Fiber sails through the sea: Global Crossing, CTR build trans-Atlantic networks

It's good to get out of the country. That's the message from an aggressive group of carriers. Companies such as Global Crossing and CTR Group are building independent trans-Atlantic networks that will make the world even smaller.

Global Crossing is phasing in its undersea network, the bulk of which will be operational by mid-2000. The first phase, linking the U.S. and the U.K., was turned up in May. By 2000, Global Crossing plans to build four separate rings connecting the U.S. to Germany, the Netherlands, Bermuda, St. Croix, Japan, Mexico and Panama.

One of the most aggressive proposals is CTR Group's Project Oxygen, said Brad McGee, senior vice president of Tyco International. Tyco's submarine systems division, which builds undersea fiber optic networks, counts Global Crossing and Project Oxygen as customers.

Project Oxygen has not completed its financing nor begun the build, but the proposed network is one of the grandest in scope. In total, the Project Oxygen network will connect 78 countries and locations with 99 landing points, said a spokesman. The 168,000 kilometer network includes 83 submarine links, 10 terrestrial crossings and three network management centers.

"We'll have complete resilience with the three network management centers," said Dave Howard, Project Oxygen's chief engineer. Located in Asia, the U.S. and Europe, each center will typically monitor its own region. "But if one [center] fails, the other two will take over. If two fail, I can still run the whole system. That is unique to Project Oxygen," he said.

In early 1999, Project Oxygen will begin building the first phase of the network, Howard said. Service will commence by the end of 2000. It will cost an estimated $10 billion and will encompass the trans-Atlantic and Pacific routes as well as terrestrial cabling in North America.

The interest in undersea fiber optic links is growing, McGee noted. "There has been a surge. One of the drivers has to be the capacity of the cable being used by the Internet," he said. "Most people do not currently have a high-speed connection to the Internet. That is likely to change, and the capacity demands are going to grow and drive the push for additional [undersea] cable."

McGee likened the dearth of bandwidth to a satellite launch pad. "If you've got limited capacity, you definitely want to make sure you've got your reservation," he said.

To date, Tyco has a backlog of $200 million in fiber optic cabling projects, McGee said. "We don't see anything that will change that. We think the backlog will continue to grow," he said.

Global deregulation also is drawing interest in underwater networks. The U.S. has enjoyed deregulation for more than a decade, "but the rest of the world is just getting around to it now," said Mark Langner, research associate at Hambrecht & Quist. Deregulation fuels independent operators, and that opens the sea to smaller carriers building limited links across the globe.

"This industry segment [of emerging International service providers] didn't exist three years ago," he said. "There is an opportunity to build all over. No one person can cover all that [area] at once."

In addition to its buildout plans, Project Oxygen has focused on marketing. To help gain funding, Project Oxygen is offering a rebate plan for carriers that agree to buy capacity now. Based on the amount of money committed and the date purchased, carriers can earn back all their money over several years.

The ability to secure high-yield financing can make or break a company's success, Langner said. "I don't want to throw water on the party, and if you can build it, there is huge demand for these [undersea networks] but we are getting into a more cautious environment," he said. "Can you raise the cash?"

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