Island embraces subsea cable hub opportunity
Bermuda is working to establish itself as a landing hub for transatlantic submarine cables carrying internet and telecommunications.
Three such hubs exist in the Pacific Ocean, in Hawaii, Guam and Fiji, but there are none in the Atlantic.
If Bermuda succeeds in becoming the Atlantic's first, the benefits and opportunities could range from attracting submarine cable operators' head offices to the island, to captive insurance for submarine cable operators, and creating an additional revenue stream for the economy.
In addition, companies with intellectual property rights would be better able to demonstrate economic substance in Bermuda, while operators landing cables would be able to achieve network diversity and divert some telecoms traffic away from certain jurisdictions if required — this could be for privacy or data sovereignty reasons.
There are at least 26 submarine cables that cross the Atlantic from Americas to Europe and Africa, and others that link North and South America, and the Caribbean.
Three cable systems land in Bermuda, namely GlobeNet, Challenger and Gemini. Many other transatlantic cables transit around the island, but do not land here. Efforts are being made to attract them to Bermuda and to promote the island as a tech cable corridor.
“Bermuda is ideally positioned to be an Atlantic hub,” Fiona Beck said.
She has an extensive background in telecommunications and technology, and is a former chief executive officer of Southern Cross Cable Network, and a past president of Sub Optic, an industry body for the global submarine cable industry.
She moderated an industry panel discussion on submarine cables at the Bermuda Tech Summit, which took place during the Bermuda Government's consultation period for three Bills relating to submarine cables in Bermuda.
The Bills were tabled at the end of September, and final versions have yet to return to the House of Assembly.
“Government has created a new thing called a submarine protection zone. This allows submarine cable to land in an efficient and effective manner, and at the same time protects new and existing systems that are all ready in the water,” Ms Beck said.
More than 99 per cent of the world's global communications is carried on submarine cable networks, and those networks have increased due to the “exponential growth of data”.
Ms Beck said: “The world is changing. It is key infrastructure; many governments have declared subsea cables strategic national assets.”
It costs between $250 million and $300 million to build a whole submarine cable system stretching between the US and Europe, while a cable that connects more than 20 countries would cost $1 billion, or more, said Joel Ogren, CEO of ACA International.
A shorter cable link, between New York and Bermuda, cost close to $50 million to be re-laid, according to Erick Contag, executive chairman of GlobeNet Telecom.
Two of Bermuda's proposed Bills relate to protected areas for submarine cables, while the other is for permit and licensing.
In jurisdictions that don't have a submarine cable protected zone it is difficult to get permissions to land a cable because “you have got to go through all sorts of environmental assessments, financial assessments”, Steven Rees Davies, partner, Appleby Bermuda, said.
Referring to Bermuda's approach, he said: “This is basically setting up a doorway where we have assessed it all ready, so you can come in here. Not only that, but when you lay your cable the cable owner is protected from any damage caused to the cable in that zone.”
A protected zone would prohibit activities, such as the use of explosives, or from dredging.
The one-stop-shop approach of permit and licensing was explained by Walter Roban, Minister of Home Affairs, when he tabled the three Bills.
“Landing and operating significant systems in some jurisdictions has become increasingly difficult and lacks a single landowner or a single marine spatial planning regulator,” he said. “Countries that have shorter and more certain timeframes for the permitting process are being sought and are becoming much more attractive.”
Joel Ogren, CEO of ACA International was on the panel at the summit in October, and said it takes more than two years to land a cable in the US. He added: “A cable protection zone is a great concept, it is the streamlining of the activity. You can assure investors that you can land here within a timeframe — because time is money.”
Mr Contag said: “It creates an asset that will last at least 25 years. By protecting the cable, providing certainty, if there is an issue, you want to have a way of going in to the country or region with minimal headache to do your repairs. You don't want to have people waiting a month or two to get a permit.”
Bermuda's legal framework is one reason why cable operators might view Bermuda favourably as a landing hub.
Another is the ability to reroute some telecoms and internet traffic away from chosen jurisdictions rather than, for example, sending it all in to the US before reaching its ultimate destination elsewhere.
On the issue of data privacy and data sovereignty, Mr Ogren said: “Businesses and countries want their data to be treated like an embassy, you don't want anyone poking around in there looking at it. You want it to be privatised. That needs to fall under the regulatory environment here.”
He added: “In the US there has been a lot of talk about, from a cybersecurity perspective, ‘we don't want our cybertraffic going to the US'. So this is a reason why Bermuda could attract cables to land here. It doesn't mean you don't have connectivity to the US, [but] that traffic only goes there if you want it to.”
Ms Beck, who is also a director of the Bermuda Business Development Agency, said: “It's exactly what the transit cable concept does — it says I'm going from Europe, I land in Bermuda, I might want some traffic to go to the US, but I don't want everything to go to the US, so I'm going to land here and only get the stuff that needs to go to the US, and the rest is going to go to Brazil.”
The BDA is working in partnership with the Government to progress a national subsea corridor initiative aimed at attracting new cable business and boosting connectivity.