Isobel Asher Hamilton
July 23, 2023
If you’re an avid reader of The Daily Upside (and why wouldn’t you be?) you might have noticed that the US and China have been attempting some kind of detente. The making-up process has been extremely piecemeal, and on certain topics — the most high-profile being semiconductors — the two sides continue to needle each other.
But the US and China have been waging another, potentially more intractable war deep at the bottom of the ocean. The US has been quietly trying to push China out of the ever-more-sprawling infrastructure of subsea internet cables, the physical infrastructure that transports unimaginable quantities of data between continents.
Today we’ll dive deep into the tangled world of subsea cables, the various powers who desperately want to dominate it, and what that means for the internet as we know it.
Hello, Operator
The grandparents of today’s submarine fiber-optic cables originated in the 19th century, when countries built undersea telegraph cables to bridge the gap between continents. The cost to build and use these cables was eye-watering — in 1860, a 10-word message from the US to England cost $100, or $3,676 in today’s money. And you thought your broadband bill was bad.
Today, more than 400 internet cables with a combined length of around 800,000 miles criss-cross the ocean floor. Inside those cables, most of which are about as thick as a garden hose, sit bundles of glass wires, thin as a human hair, through which lasers pulse beams of light that are amplified by strategically placed devices called repeaters.
These cables are sometimes called the backbone of the internet, and while cloud data storage and shiny constellations of internet satellites are on the rise, they can’t match cables for sheer volumes of data transported. Elon Musk’s Starlink is more about beaming internet down to remote parts of the world than becoming an information superhighway. “They aren’t going to handle carrying hundreds of terabits between continents. That’s only cables,” Alan Mauldin, research director at telecoms research firm TeleGeography, told Wired.
Just how essential subsea cables are to the internet’s continued existence in (and control over) our lives is evidenced by the entities that are now racing to expand their presence on the seafloor.
If you’re an avid reader of The Daily Upside (and why wouldn’t you be?) you might have noticed that the US and China have been attempting some kind of detente. The making-up process has been extremely piecemeal, and on certain topics — the most high-profile being semiconductors — the two sides continue to needle each other.
But the US and China have been waging another, potentially more intractable war deep at the bottom of the ocean. The US has been quietly trying to push China out of the ever-more-sprawling infrastructure of subsea internet cables, the physical infrastructure that transports unimaginable quantities of data between continents.
Today we’ll dive deep into the tangled world of subsea cables, the various powers who desperately want to dominate it, and what that means for the internet as we know it.
Hello, Operator
The grandparents of today’s submarine fiber-optic cables originated in the 19th century, when countries built undersea telegraph cables to bridge the gap between continents. The cost to build and use these cables was eye-watering — in 1860, a 10-word message from the US to England cost $100, or $3,676 in today’s money. And you thought your broadband bill was bad.
Today, more than 400 internet cables with a combined length of around 800,000 miles criss-cross the ocean floor. Inside those cables, most of which are about as thick as a garden hose, sit bundles of glass wires, thin as a human hair, through which lasers pulse beams of light that are amplified by strategically placed devices called repeaters.
These cables are sometimes called the backbone of the internet, and while cloud data storage and shiny constellations of internet satellites are on the rise, they can’t match cables for sheer volumes of data transported. Elon Musk’s Starlink is more about beaming internet down to remote parts of the world than becoming an information superhighway. “They aren’t going to handle carrying hundreds of terabits between continents. That’s only cables,” Alan Mauldin, research director at telecoms research firm TeleGeography, told Wired.
Just how essential subsea cables are to the internet’s continued existence in (and control over) our lives is evidenced by the entities that are now racing to expand their presence on the seafloor.
(Photo Credit: Ian Bell/Flickr)
The Silicon Valley Slide
State-sponsored telecom companies used to be the driving force behind cable projects, which are often done through a consortium of international companies banding together to build and lay a cable. Increasingly, however, Big Tech companies are gaining market share.
Google first dipped its toe into undersea cable infrastructure in 2008 when it invested in a consortium for a $300 million cable to link Japan with California. Meta, Amazon, and Microsoft followed suit, chipping into cable projects. According to TeleGeography as reported by Rest of World, the Big Tech giants only owned a stake in one cable in 2010, but by 2021 they owned a stake in more than 30.
Lane Burdette, a research analyst at TeleGeography, told The Daily Upside that the Big Tech companies’ roles as content providers and traffic juggernauts is a big reason why they got into subsea cables:“Over the last ten years, the amount of bandwidth consumed by a few companies — like Meta, Google, Microsoft, or Amazon — has grown from 13% to 71%,” she said, adding: “Because these few companies create so much demand, they have recently taken a larger role in determining where and how new systems are built.”
The opportunity for tech companies is twofold: one, they can hook up underserviced parts of the world and get more eyeballs on their platforms, and two, they can use their cables to do deals with other cable operators. They’ve thrown themselves into transatlantic cables with particular gusto. “Of planned trans-Atlantic cables entering service in the next two years (so from 2023-2025), content providers account for 94% of overall investment.”
Sharing isn’t Caring: In 2018, Google announced it was abandoning the traditional cable consortium funding model and would fully fund and own any new cables it laid. That might sound like your common-or-garden Big Tech company trying to gain dominance over vital infrastructure (and it’s not not that) but it also doesn’t mean the cables will only be used to send Gmails across the sea. “What tends to happen is they will swap capacity on this cable with parties with capacity on other cables,” Mauldin told Wired. “What effectively happens is you might see that Google has built one cable on a certain route but they can leverage that by using that as a means of exchange.”
It’s also not the worst thing to have cables with nice, simple ownership models, as the fractured ownership in subsea cables has led to a pretty snarled up corporate and geopolitical yarn-ball.
Cable-Tapping
As impressive as undersea cables are, they’re also pretty vulnerable. They’re often broken by stray boat anchors, and they can be severed by natural disasters. The island nation of Tonga spent five weeks in early 2022 with virtually no internet after the eruption of the Hunga Tonga-Hunga Ha’apai volcano broke the subsea cable connecting the country to the outside world. On top of clumsy ships and acts of God, there are also worries about potential sabotage, especially at geographic points where cables are concentrated, like around Egypt’s Red Sea.
Then of course, you have worries about espionage and even sabotage — and this is where we come back to US vs. China. Reuters reported in March that the US government intervened in a consortium for a $600 million Singapore-to-France cable called SeaMeWe-6 (catchy, we know) to box out a Chinese company called HMN Tech, which was awarded the contract to manufacture and lay the cable in 2020. Eventually, the consortium abandoned HMN Tech in favor of an American company called SubCom.
This is a subtle continuation of an earlier policy of mistrust toward cables with links to China, which has even disrupted projects with investment from Big Tech. One project, in which both Meta and Amazon were invested, was re-conceived without Chinese investment but was still abandoned even after 12,000 kilometers of cable had already been made, one source told the Financial Times in June. “There are hundreds of millions of dollars sunk in the Pacific,” the source said.
While the US has been pretty effective at cold-shoulder-barging Chinese companies out of projects, industry insiders told the FT that the result could be China building cables solely with its allies, leading to a bifurcated global information infrastructure. “China is able to lead projects in some Asian, African and Latin American countries, mainly because state-owned telecom companies can fight price wars well,” a Chinese government source told the FT.
If there were a serious attack on cables connecting one continent to another — by whichever side — it would be difficult to counter. The cables’ fragmented ownership and leasing of capacity to one another could make it very difficult to figure out which cables are used for what exactly, and information about how much horsepower private companies have put into security is pretty minimal.
Worries about geopolitical grumpiness leading to spying or even sabotage is a specter for businesses as much as governments. Per the FT, undersea cables ferry $10 trillion in payments on a daily basis. A source at a London finance firm told the FT the company has already started planning for a worst-case scenario.
Unless the US and China find a way to de-escalate tensions under the sea, more companies might start drawing up emergency plans to counter half of the world’s cable networks suddenly going offline.
The Silicon Valley Slide
State-sponsored telecom companies used to be the driving force behind cable projects, which are often done through a consortium of international companies banding together to build and lay a cable. Increasingly, however, Big Tech companies are gaining market share.
Google first dipped its toe into undersea cable infrastructure in 2008 when it invested in a consortium for a $300 million cable to link Japan with California. Meta, Amazon, and Microsoft followed suit, chipping into cable projects. According to TeleGeography as reported by Rest of World, the Big Tech giants only owned a stake in one cable in 2010, but by 2021 they owned a stake in more than 30.
Lane Burdette, a research analyst at TeleGeography, told The Daily Upside that the Big Tech companies’ roles as content providers and traffic juggernauts is a big reason why they got into subsea cables:“Over the last ten years, the amount of bandwidth consumed by a few companies — like Meta, Google, Microsoft, or Amazon — has grown from 13% to 71%,” she said, adding: “Because these few companies create so much demand, they have recently taken a larger role in determining where and how new systems are built.”
The opportunity for tech companies is twofold: one, they can hook up underserviced parts of the world and get more eyeballs on their platforms, and two, they can use their cables to do deals with other cable operators. They’ve thrown themselves into transatlantic cables with particular gusto. “Of planned trans-Atlantic cables entering service in the next two years (so from 2023-2025), content providers account for 94% of overall investment.”
Sharing isn’t Caring: In 2018, Google announced it was abandoning the traditional cable consortium funding model and would fully fund and own any new cables it laid. That might sound like your common-or-garden Big Tech company trying to gain dominance over vital infrastructure (and it’s not not that) but it also doesn’t mean the cables will only be used to send Gmails across the sea. “What tends to happen is they will swap capacity on this cable with parties with capacity on other cables,” Mauldin told Wired. “What effectively happens is you might see that Google has built one cable on a certain route but they can leverage that by using that as a means of exchange.”
It’s also not the worst thing to have cables with nice, simple ownership models, as the fractured ownership in subsea cables has led to a pretty snarled up corporate and geopolitical yarn-ball.
Cable-Tapping
As impressive as undersea cables are, they’re also pretty vulnerable. They’re often broken by stray boat anchors, and they can be severed by natural disasters. The island nation of Tonga spent five weeks in early 2022 with virtually no internet after the eruption of the Hunga Tonga-Hunga Ha’apai volcano broke the subsea cable connecting the country to the outside world. On top of clumsy ships and acts of God, there are also worries about potential sabotage, especially at geographic points where cables are concentrated, like around Egypt’s Red Sea.
Then of course, you have worries about espionage and even sabotage — and this is where we come back to US vs. China. Reuters reported in March that the US government intervened in a consortium for a $600 million Singapore-to-France cable called SeaMeWe-6 (catchy, we know) to box out a Chinese company called HMN Tech, which was awarded the contract to manufacture and lay the cable in 2020. Eventually, the consortium abandoned HMN Tech in favor of an American company called SubCom.
This is a subtle continuation of an earlier policy of mistrust toward cables with links to China, which has even disrupted projects with investment from Big Tech. One project, in which both Meta and Amazon were invested, was re-conceived without Chinese investment but was still abandoned even after 12,000 kilometers of cable had already been made, one source told the Financial Times in June. “There are hundreds of millions of dollars sunk in the Pacific,” the source said.
While the US has been pretty effective at cold-shoulder-barging Chinese companies out of projects, industry insiders told the FT that the result could be China building cables solely with its allies, leading to a bifurcated global information infrastructure. “China is able to lead projects in some Asian, African and Latin American countries, mainly because state-owned telecom companies can fight price wars well,” a Chinese government source told the FT.
If there were a serious attack on cables connecting one continent to another — by whichever side — it would be difficult to counter. The cables’ fragmented ownership and leasing of capacity to one another could make it very difficult to figure out which cables are used for what exactly, and information about how much horsepower private companies have put into security is pretty minimal.
Worries about geopolitical grumpiness leading to spying or even sabotage is a specter for businesses as much as governments. Per the FT, undersea cables ferry $10 trillion in payments on a daily basis. A source at a London finance firm told the FT the company has already started planning for a worst-case scenario.
Unless the US and China find a way to de-escalate tensions under the sea, more companies might start drawing up emergency plans to counter half of the world’s cable networks suddenly going offline.
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