completely secured against cryptography-related resource exploration and exploitation and totally responsible for security of vulnerabilities; and has been “future out to the edge of the EEZ (which is not their networks.” 4 A licensee is subject proofed” against data flow attacks.6 at issue with the installation, operation, Effective April 2013, equipment testing or repair of undersea cables). 1. See, e.g., DoT Letter to All Unified Access Service Licensees, No. 10- 7 15/2011-AS.III/(21), (May 31, 2011) (amending license ¶ 41.6A(viii)) (with amend- must be conducted in an Indian lab. ments to other TSP and ISP licenses, “May 2011 License Amendments”). A subse- Double-Exposure for Assessment of quent amendment in July 2011 was limited to addressing capacity to comply with lawful intercept requests. • Escrow of Source Code and Design Customs Duties and Taxes on the Same 2. See DoT Letter to All Unified Access Service Licensees, No. 10-15/2009- Documents: The 2011 Template Services: Indian Customs has assessed AS.III/Vol.II/(Pt.)/(25), at (July 28, 2010) (inserting license ¶ 41.6B(vi) (“Any Ven- customs duties and taxes on the very dor/Supplier of equipment/software to the Licensee shall have a valid legal agree- Agreement’s relevant provisions, if ment specifying the duties and obligation of the Licensee and such Vendor/Supplier same value for the very same services. in a template as specified by the Licensor.”) (with amendments to other TSP and ISP executed in an equipment purchase licenses, “July 2010 License Amendments”). agreement, would require the vendor 3. DoT, Recommended Clauses in the Form of a Template for the Agreement Between Telecom Service Provider and the Vendor of Equipment, Products and Services for Addressing Security Concerns, May 31, 2011, http://www.dot.gov.in/as/2011/Tem- 5. May 2011 License Amendments (amending license ¶ 41.6A(ix)(c)). plate_31-05-2011.pdf (“2011 Template Agreement”). 6. 2011 Template Agreement, §§ 7.1, 7.2, 7.6 - 7.8. 17 4. See, e.g., May 2011 License Amendments at ¶41.6A(i). 7. May 2011 License Amendments (amending license ¶ 41.6A (iii)). • to place certain intellectual property, • Personnel Nationality and Security New National Policies including source code and design Clearance Requirements: Both the documents, into escrow, permitting May 2011 License Amendments and In the last year, India has also issued the licensee to access such information the 2011 Template Agreement (if the a slew of new draft national policies in ill-defined circumstances involving relevant provisions of the latter were addressing telecommunications,14 security breaches.8 executed in an equipment purchase electronics,15 information technology,16 agreement) require the equipment telecom security,17 and telecom equipment • Inspection, Audit, and Blacklisting vendor to employ an Indian national manufacturing.18 All of these policies Provisions: Both the May 2011 with a security clearance as its security seek to promote indigenous innovation License Amendments and the contact.12 This requirement applies and favor equipment, software, and Template Agreement (if the relevant regardless of whether or not the technology developed, manufactured, and provisions of the latter were executed vendor has an Indian subsidiary or tested in India through the use of financial in an equipment purchase agreement) Indian operations. and tax incentives and to grant preferential require vendors to permit the access to products manufactured in licensee, DoT, or designated agencies As onerous as these provisions seem, India.19 More indirectly, they also seek to to inspect hardware, software, their earlier versions were even more promote Indian national security through design, development, manufacturing burdensome. For example, DoT’s March self-sufficiency. To that end, India issued facility and supply chain at the time 2010 license amendments would have in February 2012 a notification of a near- of procurement and to additional required TSP-vendor agreements for final policy for preferential market access inspections over the duration of the purchase of critical equipment and for “manufactured-in-India” and “Indian the contract.9 The 2011 Template software procured from foreign suppliers products” in government procurements, Agreement would require the (whether or not they are the original including procurements by telecom licensee to insert into any purchase equipment manufacturers) to require licensees.20 agreement penalty provisions for non- the transfer of technology to Indian compliance; it would also require the manufacturers within a period of three licensee to conduct an annual audit, (3) years from the date of the purchase 14. DoT, National Telecom Policy-2011, at 7-27, http://mit.gov.in/sites/upload_ files/dit/files/Draft-c_4102011(1).pdf (“NTP”). 13 subject to the right to inspect the order. Following extensive consultations 15. DIT, National Policy on Electronics 2011 (Oct. 4, 2011) (“NPE”), http://mit. 10 gov.in/sites/upload_files/dit/files/Draft-NationalPolicyonElectronics2011_4102011(2).pdf. vendor’s records and premises. The between equipment manufacturers and 16. DIT, National Policy on Information Technology 2011 (July 10, 2011) DoT may at its discretion blacklist the software suppliers, the DoT later dropped (“NPIT”), http://mit.gov.in/sites/upload_files/dit/files/National_Policy_on_Information_ Technology_07102011(1).pdf. vendor from any supply deal with any this requirement. 17. DoT, Draft National Telecom Security Policy, (Feb. 18, 2012) (“NTSP”) 11 (document on file with authors). Indian operator. 18. Telecom Regulatory Authority of India, Recommendations on Telecom Equipment Manufacturing Policy, Apr. 12, 2011, http://www.trai.gov.in/WriteReadData/trai/ upload/Recommendations/133/Recommondation%20_telecom.pdf (“TRAI Recommenda- 8. 2011 Template Agreement, §§ 7.11-7.12. tions”). 9. See, e.g., May 2011 License Amendments (amending license ¶ 19. See NTP at 17, § IV, ¶¶ 2.11, 2.12; NPE at § IV ¶ 5.1 (prioritizing design 41.6A(viii)); Template Agreement § 7.14 (requiring vendors to permit up to two in- 12. See, e.g., May 2011 License Amendments at ¶ 41.6A(v); 2011 Template and development of technologies and products developed and tested in, and appropriate for, spections per year). Agreement, § 4.1.2. India); NTSP at 25. 10. 2011 Template Agreement, § 12. 13. DoT Letter to All Unified Access Service Providers and All ILD, NLD, ISP, 20. See DIT, Notification, Preference to domestically manufactured electronic 11. July 2010 License Amendments at ¶ 41.6B(vii)(b); 2011 Template Agree- PMRTS, VSAT & MNP Licensees, No. 10-15/2009-AS.III/193, at viii (March 18, 2010) goods in procurement due to security considerations and in Government procurement, File 18 ment, § 7.13. (“March 2010 License Amendments”). No. 8(78)/2010-IPHW (Feb. 10, 2012). Of these draft policies, the TRAI of the various draft policies have already Kent Bressie is a partner Recommendations and preferential market generated significant concern among with the law firm of access policy have generated the greatest industry and foreign governments and Wiltshire & Grannis LLP concern, as they recommend elaborate could, if implemented, trigger trade in Washington, D.C., and requirements for requiring Indian TSPs disputes, particularly with respect to heads its international to source over time more of their network India’s various commitments within the practice. An expert on equipment and infrastructure from World Trade Organization. Given the telecommunications regulation and manufacturers operating in India and, size of the Indian market, it remains to be international trade and investment, he has ultimately, from domestic, Indian-owned seen whether suppliers would abandon extensive experience with the range of legal manufacturers.21 All of these policies it rather than comply with less favorable and regulatory issues affecting undersea remain subject to further review and conditions for market entry, such as cables, including licensing and permitting; development. DoT expects to issue the establishment of a commercial presence national security, export controls, and final NTP in June 2012. The timing of the within India and escrow of intellectual economic sanctions; transaction and other policies is less certain. property. While India would not be investment reviews; market access; the first country to try to build a fence corporate and commercial transactions; Some Final Thoughts around its domestic market, its actions and the law of the sea. He has represented are particularly troubling for the undersea undersea cable operators, suppliers, and The 2011 License Amendments and the cable industry, which on the equipment investors in connection with projects on 2011 Template Agreement will increase side functions on a global basis. six continents. compliance costs for Indian TSPs and ISPs and could also delay their access to Madeleine Findley is a equipment, given the various security- partner with Wiltshire & related prerequisites. These requirements Grannis LLP in Washington, will also continue to complicate the D.C., and practices relationship between TSPs/ISPs and principally in the area of their equipment vendors, giving each an telecommunications law. incentive to shift the risk of enforcement She regularly advises undersea cable onto the other (though the current operators and suppliers on a wide variety requirements still place the principal of legal and regulatory issues arising from obligations on the licensees) and creating cross-border operations. concerns about access to intellectual property.

The indigenous innovation and preferential market access components

19 21. TRAI Recommendations at 52. 20 Increasing Focus on Submarine Cable Operations Under Foreign Corrupt Practice Act

21Andrew D. Lipman nforcement of the Foreign Corrupt Practices Act (“FCPA”) has Estrengthened over the past several years and seems likely to continue throughout 2012 and into the future. The United States Department of Justice (“DOJ”) and the Securities and Exchange Commission (“SEC”) are increasingly using the FCPA in their investigations, and the telecommunications industry generally, and submarine cable industry in particular, are becoming the subject of increasing focus. Three features of the submarine cable sector make it especially ripe for FCPA enforcement: First, in order to establish a submarine cable landing station, parties must necessarily obtain a number of licenses, permits and other government authorizations. Repeated contact with a foreign government “foreign officials” under the FCPA, and Lucent and three subsidiaries will pay $92 gives foreign officials many chances improper payments to employees of these million to the DOJ and $45 million to the to request or demand — directly or entities to secure sales violate the FCPA. SEC to resolve the charges arising from indirectly through agents, consultants and Likewise, many foreign incumbent carriers payments made to foreign officials in order other third parties — improper gifts or also hold monopoly rights to submarine to win business in Costa Rica, Honduras, payments in return for these government cable facilities, and as such, are better able Malaysia and Taiwan. According to the authorizations. Second, submarine cable to extract concessions from U.S. companies charging documents, the company also landing facilities have recently been seeking to transit traffic via those facilities. hired agents without proper controls in focused on developing countries, often Kenya, Nigeria, Bangladesh, Ecuador, with loose or no standards governing the Reflecting the recent focus on the Nicaragua, Angola, Ivory Coast, Uganda requirements for authorization of those submarine cable industry, on December and Mali. Overall, the charging documents facilities. Third, prospective purchasers of 27, 2010, the DOJ and SEC announced assert that Alcatel-Lucent won more than telecommunications products or services, the seventh-largest FCPA settlement of all $450 million in contracts, from which it including submarine cable bandwidth, time against Paris-based Alcatel-Lucent earned $48.1 million in profit, as a result are often state-owned or controlled S.A. (“Alcatel-Lucent”).1 In all, Alcatel- of improper payments to foreign officials.

entities, and employees of state-owned 1. See DOJ Press Release, Alcatel-Lucent S.A. and Three Subsidiaries vices, including submarine cable equipment and services, was formed in 2006 after or controlled entities are considered to be Agree to Pay $92 Million to Resolve Foreign Corrupt Practices Act Investigation (Dec. U.S.-based Lucent Technologies Inc. (“Lucent”) merged with Alcatel SA (“Alcatel”), a 22 27, 2007). Alcatel-Lucent, which provides telecommunications equipment and ser- French company. also recently announced that it is under investigation concerning a submarine cable contract in French Polynesia. In November 2011, subsidiary Alcatel-Lucent Submarine Networks was charged in French Polynesia with “benefitting from favoritism” over contracts it was awarded in 2007 for a submarine cable between Tahiti and Hawaii.

Significantly, during the company’s settlement negotiations it pledged to stop using third-party sales and marketing agents when conducting its business worldwide. The government highlighted that the pledge was unsolicited and made on the company’s own initiative and at a substantial financial cost. Third- party agents have often been shown to be central players in many FCPA cases in the telecommunications sector, and they are often used by vendors, investors, and their The Deferred Prosecution Agreement filed connecting fourteen countries.2 Alcatel’s partners when undertaking submarine in the United States District Court for portion of the contract was approximately cable operations, increasing the likelihood the Southern District of Florida includes $258 million. According to the information, of FCPA violations. Notwithstanding this information alleging that Alcatel generated Alcatel CIT paid the consultant concession concerning the company’s a significant portion of its revenue in approximately $626,492 in compensation business operations, the DOJ and the SEC Bangladesh, for example, from Bangladesh for services provided in connection with each charged the parent company and Telegraph and Telephone Board, the state- the project and approximately $2,524,939 all three subsidiaries with violating the controlled telecommunications services in connection with various upgrades to internal controls and books and records provider, and that Alcatel used an agent in a predecessor of the project aware of a provisions of the FCPA. In addition, the Bangladesh but failed to conduct adequate significant risk that Bangladsh Consultant SEC charged the parent company, and the due diligence on the consultant, and that would pass on all or a part of these DOJ and the SEC each charged the three Alcatel Standard retained the agent in payments to foreign officials. The Company subsidiaries, with violating the FCPA’s connection with a submarine cable project 2. Deferred Prosecution Agreement, United States v. Alcatel-Lucent S.A., anti-bribery provision. 10-CR-20907 (AS) at 3, (S.D. Fl. filed Dec. 27, 2010). 23 Recent Enforcement Trends

The Alcatel-Lucent case, along with several other recent enforcement actions against telecommunications companies, reflect three significant trends in recent FCPA enforcement, and are of particular note for the submarine cable industry. First, FCPA cases in recent years increasingly have focused on the individuals responsible for making or approving the improper payments. Second, fines have grown significantly over the past several years. Third, voluntary disclosures by companies of their own FCPA violations, often discovered through due diligence when the company undertakes a merger or acquisition, are becoming a significant source of enforcement actions.

Aggressive Prosecution of Individuals

The government has focused increasingly months in prison.3 His co-defendant Edgar $166,541. The sums were paid in order to on the involvement of individuals in FCPA Valverde Acosta, Alcatel’s senior country enable ITXC to terminate calls to Nigeria cases in the telecommunications sector and officer in Costa Rica, was sentenced to one at preferential rates, and the government the submarine cable industry in particular. year in prison in Costa Rica. alleged that the company made $1,136,618 For example, the Alcatel-Lucent case in net profits on this business. NITEL involved the former Alcatel executive In 2005, the SEC filed a civil action against was a relatively small operator, but was Christian Sapsizian, a French citizen who Yaw Osei Amoako, Regional Director the owner of the sole undersea cable was the company’s Deputy Vice President for Africa for ITXC Corporation, an landing station for Nigeria, connecting for Latin America. Mr. Sapsizian pleaded international carrier, specializing in VoIP. the country to SAT-3 and thus to Europe guilty to causing Alcatel to wire $14 million He was alleged to have bribed a senior and the Americas, giving it a monopoly in “commission” payments to a consultant, official of the state-owned Nigerian on international calls. In September who then transferred $2.5 million to a Telecommunications Limited (NITEL), 2006, the SEC filed a civil enforcement government official in Costa Rica, and between 2002 and 2004, with payments of against Steven J. Ott (Vice President for in September 2008 was sentenced to 30 3. DOJ Press Release, Former Alcatel CIT Executive Sentenced for Paying Global Sales) and Roger Michael Young 24 $2.5 Million in Bribes to Senior Costa Rican Officials (Sept. 23, 2008). (Managing Director for the Middle East Joseph agreed to cooperate with the counts. Four other individuals have been and Africa), claiming they negotiated and DOJ in exchange for consideration of a convicted and sentenced for their roles in approved bribes to senior officials of other lighter sentence. He faces up to twenty the Haiti Teleco case.5 government-owned firms in Rwanda and years in prison and already agreed to Senegal, and for causing ITXC to record forfeit $955,000 as part of his plea. In Large Criminal and Civil Fines the bribes as legitimate business expenses October 2011, the court sentenced two in violation of the Exchange Act. Without other defendants in the case to significant Alcatel-Lucent’s $137 million fine is just admitting culpability, the three consented jail terms. Joel Esquenazi, the former one example of numerous recent headline- to final judgments, and Mr. Amoako was president of Terra Telecommunications making fines under the FCPA. To date, the ordered to pay $188,453 in disgorgement Corp., received a fifteen year prison term. largest monetary sanction ever imposed and prejudgment interest. The three Carlos Rodriguez, the former executive in an FCPA case belongs to Siemens entered guilty pleas to felony charges of vice president of Terra, was given an AG, one of the largest engineering and conspiring to violate the FCPA and the 84-month sentence. They were convicted telecommunications companies in the Travel Act. Mr. Amoako was sentenced to of multiple FCPA and money laundering world (and a major vendor in submarine eighteen months in jail and fined $7,500, Mr. Young received five years supervised release, three months each of home confinement and community confinement and a $7,000 fine, and Mr. Ott was given five years supervised release, with six months each of home and community confinement and fined $10,000.4

Another recent case involving Miami- based Terra Telecommunications Corp. and Telecommunications D’Haiti (“Haiti Teleco”) — Haiti’s state-owned telecommunications company and sole provider of landline telephone services to and from Haiti — resulted in the government charging numerous individuals. A former director of Haiti Teleco was accused of accepting bribes pleaded guilty in Miami to conspiracy to

launder money. In February 2012 Patrick 5. DOJ Press Release, Executive Sentenced to 15 Years in Prison for 4. DOJ Press Release, Two Former Executives Of Itxc Corp Plead Guilty And Scheme to Bribe Officials at State-Owned Telecommunications Company in Haiti 25 Former Regional Director Sentenced In Foreign Bribery Scheme (July 27, 2007). (Oct. 25, 2011) cable equipment), which settled FCPA cable, paid a $2 million fine to the DOJ in corporate acquisitions and mergers. In charges with the DOJ, the SEC and the to settle FCPA charges arising from its the Alcatel-Lucent merger, both parties Munich Public Prosecutor’s Office with acquisition of Latin Node Inc. (“Latin had pre-existing FCPA issues. In the multiple guilty pleas and the payment of Node”), a Florida provider of wholesale merged company’s recent settlement, the $1.6 billion in fines. A number of smaller telecommunications services using majority of the alleged improper conduct telecommunications companies have Internet protocol technology, involving was committed by Alcatel entities prior also paid substantial fines to settle FCPA Latin Node’s pre-merger activities. to the 2006 merger. On the other hand, charges in recent years.6 In April 2009, In December 2009, UTStarcom Inc. in December 2007, only a year after the for example, eLandia International Inc. (“UTStarcom”), paid $3 million to settle merger, Lucent settled FCPA charges with (“eLandia”), a Florida-based information FCPA charges. the DOJ and SEC for $2.5 million based and communications technology company on pre-merger promotional payments to that recently entered into an agreement Although these fines are smaller than Chinese government officials. with American Samoa to reconnect and those paid by Alcatel-Lucent and Siemens operate a previously defunct submarine AG, they may have a much greater impact Likewise, soon after eLandia acquired on these much Latin Node, eLandia discovered prior smaller companies FCPA violations committed by the -- compared to their acquired company. eLandia immediately annual revenues, self-reported the violations and conducted the eLandia and an internal FCPA investigation, the UTStarcom fines results of which it shared with the DOJ. were roughly two to Subsequently, Latin Node pleaded guilty three times greater to one count of violating the FCPA’s anti- in magnitude than bribery provisions. The Latin Node case those paid by is significant because it was an FCPA Alcatel-Lucent. enforcement action arising entirely from pre-acquisition conduct that was unknown FCPA Issues to the acquirer when the transaction Arising from closed. The plea agreement reveals that Mergers and eLandia received substantial credit for its Acquisitions voluntary disclosure. Given these recent FCPA cases, it is expected that merger and

6. DOJ Press Release, UTStarcom Inc. Agrees to Pay $1.5 Million Penalty FCPA violation acquisition due diligence will increasing for Acts of Foreign Bribery in China (Dec. 31, 2009); SEC Litigation Release No. 21357 liability is focus on FCPA violations. and Auditing Enforcement Release No. 3093, SEC Charges California Telecom Com- pany with Bribery and Other FCPA Violations (Dec. 31, 2009); DOJ Press Release, i n c r e a s i n g l y Latin Node Inc., Pleads Guilty to Foreign Corrupt Practices Act Violation and Agrees to Pay $2 Million Criminal Fine (April 7, 2009); SEC Litigation Release No. 21581, SEC becoming an area of Charges California Telecommunications Company with FCPA Violations (June 29, significant concern 26 2010). Renewed Focus on FCPA Reform interprets the law. On February 15, 2012, Conclusion the two Senators sent a letter to Attorney While the government has seen some General Eric Holder requesting information The pace of FCPA enforcement shows significant penalties related to FCPA fines about the benefits granted by the DOJ to no signs of slowing. Both the DOJ ($1.8 billion in 2010, and another $508.6 companies that self-report a violation and and SEC have dedicated additional million in 2011), and the number of cases cooperate with an investigation. They also resources to increase substantially their continues to grow, increasing pressure is sought, among other things, an explain FCPA enforcement activity, and they coming to bear on the government’s use from the DOJ what it considered an appear to have their eyes firmly on the of the FCPA against parent companies for adequate corporate compliance program, telecommunications industry and the the activities of their foreign subsidiaries how the DOJ interprets the terms “foreign submarine cable industry in particular. and affiliates of which the parent company official” and “instrumentality,” and the may have little knowledge. This has extent to which companies may be held Mr. Lipman is a senior resulted in a renewed focus on the FCPA liable for the actions of their subsidiaries. partner at the law firm in Congress to modify the language in In November 2011, the DOJ said it would of Bingham McCutchen, the Act to provide clearer guidelines on release further guidance on the FCPA-- LLP and Chairman of its corporate enforcement. At a January which remains pending. The Senators are Telecommunications Media 2011 hearing, Minnesota Senator Amy expected to propose legislation to clarify and Technology Practice Group. Klobuchar told Assistant Attorney General the scope of the law although no timetable Lanny Breuer she was concerned that has yet been set for any proposed FCPA companies are unsure how to comply with amendments. the new enforcement regime. Under the FCPA individuals can only be prosecuted for a “willfull” FCPA violation, but there is no similar requirement for companies. That distinction, some believe, has led to an increased scope of potential corporate criminal liability, even if no one “knew” of the illegal conduct. The law is also vague in its definition of who qualifies as a “foreign official,” (currently defined to include anybody working for an “instrumentality” of a foreign government).

Along with Senator Klobuchar, Delaware Senator Chris Coons is also seeking information from the DOJ on how it 27

Remote South Atlantic Island Lobbies For Submarine Cable Landing

29Christian von der Ropp t. Helena made its last appearance in history as Napoleon Bonaparte’s Splace of exile and death in 1821. Situated in the South Atlantic, midway between Angola and Brazil, the small British island counts as one of the most isolated settlements in the world. While its remoteness was once a blessing, it has become a curse in modern times after it lost its strategic role as fuelling station for steamships, and thus its economic sustainability.

Today, the last British Royal Mail Ship is the only vessel calling at St. Helena, docking every couple of weeks and bringing in all required goods from Cape Town, which is a five-day's sail. Despite significant budgetary aids from the UK, the 4,200 islanders face low wages and high living costs while being cut off from any educational and St. Helena by providing better education St. Helena is equipped with a modern digital employment opportunities. This caused through e-learning, better healthcare telephone network, including ADSL- an emigration wave reducing St. Helena’s through telemedicine, economic growth service, but with a single satellite link of just population by 20% in the last decade. by establishing an IT-based offshoring 10 Mbit/s for a population of over 4,000, sector and supporting tourism based bandwidth is chronically constrained. Broadband Internet access could change on reliable telecom infrastructure. The Additionally, a broadband subscription all this, and therefore a campaign called campaign is supported by many islanders with a modest data allowance of 3.3 GB “Connect St. Helena” has been kicked and “A Human Right”, an International costs a third of an average islander’s salary. off in January. This campaign is seeking NGO that advocates for the disconnected. On top of that, the island’s community to change the route of the South Atlantic They became influential for their plan faces frequent outages of all international Express cable (SAex) in order that a short to buy the TerreStar-1 satellite in order communications due to solar flares hitting unrepeatered branch to be landed at St. to serve internet-deprived regions after Intelsat 707, the serving satellite which has Helena during construction later this year. the owning company’s bankruptcy. exceeded its projected lifetime by far. “The Providing broadband Internet access could island’s development is being hindered significantly improve quality of life on by its poor communications“ writes one 30 islander on the campaign’s website www.connectsthelena.org - of the current development plant focussing only on tourism are an undeniable conclusion in times of developed nations seeking questionable, as well. Once the airport is in operation there will to bring a multiple not be more than of St. Helena’s one weekly flight total bandwidth to South Africa, into every and few islanders consumer’s home. will be able to afford tickets. In In November the end, St. Helena 2011, the UK will remain g o v e r n m e n t separated from announced the the next hospital, construction of library and an airport on St. university by 2,000 Helena worth miles and several £ 250 million. days until the next They believe this flight departs. For will attract up to such an isolated 30,000 tourists c o m m u n i t y , per year and r e l i a b l e make the island communications self-sustainable, and easy access something many to information islanders doubt would provide due to the lack enormous social of adequate and economic infrastructure for benefits, which high-end tourism most bandwidth- and strong enabled citziens competition from of the industrial other already nations can’t d e v e l o p e d even imagine. archipelagos off Africa’s coasts. Fortunately the While the airport undoubtably is a necessity, it can’t remove the outfit behind the cable, Johannesburg-based eFive Telecoms shortfalls of education and healthcare. The economic prospects quickly showed readiness to shift its proposed cable’s route to 31 the South in order to enable a landing at St. Helena, which would require an extension of approximately 50 miles and would involve costs of several million Pounds Sterling. This amount is expected to be funded by the UK government, which recognises that landing the SAex cable is a unique opportunity that could have “a very significant impact on economic development in St. Helena.” The government is now considering funding the St. Helena cable extension after an e-petition on this matter was launched in the UK by James Greenwood, a British school teacher working on St. Helena.

But the campaign is not only about St. Helena. This would be the first time a landing point of a major submarine cable has been selected solely for social reasons. St. Helena, with a population of 4,200 and some 1,000 active Internet users, won’t do much for eFive Telecoms bottom line. eFive Telecom’s outstanding social responsibility landing point, running costs for leasing Right, has an idea to mitigate this however. shown in their readiness to land the cable and maintaining infrastructure on the “There’s so much over-capacity on most on St. Helena is an unparalleld move, island will have to be born by a few submarine cables while many nations which we believe could become an example thousand customers. If the project is struggle to get online. We’re working with for future submarine cable projects. realized on a profit-oriented basis, Internet carriers to contribute to the development

access will barely become more affordable. of these places by taking their unused Although there seems to be a good chance That’s why the campaign is seeking bandwidth and putting it to work for of St. Helena becoming connected by the industrial sponsors who would support social and humanitarian causes.” The SAex cable, the campaigners fear that connecting the world’s most isolated concept called “The Bandwidth Bank” Internet access will remain prohibitively island by supplying network equipment seeks to give bandwidth grants to relief expensive and the population will remain and capacity at a discounted price. organizations, educational institutions, excluded from the information society. and others who could benefit from Even if the UK government funds the 32 Kosta Grammatis, founder of A Human it - participating companies can reap tax credits and explore new markets Despite standards of living on St. Helena an IRU on the SAex cable has reacted to while organizations on the ground are relatively high compared to many our inquiries so far. can continue their work sustainably. African regions, landing the SAex cable is believed to potentially have an Christian von der Ropp "What our campaign also tries to convey extraordinarily strong impact on the is based in Germany, has is the need for a change of thinking. a legal background and While nations’ level of development has works as an independent been measured by literacy in the last “The Bandwidth analyst and consultant in century, this century it will be the level the ICT sector with a special of information access that predetermines Bank” seeks to interest in telecom infrastructure. He people’s development opportunities. As give bandwidth campaigns for St. Helena in a voluntary we bored water wells in the past, today capacity. we also need to bore “wells of wisdom” grants to relief and provide equal information access organizations, throughout the developing world. The “Hole in the Wall” experiment of Sugatra e d u c a t i o n a l Mitra has impressively shown how Indian slum kids were able to teach themselves institutions, and not only to use a computer but even to others who could speak some basic English just by using an Internet-connected computer. More and benefit from it... more universities throughout the world put their lectures online and open design island’s social and economic development projects provide construction plans (e.g. not only because of the island’s isolation for wind turbines and even prosthetics) but because its population is natively that can be build with easily accessible English-speaking, literate and there’s a tools and materials. Unfortunately, most in high computer penetration which would need can’t access this precious information allow immediately making best use of the due to a lack of bandwidth while many potentially increased bandwidth. submarine cables rot, largely unused on the seafloor, and their potential capacity The go-ahead for the SAex cable is keeps growing with the advancements of expected for the coming weeks leaving DWDM-technology. However, connecting little time for us to obtain the British developing nations should not only government’s support and to find industry be regarded as charitable act, but as a partners. Unfortunately, none of the large stimulus to develop future markets. international carriers potentially acquiring 33 The Search for Submarine Telegraph Communications

34 Derek Cassidy t is said that Submarine over a distance. only a paper, it opened the discussion telecommunications had its birth is He used materials about communication and its transmission I1842 with the New York Harbour such as hemp medium. Communication was still only submarine cable that was laid by Samuel to conduct the possible by word of mouth or written Morse to demonstrate his new telegraph electrical current, form, but now people were looking into invention. However, this is not the case. something that we other ways of communication. The 4th It was in 1842 that the first electrically would never think communication revolution was about to insulated submarine telegraph cable of using today, begin. worked under test, but there were many because the use years of experiments and hard work to get Stephen Grey of metal had not In 1803 ,Aldini to this stage. We have to remember that yet being discovered. These experiments Galvani, a nephew in 1842 the submarine cable was, in fact, would continue by Grey and others such of Luigi Galvani an electrical cable that was designed for as Volta, Faraday and Franklin and the the famous Italian telegraph communication. We have to look use of metal and its conductive properties scientist, went at the previous few years to understand became the normal means of conducting a bit further how this technology came about and electrical energy. It must be noted that this and performed understand that the telecommunication was one of the basic foundations of the experiments to see age was powered by the age of electricity. science of electricity; it can also be said that if electrical current Without electricity, communication was it is one of the foundations in the science of could actually at a standstill and by developing means communication. be transmitted under water by the aid to extend the electrical signal and by of an insulated wire. He carried out his manipulating it, communication could be As the search for the true electrical experiments in the sea nearAldini the Galvaniport town advanced and the next step could be taken. conductor and the use of electricity of Calais on the English Channel and also If we look at the process of investigation continued, people saw the potential in this across the river Marne, near Paris. There and discovery carried out by many that and could somehow see a link between is no recorded mention of his results or aided and influenced the decision makers this and communications. In 1795, a his basis of investigation and his methods, to move in the direction that they took we Spanish theorist named Salvá discussed however, but the idea that was planted can see how the telegraph came about. We the probability of using insulated wires to was one that would drive future scientists should take it year by year to understand transmit electrical current under water so as to see if the envelope could be pushed the developments. to prove that the transmission of electrical even further. current could overcome the barrier of In 1729, Stephen Grey, an amateur water if properly insulated against the These two mentions in history tell us astronomer from Canterbury in England, earthing affects. This idea could be used that the idea of communication across first discovered that electricity could be as a simple means to communicate, and electrical wires was actively being conducted along wires and that by applying so he presented a paper to the Academy experimented with, especially under a load he could send an electrical current of Sciences in Barcelona. Although it was water. Unfortunately, no real records 35 remain of Salvá's or Galvini's other than mentions in history, so no real discussion waters and across land. These experiments was still not coined as a phrase yet). of their experiments can take place. proved that electrical conductors were also This discovery was the foundation to capable of sending electrical signals under the basic telegraph that we know today. In 1811 in Munich water and over land, which could be used This discovery, proving that magnetism Germany two in communication. was related to electrical current, would s c i e n t i s t s , have profound affects on the world of Schilling and Other people where also experimenting communications. S o m m e r i n g , with electrical conductors under water, and were actively though not all were for communications Also in the 1820’s, a chemist from Saxony i n v e s t i g a t i n g purposes, their experiments would advance in Germany, Johann Schweigger, was whether electrical the cause and science of communication. investigating the uses of electromagnetism. current could Just like electricity, communication along In applying the laws of electrical current travel under wires needs an electrical current to drive he discovered that Paul Schilling water if properly the signal, so these experiments actually increasing the insulated. There investigations were went hand in hand. People such as John number of turns based around the need to send electrical Robert Sharpe, who in 1813 successfully in a coiled spring signals across country without rivers or transmitted electrical current along several also increased lakes being a barrier. They knew that the miles of insulated conductor under a the sensitivity so electrical conductor needed to be insulated lake, proved that once the conductor was much that any from the water, so they used a form of properly insulated the water had no effect. electrical current rubber as the insulation material. This This insulation was capable of keeping applied would be was a primitive form of India rubber, but the electrical current isolated from the represented by a it foretold the use of Gutta Percha, which earthing affects of the water. Johann Schweigger needle moving at became the insulation material in the latter the other end of the electrical circuit. By part of the 19th century. This is also the first In 1816, Frances Reynolds investigated applying the electrical current in a coded mention of a rubber insulation material the idea of using the recent electrical fashion the needle at the far end would in any experiments. Their investigations discoveries to transmit signals for use move in a certain direction as directed and experiments proved so successful in telecommunications. He was the first by the operator. This devise he called a that, in 1812, Schilling successfully sent to fully demonstrate and example of Galvanometer after Luigi Galvani. It was an electrical signal across an insulated a very early form of the telegraph. In this galvanometer design that lead Lord electrical conductor that was laid across 1820, Christian Oersted, the discoverer Kelvin to develop the famous mirror the river Neva near St. Petersburg in of Electromagnetism, proved that by galvanometer 40 years later that was used Russia. The electrical signal sent was manipulating electrical current the for submarine cables. one that would ignite gunpowder on the electromagnetism induced would move opposite bank, and at a distance from the the needle of a compass, proving that Schilling, who had already investigated river, extending the conductor out of the some sort of telecommunications could the use of electrical current travelling 36 take place (although telecommunications under water in an insulated conductor, was also interested in ways to represent Colonel Pasley used an electrical conductor to send words down a cable and across the information sent. He studied with a primary insulation of tarred rope continents as electrically driven signals. the galvanometer, as discovered by and a secondary insulation of yarn that is The operator or receiver at the far end Schweigger, and attached discs that were covered in Pitch. This proved effective as would decode the electrical pulses into black and white. By the moving needle of the experiment did not notice any drop in words and so the submarine telegraph the galvanometer the disks also moved and voltage across the circuit when is use. Dr cable was born. they represented letters in the alphabet. William O’Shaughnessy had used a wire This was a primitive form of telegraphy. covered in tar and pitch enclosed in a split Derek Cassidy is from ratan and then insulated with yarn covered Dublin, Ireland. He has It was Samuel Morse who in 1836 moved with tar. He used this wire to conduct worked for 17 years in away from painting and directed his experiments across the river Hugli in West the telecommunications attention towards the development of a Bengal, India. His successful experiments industry of which 15 years communication system that could transmit were recorded in a scientific journal. have been spent dealing with information to a far end. He investigated optical terrestrial systems and submarine Schillings theories and, with the aid Samuel Morse developed his new code networks. He is currently leading the of others, produced the first telegraph over the following years and was successful Optical Engineering and Submarine system. He called it the Morse code, but as in demonstrating the transmission of technology areas which support BT yet had no patent for it. telegraph signals from Governor’s Island Ireland and the wider BT Global business. to Battery Park under New York Harbour He is currently a member of the IET, IEEE, Between 1838 and 1839, Colonel Pasley in 1842, the first successful telegraph cable, Engineers Ireland, EOS & OSA and has and Dr William O’Shaughnessy separately albeit for one day. It was only in 1844, with Degrees in Physics/Optical Engineering, conducted experiments with insulated the aid of Alfred Vail and a court ruling, Structural/Mechanical Engineering and conductors using the new Morse code. that he was awarded the patent for the Engineering Design. Their experiments were technically new electrical set of pulses that would the first that become the communication system called investigated the Morse code. The telegraph using the use of insulated communication called Morse eventually wire carrying became the standard. This new code was electrical signals made up of dots and dashes that where under water, actually the electrical circuit being turned seeing if the new off and on, each short circuit connection, telegraph system made by the telegraph operator tapping could be extended the circuit on/off would be a dot and each across rivers, lakes longer circuit connection would be a dash. and even seas. It was simple, but in the 18th century it was William O'Shaughnessy a revolutionary idea that made it possible 37 Submarine Cable Maintenance from Mess to Mesh?

Keith38 Schofield sk a submarine cable operator, and maintenance is rapidly being seen as a cost, revival in marine facilities needed to replace there’s only one thing that he will not an insurance policy or an investment. the world’s ageing cable maintenance fleet. Alike less than normal operational The market is almost broken. Maintenance expense: the cost of breakage and repair. Does this mean that carriers do not care providers and carriers ultimately know When a fault occurs (through failure or anymore about the resilience of their that broken links need fixing. Buoyed by more likely, external aggression) there has networks? Not at all. They want their this, the private maintenance providers are to be someone there to fix it. Over many networks to be faster (lower latency), leading the charge to re-boot the world’s decades, an ecosystem of cable maintenance more available (reliable) and more cost maintenance fleet by offering ways of providers has developed to take care of effective (cheaper). If their customers offsetting the cost of leaving vessels in those breakages. But something is quietly aren’t pressurizing them into this, their port on standby while systems are fault going wrong. The number of cables is competitors will soon do it. free. The zone maintenance arrangements increasing yet the number of vessels to fix are grappling with the same issue, but all them is reducing. As Alex Hawkes of ‘Capacity1’ so the while this is happening, the world’s eloquently put it: “In essence, the carrier maintenance vessel fleet is ageing, and What Carriers Think about Submarine market faces an identity crisis as it looks to the world’s supply of talented personnel Cable Maintenance other forms of revenues to supplement this to deliver fast repairs is constantly under potential loss in the value of capacity.” negative pressure. International Carriers are having a tough time making money these days. Squeezed Built, Broken, Buoyed, Booted. Now there is a new opening for a third by their customers, they are looking for kind of player—the ‘spot’ maintenance any and every way to cut operational What has been the maintenance market’s provider, possibly operating in an costs. Some are in a battle with some of response to this crisis in delivering value ‘insurance-backed’ scheme. It remains to their key clients—the content providers. from the built network? In essence, the be seen whether they can prise carriers Some content providers are entering the lack of funds has caused the availability away from the security of known zone and submarine cable market to control their of maintenance vessels to shrink while the private arrangements. Just as importantly, own capacity and in some cases end their world’s stock of submarine cables expands. they must persuade conventional owners reliance on international carriers. In response, both private and zone (sometimes with justly conservative views) maintenance arrangements have sought that the right people, vessels, processes and The former divisions between who owns to become more flexible and effective, but equipment can be entrusted to maintain ‘transport’ and ‘content’ are blurring. right now, they are expressing their concern their networks on an ad-hoc basis. They Carriers are constantly revisiting their cost about how we will all pay for the structural may succeed, but it’s a tough sell. 39 base, and the bottom line is that marine 1. “Capacity” Vol12 Issue 4, Feb 2012. It’s like we all want insurance as long as Whatever we think the solution is, it the current maintenance vessel numbers we do not pay the premium! is bad business to leave broken links are not in a position to match that growth. on the seabed. Ultimately, ‘Mesh’ and Clearly there will be an unfilled gap which In Pioneer, we are increasingly seeing ‘Maintenance’ complement each other in will only get worse unless ageing vessels approaches from people willing to consider such a diverse marketplace. are kept in the market, or unless it could be alternatives that will tailor the services to filled by ‘efficiency savings.’ The trouble is: their needs. Fortunately for the carriers, What’s the scale of the problem? while the market has got used to orders of there are experienced resources out there magnitude capacity increases each decade (whether it be from consultants like For years Pioneer has been observing and in submarine cables, it has not come to Pioneer, or from the maintenance vessel reviewing the resources in the market. terms with the fact that essentially the operators) to help navigate through these Matched with our carefully researched same marine facilities (requiring expert uncharted waters. forecasting and trend analysis for the resources) repair those cables. growth in operational cable kilometers, for Mesh or Maintenance—Which will win? the first time we have been able to turn our Figure 1 –Forecast Global Maintenance attention to the likely forthcoming gap in Vessel Demand Maybe technology can save us. At landing the maintenance vessel marketplace. If we points or PoPs, submarine cables are being were to make the very optimistic assumption While mesh networking may bring a ‘soft networked together to offer the prospect of that no ageing maintenance vessels will be landing’ to this problem for the larger incredibly improved resilience. Network taken out of providers such as Ciena are showing the market in carriers how to integrate their existing the next four diverse routes into a single, self-healing years, Figure mesh-networked entity that can survive 1 illustrates breakages by automatically re-routing the impact traffic. This dangles the tantalizing prospect that the that repairs could be timed to coincide with anticipated the availability of resources to make them, g r o w t h and reduce reliance on ‘stand-by’ of what in cable some consider to be largely unused marine kilometers maintenance facilities. will have on the Carriers operating ‘thin,’ unmeshed or requirement non-diverse routes may not have that for cable choice. For them, it’s maintenance over vessels, and mesh every time. i l l u s t r a t e s the gap if 40 carriers who have diverse routings, what could see a seven ship gap based on current • Insurance based options could have a will happen to the smaller players with assumptions of vessel availability. place in low fault zones but they still fewer ‘mesh’ options? Might we see some require the services of a cable repair carriers (or even governments) feeling the The topic of the shape of the future vessel and its crew, or a vessel of need to intervene to arrange ‘security of submarine cable maintenance marketplace opportunity and the associated bolt supply?’ will be the subject of Pioneer’s presentation on equipment and specialist cable at the April ICPC Plenary in Lisbon, where handling, testing and jointing personal The fact that cable systems are dramatically the right people will be in one place (who for obvious reasons won’t be more upgradeable than they were just 15 to address how these concerns will be sitting at home waiting for a cable short years ago means that the economic resolved. If you cannot be there, please feel failure). lifetime of cable systems is now back on free to call us after the event to see what the increase. With upgrades, many systems transpired. • Zone Maintenance offers an insurance implemented in the last ten years could policy against cable faults; what maybe see themselves as remaining economically Zone vs Private vs Spot Maintenance is required is that cable owners or MA’s viable for up to a further 25 years. need to accept that not all cables carry In January 2012, this topic was recently the same fault risk and can develop What’s the scale of the problem? Today, the debated in the Submarine Cable Systems pricing within their zone offering problem remains almost imperceptible and Group of LinkedIn, as the following accordingly. little more than an irritation—we’re only summary contributions indicate. Visit the one ship short of what we need to maintain group online to read additional debate • The possibility of allowing interruptible the 2011 level of marine maintenance cover. details. outside work offers the opportunity to Follow the trend through to 2016 though reduce baseline cost, but what is the and it looks much less likely that the issue • Some stated that not only are the appetite of the owners collectively to can be solved by efficiency savings. We cable owners responsible for securing accept increased risk? maintenance ships ready to make repairs, but all the attendant skills are There will always be a debate on the needed: experienced deck officers, relative merits of zone, private and ROV operators and jointers/testers as spot maintenance arrangements (or the well. There is a feeling that few carriers meaning of ‘insurance’ as applied to cable want to pay the true cost of marine maintenance). The question is: will the maintenance repairs. In Southeast Asia, industry be able to come to a new deal there is a more long term view, but this that accommodates the economics that is very much the exception and the maintains the excellent provision our ultimate outcome will be less repair forebears took for granted? tonnage and as they are closely linked, fewer qualified people. 41 Who will fill the Gap? afford what is already on offer (whether it For the future, the market must decide to be zone or private maintenance), let alone what extent the fundamental model for There is currently an ecosystem already to pay for the improved maintenance assets maintenance has to change to eliminate the there which supports both zone and private that will become necessary as the global emerging maintenance gap. maintenance alternatives, and ultimately, fleet of telecom maintenance assets ages or today, the cable owners decide which is in has to be replaced. Will the carriers or content providers end their best interests. up having to take control by owning or To bridge the gap, those providing controlling their own maintenance assets Of great concern is what we hear from maintenance (and those who provide again? Perhaps we will see maintenance carriers—that with the cost structures they professional advice) must help both the vessel(s) out there, funded and protecting are now facing in terms of earning revenue carriers and ultimately their customers the network owned by Google, Facebook, from their cable assets (out of which any realize and deliver increased value Apple or Microsoft, so we can all continue operation and maintenance must be through the expertly provided (but ageing) to benefit from the reliable business and funded), they are finding it difficult to maintenance solutions now available. recreation we have all come to expect from the internet!

Where the debate will start and end: ‘Who pays to fill the gap?’

You can discuss this topic further with Keith as he will be at the ICPC Plenary 2012 meeting on April 18, 2012 presenting: Bridging the Maintenance Gap: How will submarine telecom cables be maintained in 2020?

Keith Schofield, is the Managing Consultant and Director of Submarine Networks for Pioneer Consulting. He is a seasoned commercial development director and general manager of complex telecommunications infrastructure projects. He has more than 27 years’ experience of successfully implementing consultancy programs in the submarine fiber 42 optics industry. his Spring, SubTel Forum will release its second annual Submarine Cable Almanac. This Submarine Cable Cable Submarine 21495 Ridgetop Circle, Suite 201 | Sterling, VA 20166, USA perfect bound book serves as complement to our Submarine Cable Map and features each major international system on its own page, along with a system map, landing points, system submarine cable capacity,T length, RFS year and other valuable data. The Almanac also includes full-color adverts from some of the most important players in the industry. The Almanac is shipped, free of charge, to our subscriber list, including senior government and international organization officials, telecom company executives and team, support and supply company management, and technical, sales and Compliments of ALMANAC purchasing staff, field and shipboard personnel, academicians, consultants, financiers, and legal 2011 edition specialists. Adverts should be provided in Press Quality PDF format and should include crop marks. Almanac - - Almanac Advertising Inquiries: Sicking, Wilhelm Nielsen, Kristian Sales Representative, Sales Manager Europe, Middle East & Africa 2011 edition 2011 [email protected] [email protected] Tel: +1 (703) 444-0845 Tel: + 49 (0) 201-779861

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Almanac ads due: 25 March 2012 Back Reflection by Stewart Ash or nearly one hundred years, since technical setbacks and significant financial the company’s debts, although he had no its inception in 1850, the submarine losses that were incurred. legal obligation to do so. Shortly after this cable industry was predominantly failure, Field formed, in partnership with F Cyrus W Field was born a British story; however, there is little his brother-in-law, a paper manufacturing th doubt that one of its founding fathers on 30 November 1819 in company, called Cyrus W Field & Co. and the driving force behind the first Stockbridge Massachusetts, This company was established to take Atlantic telegraph cable was an American the sixth son and the seventh advantage of the rapidly growing “penny businessman and financier. That man was of nine children of a puritan press” market and the increasing demand Cyrus West Field (1819 – 1892). On 10 clergyman David Dudley for paper for stocks and bonds. By 1853, March 1854, Field formed the “New York, Field and Submit née Dickinson. At the he had amassed a large personal fortune Newfoundland and London Telegraph age of 15 he left school and moved to New and had paid off the debts of E Root & Co Company” with four other New York York where he became a clerk and errand in their entirety. He now had a large house businessmen: Peter Cooper (chairman), boy in a large dry goods store, A.T. Stewart at 1 Lexington Avenue in Gramercy Park, Moses Taylor (Treasurer), and Marshall O & Co. He worked there for three years and New York and was one of the wealthiest Roberts and Chandler White (directors). then moved to Lee Massachusetts where men in the city. At that point he took the The company was launched with a capital he worked in a paper mill, for two years decision, at the age of 34, to retire from of $1,500,000 and its genesis marked the with one of his elder brothers, Matthew active business. first tangible step in the famous adventure Dickinson Field (1811 – 1870). In 1840, Field that was the Atlantic Telegraph. Although set up in the paper business for himself in After Field retired, he chose to sponsor the majority of the money and virtually all Westfield Massachusetts where, at the end and accompany the Connecticut born of the engineering came from Britain, it was of that year he married Mary Bryan Stone. painter, Frederic Edwin Church (1826 – Field’s vision, enthusiasm and tenacity, He very quickly became a partner in E 1900), on the first of many trips Church over the next twelve years that kept the Root & Co, a New York wholesale paper made to South America. Field planned project moving forward, despite the many dealer, but within 12 months this business to use Church’s paintings to encourage 44 had failed and Field personally took on investors in a number of South American projects he was considering. It was on which could then be relayed to North the “Newfoundland Electric Telegraph his return from this six month trip that American newspapers, thus delivering Company” was incorporated in New his brother Matthew introduced him to the news 24 and 48 hours earlier than York, with local financing. While in Frederick Gisborne and his obsession with transatlantic steamers arriving in Halifax New York, Gisborne learned of the 1850 the Atlantic Telegraph began. and New York respectively. and 1851 English Channel cables and so he sailed to England where he met John Frederick Newton Gisborne In early 1851, Gisborne commenced his Watkins Brett (1805 – 1863) and his brother (1824 – 1892), was an attempt to turn this idea into reality Jacob to discuss the channel cables. While Englishman, born in by applying to the Newfoundland in England he purchased a length of Broughton Lancashire, who Government for permits to build his submarine cable from Newall & Company. had for many years travelled telegraph system. His applications were In November 1852, this cable was laid by the the world. By 1845, he had approved and, in the summer of 1851, Ellen Gisborne, across the Northumberland reached Canada where he took a job on a Gisborne resigned as chief office of the Strait, between Tormentine, New farm in St Eustache, Quebec. After a year, Nova Scotia Telegraph Company to begin Brunswick and Charleton Head, Prince he quit farming altogether and took up implementing his plans. The first stage Edward Island. This was North America’s a position with the Montreal Telegraph was to construct a land cable from St John’s first commercial submarine cable of Company. He became an expert in to Carbonear, which was completed and any note. The construction of the Cape telegraphy and founded the British North went into service on 6 March 1852. Ray terrestrial cable commenced in the America Electric Telegraph Association Gisborne’s initial plans had included a summer of 1853; however, after only 40 with the expressed purpose of extending miles had been installed, the New York telegraph communications from Montreal cable across the Cabot Strait, so he applied to the Nova Scotia government to land a backers pulled out, the company became to the east coast of Canada. While head insolvent and Gisborne went bankrupt. of this association he supervised the cable at Cape North. However, the Nova construction of 112 mile telegraph line Scotia Government took the view that In early 1854, Gisborne went to New from Quebec City to Revière du Loup. As Gisborne’s telegraph, if built, would take York to visit a financier, Horrace Tebbets, Gisborne’s career in telegraphy progressed valuable telegraph forwarding business to try and convince him to support his he developed an idea for extending the away from Halifax and so his application project, but Tebbets was not interested in telegraph network further east to St. was denied. Gisborne came up with an investing. Gisborne resigned himself to John’s, Newfoundland, North America’s alternative routing for a submarine cable failure; however, while still in New York, most easterly city. Gisborne’s concept was from Cape Ray to Prince Edward Island he chanced to meet Matthew Field at Astor based on the increasing demand for news and then on to New Brunswick. Although House, who introduced him to his brother from Europe. Gisborne reasoned that the required length of submarine cable Cyrus; and the rest, as they say, is history. extending the North America Telegraph to was greater than the original plan, the St Johns would make it a major terminus overall route length from Newfoundland for transatlantic news. Steamers would to New York would be shorter. Gisborne dock at St John’s and drop off the news, now needed to build a cable from St John’s 45 to Cape Ray and so in the spring of 1852 46 Global Submarine Cable Forum 26-28 March 2012 London, UK Conferences Website

ICPC Planery Meeting 17-19 April 2012 Lisbon, Portugal Website

Submarine Networks World Africa 2012 21-24 May 2012 Johannesburg, South Africa Website

Submarine Networks World 2012 11-13 September 2012 Singapore Website

SubOptic 2013 22-25 April 2013 Paris, France Website

47 Advertisers Index ISSN 1948-3031 Huawei Marine Networks www.huaweimarine.com 6

Issue Themes: Nexans www.nexans.com 28 January: Global Outlook OFS www.ofsoptics.com 4 March: Finance & Legal SubOptic www.suboptic.org 20 May: Subsea Capacity July: Regional Systems WFN Strategies www.wfnstrategies.com 46 September: Offshore Energy November: Subsea Technology

Advertising enquiries:

Sales Manager Kristian Nielsen Tel: +1 (703) 444-0845 Email: [email protected]

Sales Representative, Europe, AFRICA, Middle east Wilhelm Sicking Tel: + 49 (0) 201-779861 Email: [email protected]

Copyright © 2012 Submarine Telecoms Forum, Inc. 48 by Kevin G. Summers

'm still using an iPhone 3. While the that you, Constant Reader, are also in newer models have tempted me since possession of a smart phone. If not, the rest Itheir release, the little contract I signed of this Coda is going to be pretty boring. with AT&T back in 2010 has always stopped But if the answer is yes, then I have some me from upgrading. I have this thing about good news for you. paying out money for breaking contracts that has ensured that I'll be on my older SubTel Forum now has a mobile website! model iPhone until May 2012. By that time, visit our mobile site I could be upgrading to an iPhone 5. I've If you visit www.subtelforum.com on your even considered going back to the dark ages iPhone, Android or other mobile device, of the early 2000s and using a dumb phone. you can access our mobile site. It contains all of the same great SubTel Forum content, One thing that I would miss if I went this but now it is formatted for easier use. route would be access to the internet in boring places. You know, the doctor's office Check it out today or the next time you are (do you smell snake oil?) or the line at the standing in line at the coffee shop. And as grocery store (does this contain pink slime?) always, thanks for reading! or in a staff meeting (sorry Wayne, what did you say?). I would also have to go back to subtelforum.com carrying a phone and an iPod since I don't go anywhere without an audiobook.

As someone that works in the telecommunications industry, I'm assuming

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