Undersea Cables: The Achilles Heel of our Economies
In December 2008 within milliseconds, Egypt lost 70 percent of its connection to the outside Internet. In far away India, 50 to 60 percent of online connectivity similarly was lost. In Pakistan, 12 million people were knocked offline suddenly, and in Saudi Arabia, 4.7 million were unable to connect to the Internet. The economic costs of this 24-hour outage: approximately 64 million dollars.
The recent revelations by WikiLeaks of U.S. national security interests in critical infrastructure vulnerabilities mention the often neglected underpinning of the current connectivity revolution sweeping the planet--undersea cables. In December 2008, four undersea cables were cut simultaneously, affecting Internet users all over the world. While cable cuts happen from time to time nothing, the scope of the cuts illustrate the exposure of our economies to disruption once we lose connectivity.
Hardly any people know that our global digital connectivity rests upon a relatively few fiber optic cables lying at the bottom of the Atlantic, Pacific, and Indian Oceans. They wrongly believe that their international communications are carried via satellite links. The truth is that 99 percent of transcontinental Internet traffic travels through these connecting cables; these are the lifelines of our economies. For proof, simply take a quick look at the financial services sector. In 2004 alone, nine million messages and approximately $7.4 trillion a day were traded via undersea cables worldwide. The Society for Worldwide Interbank Financial Telecommunication (SWIFT), a provider of financial messaging, sends about 15 million messages a day over cables. 1 million of these are financial transactions, amounting to over $4.7 trillion dollars a day commuting via the same undersea cables. The finance hub Hong Kong doubles its dependency, i.e. the volume of messages going through these cables, every 18 months.
Most of the cable cuts occur because of ship anchors, natural disasters such as earthquakes or fishing nets. While the technical reliability of these cables is very high, international politics have created three particular problem zones in the world -- three cable chokepoints where undersea cables converge and where if cut, outages could have severe consequences. The first is in the Luzon Strait, the second in the Suez Canal-Red Sea-Mandab Strait passage, and the third is in the Strait of Malacca.
Let's take a closer look at the Luzon Strait. The reason why cables go through the Luzon Strait rather than taking an alternative route through the Taiwan Strait to avoid this single point of failure is because of the ongoing political tensions between Taiwan and China. The result is that Hong Kong, a major financial hub, is one of the most vulnerable spots to outages in the world. The Hengchun earthquake in 2006 severed the Luzon Strait cables, which, according to Chinese newspapers, "catastrophically affected financial transactions, particularly in the foreign exchange market." Simultaneous cuts in the Luzon Strait or the Suez Canal-Red Sea-Mandab Strait chokepoints -- again largely the result of the political unwillingness of the countries on the Arabian Peninsula to cooperate with regard to overland cables through their territories -- could cut Hong Kong off from New York or London, as terrestrial routes would have insufficient capacity to carry the undersea cable load. Payments suddenly could not be made, orders not processed, and bond trading halting on the stock exchange. Given our volatile economic climate, an incident where a number of these cables are cut could have devastating consequences.
When cables are cut at one chokepoint, the loss of connectivity might last from a few days to a few weeks depending on how well the cable system owner, the operator of the repair vessel, and the national government involved coordinate their efforts. A few countries are notorious for delaying repair permits if the cuts appear in their territorial waters.
The good news is that there is the chance for "undersea cable diplomacy" to bring countries together. The IEEE Reliability of Global Undersea Communications Cable Infrastructure (ROGUCCI) Report, released earlier this year, provides a thorough analysis of these and other concerns, and, most importantly, provides bold, actionable recommendations for addressing each of these problems in order to strengthen the resilience of the global undersea communications cable Infrastructure (GUCCI).
The international, non-profit "think and do tank" EastWest Institute has been recruited to champion international policy aspects of the recommendations and is making encouraging progress. There is hope that China and Taiwan could reduce tensions and build trust by allowing the installation of undersea cables in the Strait of Taiwan. It would be a win-win situation for both sides and the world since it decreases the vulnerability of the global economy to communication outages. The same is true for other chokepoints. Undersea cables might serve as the initial building block in inter-country collaboration in some of the most contested regions of the world. This was a notion already recognized by Queen Victoria in her first cable across the Atlantic in 1858 when she expressed hope that undersea cables would prove "an additional link between the nations whose friendship is founded on their common interest and reciprocal esteem."
Franz-Stefan Gady is a foreign policy analyst at the EastWest Institute.