Geography Is Destiny: Shallow Seas & The EU'S Arctic Cable Aspirations

The map shows the ultimate challenge for any cable crossing the North Pole. The Bering Strait is the exit for any polar project trying to reach Asia. But the average depth is only 30 to 50 meters. As you learned in school, the Bering Strait was a land bridge during the last Ice Age lasting from 37,500 to 12,000 years ago. The lower the temperature, the more water vapor is deposited as snow and ice on land. Hence the oceans recede as temperatures fall. 

The construction rule of thumb is to bury a submarine cable when the sea is a thousand meters or less deep. This means a polar cable must be buried for over two thousand kilometers as the map shows. The North Alaskan coastal Quintillion cable's burial depth varies between two and four meters with a maximum of 12 meters. Deep burial is intended to protect the cable from icebergs scraping the sea floor in shallow water. A dual cable design raises per meter cost because the protect path would traverse the more shallow Russian side of the Arctic Ocean. Given that the extreme cold makes metal brittle and there is little operational experience in deploying arctic subsea cables, NorduNet's $1.5 billion estimate for a single Polar Connect cable might be conservative. A diverse ring would certainly exceed $3 billion dollars. One must also consider the annual maintenance charge for repairs. When I was at Hibernia in 2010, the maintenance fee was only $11 million per year with the first two repairs free. Hibernia had at that point two Trans-Atlantic cables and two Irish Sea cables. Adjusting for inflation, the cost today would be $16 to $17 million. But an Arctic cable requires new ice breaker cable ships as well as escort icebreakers. Hence the fees would be closer to $35 million each year. Over a 25 year period cumulative maintenance expense would be just under $900 million. 

So who will use this cable? The hyperscaler business model aims to minimize the high opportunity cost of down time in terms of lost revenue. If Google search is unreachable, then people immediately switch to Microsoft's Bing. Amazon believes that any perceptible delay in reaching an Amazon sales site cuts sharply into sales. So hyperscalers and any organization that prizes uptime is unlikely to be a Polar Connect customer due to the highly likelihood of outages due to icebergs scouring the sea floor combined with long repair windows. This eliminates hyperscalers, ISPs, Tier 1 Internet backbones, large commercial operations, and the like, as major customers. 

And then there is price. Again, hyperscalers want low prices. Not high. This is why they became cable owners. Same holds for all ASNs. Price is the dominant factor in the wholesale capacity market. My biggest challenge as a telecom broker is satisfying my client's voracious demand for ever cheaper bandwidth. 😄 Polar Connect capacity is likely to be 3x to 5x the Pacific norm. 

Map of the North Pole That Includes Sea Depth


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