Underwater Peril

The telecom industry is on notice after Asian quakes sever deep-sea cables

On Dec. 31, the Tyco Durable, a 420-foot repair vessel steaming south from Japan, reached the spot two miles above the Pacific Ocean floor where days earlier earthquakes had snapped eight undersea cable systems that make up much of the telecommunications lifeline for Asia. Aided by a navigation system that plotted the location of the fault, the crew lowered an anchor line with a specially designed grapnel hook on it. They located the 4-inch-thick cable, snipped it and dragged the severed end to the surface. The Durable's crew members expected to find the other end of the broken line over the next few days, so engineers could splice the two ends with a new strand of cable and get communications flowing again.

With these maneuvers, repairs began for one of the worst outages in telecom industry history. After earthquakes struck on Dec. 26, rock slides took out cables near Taiwan. Like dominoes, telephone and Internet networks toppled in Taiwan, China, South Korea, Japan, and India. Millions of calls couldn't be made, countless Web pages couldn't be opened, and online stock trades couldn't be consummated. Repairs could cost between $500,000 and $2 million per cut line, and it will likely be a month before all of the cables are fixed.

RISING PRICES

For all the excitement about broadband, Wi-Fi, and mobile networks, this latest incident shows how surprisingly dependent the world's data are on submarine cables that snake through canyons on the ocean floor where they're vulnerable to fishermen's nets, ship anchors, and earthquakes. The risk is highest in the Pacific, the most seismically active part of the globe. With China becoming the world's manufacturing hub and India its software mecca, Asia is booming and network traffic is exploding. Yet today's undersea networks aren't up to the job. "Asia is already short on capacity," says Todd Underwood, chief operating officer at Renesys Corp., a Net monitoring company. "This is going to be a long-term deal, and it will impact a lot of global companies."

The incident comes at a time when the huge glut of communications capacity built up during the dot-com era has finally been worked off. Prices for transpacific services are rising for the first time in half a decade. Monthly leasing prices have jumped 10% to 25% over the past year depending on the route, according to TeleGeography Research Group, which tracks undersea cable trends. "The period of rapid price declines is over in much of Asia. We may see modest price increases in the next year," says analyst Stephan Beckert of TeleGeography. He forecasts increases of 5% to 10%.

Relief is on the way, but it will take time to arrive. Three operators have major transpacific systems in the works. Two are to be finished by the end of 2008, while the third is due in 2009. Projects like these each cost anywhere from $500 million to $1.5 billion and are often financed by consortia.

"RING OF FIRE"

One of those new Pacific systems is part of a massive $1.5 billion global build-out connecting 60 countries by India's FLAG Telecom. "We're building a global `infobahn.' We're encircling the world with fiber loops so you have a lot of interconnectivity and a lot of resilience," says FLAG Chief Executive Punit Garg.

Laying undersea cable systems is a monumental process. After surveying landing sites, studying seabed geology, and assessing risks, engineers plot a route. A company like Corning delivers strands of fiber-optic glass to a manufacturersay, Tyco Telecommunicationswhich encases the fiber in metal. Then gigantic spools of cable, repeaters that transmit signals long distances, and other gear are loaded on cable-laying vessels. For months, the ships lower the cables thousands of feet to the seabed. In congested spots, engineers use robots to dig trenches for the cable that protect it from wayward anchors and fishing nets. Then crews haul the cable ends above water and connect them to land-based stations.

Until these new cable systems get lit up, telecom planners will be worrying about the next major Pacific quake. Place a map of the region's major fault lines over one showing the cable routes, and you see that nearly every cable crosses one or more faults. "This is a highly active area. It's the ring of fire, where earthquakes are concentrated," says Randy Baldwin, a geophysicist with the U.S. Geological Survey in Golden, Colo. On average, there are 18 "major" or "great" quakes a year, many of them in the Pacific.

Operators building new cable systems are mindful of the earthquake threat and do what they can to avoid it. The new Asia-America Gateway, running from Southeast Asia to the U.S., is being routed to the south of the most active seismic zones. And the Transpacific Express, which is being built by Verizon Communications Inc. (VZ ) and five Asian partners, including China Telecommunications Corp., takes advantage of the latest in undersea engineering. Traditional cross-ocean systems are loops made up of two cables, usually many miles apart. The Transpacific Express will use "mesh" systems that provide more redundancy by running three loops and connecting all three at switching stations on shore. That makes it easier to reroute traffic if there's a break.

Engineering experts say the Taiwan incident should persuade all operators to do more to prepare for quakes. It's not good enough if you have a variety of routes but then bring them into shore at the same location--especially if, as in the Taiwan case, they're crossing a fault line right there. "The main lesson is to look at where the fault lines are and put in geographic diversity to avoid having a few points of failure," says Stig L. Nilsson, director of the electrical practice at Exponent Inc. (EXPO ), an engineering consultancy in Menlo Park, Calif.

QUICK FIXES

But there's another lesson: The global telecom network really is quite resilient, even in the face of such a crippling blow. Within 12 hours of the undersea rock slides, at least partial service had been restored to most of the affected networks. This was done by rerouting traffic via land and sea through Europe to the U.S.

India, in particular, has become obsessed with telecom reliability, given its huge bet on call centers and software- coding shops that can't afford to be offline for long. That helped the country avoid the disruptions felt in Taiwan and China. A survey by nasscom, the country's software trade association, found that only one large company suffered a major outage, of eight hours. Other big companies were affected only slightly. The reason: They tap multiple telecom service providers and use four separate cable systems that come to shore in different Indian cities. In the telecom network, as in other human endeavors, there's strength in diversity.

By Steve Hamm and Spencer E. Ante

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE