Subsea Cables & Internet Infrastructure

I n 2005 there were 7 high c apacity Trans- Atl antic subsea fibre optic networks connecting North  Americ a to Europe. Flag had two cables, Hibernia  Atl antic two as well, Level3 owned the Yellow cable, Global Crossing had  AC1, the PTTs owned TAT-14,  and  Apollo h ad two. In most cases the cables landed in either Ireland or the UK with most traffic destined for downtown London telecom hotels like the various partitions of Telehouse London (East & North at that time). London was Europe's key telecom hub. The other two important hubs were Frankfurt and  Amsterd am.  At the time Teli a Carrier was buying 10G waves 60 Hudson to Telehouse East for $38K a month. But that did not last long.  There was chronic excess capacity due to zombie subsea cables. In most industries if rates of return are depressed, firms exit the industry with their assets sold to be used in other sectors. Consequently, the industry produces less and prices rise pushing up cash flow margins. Not so in tel