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Voice of theVoice of theVoice of theVoice of theVoice of theIndustryIndustryIndustryIndustryIndustry

Issue 10September 2003

An international forum forthe expression of ideas andopinions pertaining to the

submarine telecoms industry

Contents

Advertisers

Editor’s Exordium 3

Emails to the Editor 4

Industry Survey Report 5

NewsNowA brief synopsis of current news items 8

Maintenance News 12

Negotiating the Market’s Half PipePart 2 Tom Soja 14

Cables BewareFCC Regulations can BiteAndrew Lipman and Troy Tanner 19

Sea ChangeGulf Fiber SystemJim Byous 25

Maritime SecurityThe Need for Awareness and ComplianceRoger Carver 30

Tracking the Cableships 33

Letter to a FriendJean Devos 37

Upcoming Conferences 39

Tyco Telecommunications 7C&W GOES 8,9,10,32OFS 11Global Marine 12,13Caldwell Marine 15Great Eastern 17CTC 18Lloyds Register 18Fugro 20STF Reprints 22STF Marketplace 23Nexans 24Spellman High Voltage 29 WFN Strategies 32BJ Marketing Communications 35Parkburn PHS 36PTC 38

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ExordiumExordiumExordiumExordiumExordiumSubmarine Telecoms Forum is published quarterly by WFNStrategies, L.L.C. The publication may not be reproducedor transmitted in any form, in whole or in part, without thepermission of the publishers. Liability: while every care istaken in preparation of this publication, the publisherscannot be held responsible for the accuracy of theinformation herein, or any errors which may occur inadvertising or editorial content, or any consequence arisingfrom any errors or omissions.

Submarine Telecoms Forum is an independentcommercial publication, serving as a freely accessible forumfor professionals in industries connected with submarineoptical fibre technologies and techniques. The publishercannot be held responsible for any views expressed bycontributors, and the editor reserves the right to edit anyadvertising or editorial material submitted for publication.© WFN Strategies L.L.C., 2003Contributions are welcomed. Please forward to theManaging Editor: Wayne F. Nielsen, WFN Strategies,19471 Youngs Cliff Road, Suite 100, Potomac Falls,Virginia 20165, USA.Tel: +[1] 703 444-2527, Fax:+[1] 703 444-3047.Email: WNielsen@SubTelForum.comAdvertising - Europe/ME/Africa - Hildegard PeltierTel: +[33] 1 4785 2207Email: HPeltier@SubTelForum.comAdvertising - Houston USA, Robin GentryTel: +[1] 281 895 6880Email: texas109@msn.com

Designed and produced by Ted BreezeBJ Marketing Communications, Colchester, UK..

Incredible news – we accomplished our submarine cable industry survey,

and everything is great; orders are rolling in, people are being re-

employed, life is good again!

Well, not quite. In fact, we learned that while people continue to be

optimistic about the future, the present is not all that great. We see

some new business; we even see some potential transoceanic systems, but

confidence in their success is still low or cautionary at best.

Because I am a “glass-full” kind of guy, first here’s the good news:

· 87% of responders plan to attend SubOptic 2004, and

· 75% of responders believe business in improving

Similarly, here’s the bad news:

· 75% of responders believe we are still deep in the throes of the

recession; only 25% have not been egregiously affected

When asked what most does the industry need, we received some very

interesting answers, which I invite you to read as enclosed herein.

As I write, we wait here impatiently in Virginia to see where our first

major hurricane of the season will come ashore. Will it miss us once

again; or has our luck run out, and it’s going to hit us

right between the eyes?

Only time will tell.

Wayne Nielsen

4

Emails to the Editor

....................................

Excellent job, as always.

Daron Jones,

Managing Editor

UnderWater Magazine

Great publication. Keep up

the good work.

Steve Silvano

A few years ago I was

privileged to lodge with a

Mrs. Crocket, or maybe Mrs.

Puckett on a duck hunting

trip to Tangier Island. All

the inhabitants spoke with

a quaint Elizabethan accent

and only the Doctor owned

an automobile, which did not

run.

of your Subtelforum. We

believe it is a good magazine,

and benefit from the vast

information you provide.

We noticed in your Subtelforum

issue 9, latest cableship

information table, ‘Maersk

Repeater’ is listed as a AP

Møller cableship. We are

pleased to inform that after

18-month charter of Maersk

Repeater via Global Marine,

SBSS purchased this ship. This

ship is now named ‘Fu Hai’

which in Chinese means lucky

sea.

Thanks & regards,

Vivian J.Y. Hua, Assistant Bid

Manager

S. B. Submarine Systems Co.

Ltd.

(Note from Publisher - Pleaserefer directly any shipchanges or modifications toLloyds List.)

Thanks for jogging my memory

of this unique and interesting

island.

Hansen Long

Senior Consultant, T. Soja &

Associates, Inc.

This is Vivian Hua from S. B.

Submarine Systems Co.

Ltd.(SBSS) in Shanghai, China.

SBSS is an affiliated company

of Global Marine Systems Ltd.

specializing in submarine

telecommunication cable

installation and maintenance.

We established in 1995, Global

Crossing and China Telecom are

SBSS shareholders.

As a player of submarine cable

industry, we read every page

........................................................................

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0% 100%4 What would you find the Cable laying analysis

most stimulating and Creating & driving demandrelevant topic for a Intercontinental, regional & local marketSubOptic roundtable? demand drivers

New network configurationsO&MPricingRetail servicesSubmarine cable protectionThe need for developing communications in and around 3rd world countriesTime to survey & survey liabilities

5 Are you planning to attend YesSubOptic 2004? No

6 Are business conditions Improvingimproving or getting worse? Worse

7 Are you optimistic or Optimisticpessimistic about the Pessimistic future? Other

0% 100%

1 Which best describes Academicyou? Engr/Project Mgmt

ManagementMarketingOther

2 What best describes your Cable Ownerbusiness? System Integrator

Installer/MaintainerMarine SurveyorOther

3 Which keynote speaker A good visionary with anwould attract you to excellent crystal ballattend SubOptic 2004? Garry Wimmick, ex GX

Phil Hart, C&WPresident George W. BushR&D speakerRob Munier, TycoSingapore TechnologiesTyco/Alcatel

0% 100%

0% 100%

0% 100%

Many thanks to those who found the time to respond to our industry surveycosponsored by SubOptic 2004. Congratulations to Richard Fong of RichfongConsult PTE LTD of Singapore, our lucky respondent winner of the 2002 editionof Undersea Fiber Communication Systems, edited by Jose Chesnoy, AlcatelOptics Group, France and Chairman, SubOptic 2004 Programme Committee.

SUBMARINE TELECOMS INDUSTRY

SURSURSURSURSURVEYVEYVEYVEYVEY

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11 How would you rate the Excellentcontent of Submarine GoodTelecoms Forum magazine? Satisfactory

UnsatisfactoryPoor

12 How would you rate the Excellentcontent of News-Now Goodand the STF website? Satisfactory

UnsatisfactoryPoor

13 Would you like to see any Access to technical papers?changes in STF News-Now, Employment sectionor other website information Some contribution from ICPC & SCIGor services? and the like

14 In your opinion, what does 3rd party finance for developing worldthe industry most need? submarine cable networks

Access technologies deployed to bring greater demand to big pipesConfidenceDemand pull that is unambivalentFinancial backingGovernment guaranteed loansJean Devos Wake Up CallMore cables being laidTrust & finance

0% 100%

0% 100%

0% 100%8 Does your current business Still in Recession

performance indicate that Not been Affectedwe are still in a recession,or has your business notbeen affected?

9 How have client Client requirements are dominated by costrequirements changed over containmentthe last three years? Expect price checks

Fishing agreements needed more oftenLack of fundingLeases preferred over IRUMore & more responsibilities to DTS/survey contractorsMore bottom feeder customersMore QA/QC requirementsMuch more discretionary with spendNo inventory buying

10 How has the type of project All are small to very short systemsyou handle changed over Fewer viable customers and partnersthe last three years? From world class provider to month to

month survivalLittle changeMore procurement/installation projectsMore strategicSmaller size

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A brief synopsis of current news itemsfrom NewsNow, the weekly news feedavailable on the Submarine TelecomsForum website.

From business case to operation, from satellite networks to submarine, from Alaska to Bahrain to New Zealand

Asia Netcom Expands in ThailandAsia Netcom announced plans for building presencein Thailand as a provider of communication solu-tions for major enterprise customers.www.subtelforum.com/NewsNow/8_august_2003.htm

Asia Netcom, China NetcomInterconnectAsia Netcom and China Netcom completed inter-connection of Asia Netcom’s regional fiber networkwith the national fiber backbone of China Netcom,as well as agreement with China Netcom to bringAsia Netcom’s portfolio of products and services tothe Chinese market. www.subtelforum.com/NewsNow/31_august_2003.htm

Asia Network Completes VoIPDeploymentAsia Netcom has announced the full deployment ofits Voice-over-Internet Protocol (VoIP) platform.www.subtelforum.com/NewsNow/20_july_2003.htm

Capacity Sale for ARCOSNew World Network, Ltd., a leading provider ofadvanced, high-speed clear channel and IPservices and the principal owner of the AmericasRegion Caribbean Optical-ring System (ARCOS),has announced a major capacity sale and leaseagreement that extends Telgua’s national networkto Central America, South America and the Carib-bean.www.subtelforum.com/NewsNow/18_august_2003.htm

Carriers Expand Services forMultinationalsA number of carriers have announced expandedservices for large corporate users.www.subtelforum.com/NewsNow/18_august_2003.htm

Columbia Ventures Announces AnotherTelecom AcquisitionCTC Communications Group, Inc., Columbia Ven-tures Corporation and Columbia VenturesBroadband LLC announced have entered into aninvestment agreement and filed a motion with theBankruptcy Court seeking approval of the investor,the agreement and certain investor protections.www.subtelforum.com/NewsNow/10_august_2003.htm

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Not everyone has our depth of experience or breadth of capability - but now everyone can profit from it

Realise your business vision with Cable & Wireless www.cw.com/goes

Dutch Government Signs IP VPN DealEquant has signed a five-year, 160-site contract withthe Netherlands Ministry of Foreign Affairs.www.subtelforum.com/NewsNow/

20_july_2003.htm

FLAG Redeems Notes, Notes StrongFinancial PositionFLAG Telecom Group Limited has announced thatit has notified The Bank of New York, the trusteeunder the company’s Indenture dated October 9,2002, of its election to redeem all series of notesissued by the company under the Indenture onAugust 25, 2003.

www.subtelforum.com/NewsNow/8_august_2003.htm

Global Crossing Announces VoiceServices PortfolioGlobal Crossing has announced a groundbreakingvoice services portfolio that delivers unsurpassednetwork performance and superior customer sup-port. The voice services offering, the first of its kindwithin the telecommunications industry; consists ofvoice services SLAs, loyalty incentives and an un-matched satisfaction guarantee.

www.subtelforum.com/NewsNow/7_september_2003.htm

Global Crossing Results for JuneGlobal Crossing has filed a Monthly Operating Re-port (MOR) with the U.S. Bankruptcy Court for theSouthern District of New York, as required by its

Chapter 11 reorganization process. Results reportedin the June 2003 MOR are unaudited.www.subtelforum.com/NewsNow/10_august_2003.htm

Medical Application First for Japan-Korea CableKyushu University transmitted real-time Internetendoscopic images of an operation on a gastriccancer patient to the National Cancer Center (NCC)of South Korea via the Japan-Korea submarinecable, enabling a question-and-answer sessionbetween Japanese and Korean doctors.www.subtelforum.com/NewsNow/31_august_2003.htm

NAP of the Americas Adds CustomersTerremark Worldwide, Inc. has announced that thecompany has signed 14 contracts with new cus-tomers and nine existing customers have expandedtheir relationship with the NAP of the Americas.www.subtelforum.com/NewsNow/8_august_2003.htm

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New World Signs Agreement with NewEdgeNew World Network, Ltd signed agreement to pro-vide capacity services to New Edge Networks.www.subtelforum.com/NewsNow/27_july_2003.htm

New Strategy Director for C&WC&W appointed Giulia Nobili as Group Director ofStrategy and Business Development.www.subtelforum.com/NewsNow/14eptember_2003.htm

Portland Sales Office for TycoTyco Telecommunications has announced the open-ing of a sales office in Portland, Oregon. www.subtelforum.com/NewsNow/14_september_2003.htm

PRIMUS Reports Record QuarterPRIMUS Telecommunications Group, Incorporated,announced record results for the second quarter2003.www.subtelforum.com/NewsNow/10_august_2003.htm

Revitalized FLAG at Telecom World 2003FLAG Telecom has announced that it will beexhibiting at the ITU Telecom World 2003 event inGeneva from 12 to 18 October 2003.www.subtelforum.com/NewsNow/7_september_2003.htm

Singapore University Picks Asia NetcomAsia Netcom has announced that all Internet con-nections within its campus have been migrated to

Asia Netcom’s global IP network. www.subtelforum.com/NewsNow/8_august_2003.htm

Sprint Gains License, Expands Networkto TaiwanSprint has announced the expansion of its globalSprintLink(TM) Internet Protocol (IP) network to in-clude Taiwan, and Sprint’s acquisition of a Type IITelecommunications Business License for the pro-vision of corporate data and IPL services to theTaiwan market.www.subtelforum.com/NewsNow/18_august_2003.htm

Time dotcom Announces NewRelationship with Asia NetcomAsia Netcom has announced its new strategic work-ing relationship with Time dotcom to provide fullysecured high capacity connections for end users inMalaysia.www.subtelforum.com/NewsNow/7_september_2003.htm

From business case to operation, from satellite networks to submarine, from Alaska to Bahrain to New Zealand

11

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OFS innovates today’s major submarinenetworks with fibers that support longerdistances and higher capacities than everbefore. The results? Lower system costsand unrivaled performance.

OFS has the optical fiber to support allyour emerging system design needs –

Lower dispersion management costHigher reliabilityGreater capacity and bandwidth

To unleash your system’s fullcapabilities while keeping yourcosts competitive, choose OFSfiber for your next submarinecable project.

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MAINTENANCE NEWSMAINTENANCE NEWSAustralia to Address Cable ProtectionIssuesThe Australian Government has allocated AU$1.5million to the Australian Communications Authority(ACA) over the next four years to implement a newregime of cable protection zones, to protect sub-marine cables considered of national importancein linking Australia to the rest of the world.www.subtelforum.com/NewsNow/27_july_2003.htm

Bahamas Carrier Adds ARCOSConnectivityNew World Network, Ltd., principal owner of theAmericas Region Caribbean Optical-ring System(ARCOS), has announced that it has signed anagreement with BATELCO (Bahamas Telecommu-nications Corporation), which will significantly ex-pand BATELCO’s high-speed connectivity in andto The Bahamas with IP connectivity via New WorldNetwork’s ARCOS fiber-optic network.www.subtelforum.com/NewsNow/20_july_2003.htm

Farice Installation Work ProgressingCanyon Offshore is undertaking route clearance/burial assessment and post-lay burial projects onthe Farice cable between the Faroe Islands andIceland.www.subtelforum.com/NewsNow/7_september_2003.htm

Korean Domestic Link UpgradedNortel Networks has completed an optical long-haulDWDM network for Korea Telecom (KT). The net-work was sold through Growell Telecom Ltd., aNortel Networks distributor.www.subtelforum.com/NewsNow/31_august_2003.htm

Global Marine Awarded HiberniaThe cable maintenance contract for the HiberniaAtlantic cable system, has been awarded to GlobalMarine Systems Limited.www.subtelforum.com/NewsNow/13_july_2003.htm

Marine Services Company Adds TugboatDokai Marine Systems Ltd. has announced the fu-ture in tugboat vessels with their newly built Tug“Mirai.” Dokai held an inauguration ceremony forthe Mirai on July 23rd, 2003, in Kitakyushu, Japan.www.subtelforum.com/NewsNow/27_july_2003.htm

Matsudaira Leaves C2CC2C Pte Ltd has announced the resignation of itsCEO, Mr. Tsunekazu Matsudaira, who has decidedto leave to pursue other personal interests and tospend more time with his family.www.subtelforum.com/NewsNow/14_september_2003.htm

New Rules for Laying Cables in FloridaThe state of Florida has approved new rules re-garding the installation of submarine cables in ar-eas where there are coral reefs.www.subtelforum.com/NewsNow/31_august_2003.htm

13

New Zealand ROV Company BoughtSeaworks has bought the New Plymouth, New Zea-land-based firm Magellan Technologies Ltd.www.subtelforum.com/NewsNow/20_july_2003.htm

Nicaraguan Carrier to Provide Backhaulfor ARCOSNew World Network, Ltd., the principal owner ofthe Americas Region Caribbean Optical-ring Sys-tem (ARCOS), has signed a backhaul agreementwith Enitel, the primary telecommunication providerin Nicaragua.www.subtelforum.com/NewsNow/10_august_2003.htm

Sea Stallion trenches North HoyleExport CableIn a milestone for the development of UK Renew-able Offshore Power Generation, an innovative

subsea plough designed and built by The Engineer-ing Business Ltd (EB) is currently trenching thepower export cables for the North Hoyle offshorewindfarm.www.subtelforum.com/NewsNow/31_august_2003.htm

Shell Links North Sea Platform toTampNett Network

Shell Expro has linked to the Statoil-ownedTampNett network in order to enhance communi-cations for its platforms on the UK continental shelf. Scheduled to run for eight years, this agreementstrengthens TampNett’s position as the largest net-work company in the North Sea.www.subtelforum.com/NewsNow/27_july_2003.htm

SMD Technology In Search For Gold

An undersea exploration vehicle designed and builtin Newcastle, UK, is playing a key role in the sal-

vage of what could be the most valuable shipwreckin history.www.subtelforum.com/NewsNow/31_august_2003.htm

Vodafone Malta to Build Malta-ItalyCableVodafone Malta has announced the award of a con-tract to Alcatel to build a Malta-Sicily submarinecable system.www.subtelforum.com/NewsNow/14_september_2003.htm

WFN Strategies Passes D&B’s SupplierPerformance ReviewWFN Strategies recently received a highly success-ful Supplier Performance Review, which wasaccomplished by Dun & Bradstreet.www.subtelforum.com/NewsNow/14_september_2003.htm

MAINTENANCE NEWSMAINTENANCE NEWS

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Time to buy while it still lasts (and qualitystill available)There may never be a better time to build a subseafiber network or buy wholesale broadbandcapacity – the kind being marketed and sold bythe various stripes of carriers’ carriers throughoutthe world. The reasons are manifold.

Waiting too long in either the hardware/equipment or capacity markets risks beingsubject to price inversions resulting from thecoming end of availability of cheap distressedor otherwise excess inventory of any type beingsoaked up and consumed. The next incrementalquantities following the sale of these assets willreturn to price levels that really will have to coverthe costs associated with underlying factors ofproduction to create that hardware or capacity.That is, the next incremental amount will nolonger have associated with it the discount factorof bankruptcy “cram-down economics” or long-ago written off sunk costs.

Regarding now as the time to buy fibernetworks – Why now as opposed to before?Before there was an overabundance of large-scaletelecom projects being developed andconstructed – so-called global network build-outs. Smaller cable projects often got pushedaside or ignored altogether by suppliers.

Now the pendulum has swung in theopposite direction. Global build opportunitieshave gone. All of the major suppliers that greatly

expanded production capacity to avoid marketshare loss during the boom have scaled backsignificantly in the current depressed marketconditions. Every supplier now is aggressivelypursuing any and all opportunities to provideequipment and services for new networks nomatter how small, just to keep their scaled-downfactories open and support organizationstogether – in some cases bidding at cost (or evenbelow cost in the opinion of some observers.)

Why now as opposed to continuing towait? Currently, suppliers have certainly finishedwith cutting the “fat” from their operations andhave no place else to cut except into the muscle.

There are significant risks associated withcontinuing to wait longer. The risks stem fromtwo possible future scenarios: (1) the industrycontinues to remain depressed for several years,or (2) the industry begins to recover.

If the market remains depressed, supplierscould be forced to further significantly reducestaffing levels and face the loss of importantexperience and skill sets. If and when a newproject comes in, a supplier may have to staff itwith relatively inexperienced people since themost experienced and highly-paid workers arethose most likely to take advantage of severancepackages which save the company the mostmoney when they are let go. A bargain price fora system supplied under this scenario could wellbe illusory – same as what has been witnessed inthe past when new network operators entered a

NEGOTIATINGTHE MARKET’SHALF PIPEBy TOM SOJAPart 2

15

hot market with unproven skills, but were floatedby an urgent need for systems build capacity.

Under the second scenario, if the industrybegins to recover to any significant degree, mostsuppliers will likely be very hesitant to re-expandproduction capacity until a certain degree ofconfidence can be reached regarding howsustained a recovery might be. Suppliers willlikely err on the conservative side, remainingscaled-down, thus creating the potential for a“tightening” of the supply situation, meaningthat delays in some projects could occur andprices (and profit margins) for smaller scaleprojects could begin to head upwards. The largerprojects will again get preferential treatment.

The state of the subsea cable industry hasreached its crisis stage one that was perhaps evenmore acute than had ever been seen before. Cashcontinues to be King.

Developers with viable projects hold thebargaining power to contract with suppliers atprices that may never be seen again but still atquality levels that match “normal” expectations.Although price is important, selection of asupplier should also consider criteria well beyondprice – especially with regards to supplier stabilityand its ability to warranty its products and/orservices in the future.

However, while ultra-low price is apossibility, smart customers realize that thesupplier should be allowed to earn a fair profitin order to remain viable for the long run. This

benefits both buyer and seller under the theoryof a long-term relationship.

How / Where to gain perspective?Recently, TSA was asked a (hopefully) rhetoricalquestion by a journalist, “Are independentanalysts still needed in today’s telecom marketenvironment?”

To answer a question with a question: Areexpert trainers still needed for elite athletes evenin the off-season? But of course!

The need remains for current intelligencefrom those in the market on a day-to-day basissince many parties have been only occasionalcustomers during the past two years, if at all.

One of the best ways that industry canmake use of analytically-based consultancies isto support consistently those firms that havedemonstrated a long-term commitment to theindustry as opposed to the opportunists thatentered the market during the bubble years, someof which have since withdrawn now that a lotof the consulting work has dried up.

It is indeed unfortunate, but in retrospect,it must be recognized that many of theoverbuilds that were undertaken during thebubble years were based upon over-exuberantprojections provided by newly-minted “experts”that, in twenty-twenty hindsight, were not wellgrounded in the fundamentals.

In TSA’s experience, the manner is whichclients derive the greatest value is to engage in

(We also do short and medium haul systems)

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bwall@caldwellmarine.comwww.caldwellmarine.com

16

an ongoing relationship over the longer term.Rather than view consultants as short-termspecialists for individual project use only, useconsultants on a retainer basis to keep theconversation going in order to leverage theclient’s in-house expertise and to provideadditional independent perspective on marketdevelopments on an ad hoc basis. This allowsfor smooth and efficient information flow, whichis more difficult to handle efficiently through abid for services arrangement each time an issuearises. It supplements in-house trainingprograms to provide that much-neededorganizational intelligence building and stretch-type flexibility.

This is one reason why we feel it is vital tosupply a daily run-down of significant industrynews to clients in the form of TSA NewsFeedTM,which is now in its sixth (6th) year of publication.TSA also supplements these with other monthlyand bi-monthly analyses and annual in-depthanalyses for certain key market sectors.

Staying on top of your gameThe combination of increased competition, pricedeclines, and the shift toward shorter-termcapacity leases toward the end of the telecombubble years resulted in a greater frequency ofcapacity purchases, and a day-to-day familiaritywith market-based capacity pricing on the partof the wholesale customers – the carriers. Thatwent by the boards, however, as the wholesale

capacity market shut down in mid-2001 ascustomers balked at long-term commitments toever-decreasing capacity asset valuations (marketprices) an uncertainty with regard to the abilityof wholesale providers to fulfil their long-termcommitments. But the reality is that demandcontinues to increase at significant ratesexceeding 90-100%/year along many marketroutes, and the major implication going forwardis that carriers will begin again to add to theirnetwork capacity, since inventory stock has beenlargely depleted on some routes.

What may contribute to a strategicvulnerability, though, is that many carriers havebeen out of the capacity purchase game for a fewyears now and may not be familiar with the latestpricing and terms available in a given market.As has been covered extensively in TSA’s bi-monthly Capacity Price Tracker newsletter,while pricing in some markets shows signs ofplateauing in recent quarters, others still exhibitwide fluctuations on a monthly basis.

As TSA has found in its Bandwidth Survey,that pricing awareness is often stronglycorrelated to a carrier’s “natural geographic”market (market or region of concentration) and/or to markets in which a carrier has recentlypurchased capacity. Indeed, price points are amoving variable, and even if carriers areinterested in and have operations in a certainmarket, they may not possess the most recentinformation available on prices unless they had

recently made actual capacity purchases.In addition to price indices such as those

published by TSA, many customers on both thebuy and sell side are turning to knowledgeablehands-on brokering assistance which providesgreater focus on the active negotiation andresolution of telecom assets and other services.One of the leaders in this new field of endeavoris Bandwidth Solutions, Inc. which TSA supportsworldwide with ongoing market analysis andmaintains an active involvement in up-to-the-minute pricing trends an product preferencesamong the carrier customer community.

Despite the emergence of numerous onlinecapacity listing exchanges, there remains anactive market for hands-on brokeringarrangements between parties. As has beenrecently noted in the January 11, 2003 editionof The Economist, “[a trading] screen gives youthe price, but the voice gives you the market.”

In conclusion, the question remains for allcarriers and potential users of telecom capacity:“Capacity Purchasing is a Game of Skill,Knowledge and Current Events. Are You on Topof Your Game?”

Revisiting the half-pipe analogy, thequestion is, “Would it be fun to try new things?Will I still be me afterward?” One can onlyanswer honestly for ones’ own self – it is rarethat long-term success is possible without at leastsome degree of successful adaptation to changingterrain or market conditions.

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Long-run, steady state market conditionsexist only in the dreams of economic theorists.But just as the bubble could not last, neither willthe current depression in telecom.

Many carriers have seen continued growthin demand from their markets from the corporateand end-user level which has continued to existon a very solid basis in most markets around theworld. In light of this fact, the time is comingfor carriers to initiate capacity purchase onceagain.

It is not surprising, therefore, that 63% ofthe TSA Bandwidth Survey respondents intendto purchase capacity in 2003, further reflectingwhat’s been described above as the draw-downof existing inventory. If this is the case, theexisting softness in the market may be altered,and price points and price declines will thereforebe impacted as well.

It is further conceivable that the existing“buyer’s market” may even revert once again toa “seller’s market”, particularly on some routesthat have less excess capacity (which may reflectun-built as well as unlit capacity) than others.Price declines may slow and even halt altogetheras a reflection of these market shifts – a scenariothat many service providers appear to alreadybe considering, based upon TSA’s research.

Clearly, not all capacity created equal.”Now is the time for informed purchase decisions.Now is the time to be on top of your game.

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In order to qualifyfor a free trial of these services, contact

LRFTrialOffer@SubTelForum.com.

19

Submarine cable owners and operators, andeven holders of IRU or leasehold interests, whoare not paying close attention to the latest rulechanges of the U.S. Federal CommunicationsCommission (“FCC”) may find themselves inshallow water without adequate FCC-biteprotection.

This is particularly true in today’senvironment of economic uncertainty whichleads to new creative ways of financing,restructuring, and disposing of excess capacity.It has become almost impossible to keep up withall of the potential scenarios for cable ownershipand financing. Yet each new twist bringspotential FCC licensing and regulatory liabilities.And with the dramatic drop in new licensingwork, the FCC has turned its attention toenforcement issues, and has beefed up its finesfor non-compliant licensees. Therefore, itbehooves cable capacity owners to familiarizethemselves with the latest FCC rules so that theydo not find their cables on the receiving end ofa big FCC enforcement bite. Below are severalkey regulatory pitfalls that can catch owners andcarriers off guard, with suggestions on ways toavoid them.

New FCC regulations apply toa changed cable environmentThree major developments dramaticallychanged the U.S. cable industry in the lastdecade — and as a result — the way the FCC

regulates submarine cables. The first was theintroduction of privately financed, non-common carrier cable systems, starting withthe PTAT-1 cable system. The second was thewide scale opening of the U.S. market toforeign carriers as a result of the 1997 WTOAgreement on Basic TelecommunicationsServices. The third was the overwhelming rushof newly planned cable systems using majortechnological advancements such as WaveDivision Multiplexing (“WDM”). Each of thesenew developments presented challenges to theFCC as to how cables should be licensed andregulated.

By the end of the 1990’s, the FCC wasunder great pressure by the submarine cableindustry to speed up its processing ofsubmarine cable license applications, while atthe same time guard against anticompetitivebehavior in the market.

The financial success of Global Crossing’sfirst private cable, the promise of unlimitedneed for international bandwidth, and capitalmarkets eager to invest, led the submarinecable industry into a building frenzy, withspeed to market being extremely critical tosuccess.

In 1999, the FCC commenced looking atits licensing rules to see if there was a way toexpedite licensing, while at the same timeaddressing private cable industry concerns thatconsortium-built cables were anticompetitive.

By Andrew D. Lipmanand Troy F. Tanner

CABLESBEWAREFCC regulationscan bite

20

After struggling for over two years todevelop new rules, the FCC introduced a newlicensing regime in March 2001. Unfortunately,with the downturn in the economy, many of thebenefits of the new rules have not been realized.For instance, the number of applications hasfallen dramatically, with only two domestic cableapplications, and no international cableapplications, being filed under the new rules.However, the new rules have had an immediateimpact on the way current submarine cableowners are regulated.

As new entrants have entered the U.S.market, and taken advantage of bargainbasement prices for cable capacity, some havebeen able to take advantage of the flexibility ofthe new rules that allows them to buy U.S. cablecapacity without needing to amend an existingU.S. cable license. On the other hand, somecarriers have unwittingly brought themselvesunder the jurisdiction of the FCC by engagingin activities that in the past did not require alicense.

Who needs a license?Not so simple after all?Under the FCC’s new cable licensing rules,entities that own or control a U.S. landingstation, or own or control a five percent or greaterinterest in the cable system and will use the U.S.points of the cable system, must be a party tothe cable license.

That means that even if a cable license hasbeen issued, and the cable built, if there are anynew 5% or greater owners added later, that usethe U.S. points of the cable system, the cablelicense must be amended to add them. Thesenew owners then become subject to all of theterms and conditions of the FCC cable license.

There is one major exception to this generallicensing requirement. The FCC excludes from

licensing entities that only hold IRUs orleasehold interests in the cable. For instance,on most of Global Crossing’s cable systems,Global Crossing is the only required licenseebecause its cable users acquire capacity on an IRUbasis. On the other hand, a traditionalconsortium cable will have dozens of entitiesholding original ownership interests, many ofwhom could be subject to licensing.

21

One obscure change in the rules that maycatch cable owners unaware is how the FCCdefines a 5% ownership interest. The new rulesfocus on ownership of the entire cable system,not just the U.S. segment. Further, indetermining what is “use of the U.S. points ofthe cable system,” the new rules do notdistinguish between use of capacity on anoriginal ownership basis or a lease basis.

As a result, the definition is broad enoughto require licensing of a foreign carrier that ownsmore than 5% of the non-U.S. capacity of thecable, but still “uses” the U.S. point of the cableby leasing U.S. half circuits and providing end-to-end private line service to its foreigncustomers.

The FCC also redefined what it means to“use” the U.S. points of a cable. Under the oldrules, foreign carriers that owned U.S. half-circuits in order to hard-patch traffic through theUnited States did not need to be licensed by theFCC.

The new rules now include “hard-patching” of traffic through the United States asa “use” of the U.S. point of the cable, even if theforeign carrier is not dropping traffic in theUnited States or re-originating traffic.

Cable owners need to monitor closely thelevel of their ownership in a cable. As new partiesare added, or drop off, an owner’s overallownership percentage may change. The FCCrequires a cable owner to apply for approval to

be added to an existing cable license if at anytime its status changes such that it is put overthe 5% threshold. Further, if a non-licensed cableowner already has a 5% interest in a cable, andbegins to use the U.S. points of the cable, it alsomust apply for approval to be added to the cablelicense.

Conversely, if a cable licensee drops itsownership interest below 5%, or stops using theU.S. points of the cable, it can apply for approvalto be removed from the cable license.

Another potential snag relates to the FCCrequirement under Section 214 of the Communi-cations Act that mandates that cable owners havespecific FCC authority to provide internationalcommon carrier services. If a cable ownerbecomes a licensee on a common carrier cable,it must also file an application for authorityunder Section 214 to provide services using thatparticular cable, even if the owner already hasreceived Section 214 authority in anothercontext to provide common carrier services.

Andy Lipman is ViceChairman of the lawfirm of Swidler BerlinShereff Friedman, andthe Chairman of thefirm’s Telecommuni-cations Group. Andy’spractice is one of thelargest in the nation

and extends to all areas of telecom-munications and information technology.

Andy is a graduate of the University ofRochester (summa cum laude) and theStanford Law School.

He is a member of the District ofColumbia and California Bars and theAmerican Bar Association and the FederalCommunications Bar Association.

Troy Tanner is OfCounsel with the lawfirm of Swidler BerlinShereff Friedman, LLPwhere he advises clientson internationaltelecoms regulatorymatters. Prior to joiningthe Firm in 1999, Troy

was Chief of the International Policy andFacilities Branch at the FederalCommunications Commission.

Troy is a graduate of Brigham YoungUniversity (with Honors) and GeorgeWashington University Law School.

He is a member of the District ofColumbia and Virginia Bars and the FederalCommunications Bar Association.

22

FCC requires more than a license –requirements that may snag the unwary.

Once a cable owner has made thedetermination as to whether it needs to be alicensee, it has only begun to scratch the surfaceof potential FCC regulatory obligations. Someof these obligations only apply to licensees, whileothers apply to all cable owners, including IRUowners and leaseholders. Listed below are anumber of these requirements, and a shortsummary of their applicability.

Ownership Changes: A cable licenseemust receive prior approval from the FCCfor any changes to its control. In particular,any change in the licensees’ ownership thatresults in a new entity having more than50% of the licensee’s stock must receiveprior approval. This obligation catchesmany licensees off-guard because it caninclude pro forma changes in ownershipsuch as restructurings and Chapter 11filings, even when the licensee remainsin control of its assets as a debtor-in-possession. There is one exception underthe new rules that allows for post-notification of pro forma ownershipchanges affecting licensees of cables thatwere licensed or had their licenses modifiedafter the new rules went into effect.Traffic and Revenue Reports: Pursuantto Section 43.61 of the FCC’s rules,common carriers that provide international

telecommunications services are requiredto annually report their traffic and revenuedata. One cautionary note on thisrequirement is that the FCC generallyconsiders providing bandwidth as a typeof private line service. Therefore, if aforeign carrier has whole circuits on a cableto the United States, and sells bandwidthor private lines all the way to the UnitedStates, it could be subject to this filingrequirement, not to mention needing FCCSection 214 authority to operate as a U.S.common carrier.Circuit Status Reports: Pursuant toSection 43.82 of the FCC’s rules, carriersowning U.S. cable circuits must reportannually the status of all active and idleinternational circuits. This includes cableowners having outright ownershipinterests, IRUs, and/or leasehold interestsin bare capacity in a cable. All facilities-based international circuits must bereported, regardless of whether theunderlying facility is common carrier ornon-common carrier in nature. Therefore,even owners of IRUs on private cablesystems are subject to this filingrequirement.Annual Regulatory Fees: The FCC assessesan annual regulatory fee on most carriersthat own U.S. submarine cable circuits,whether they are a cable licensee or not.

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This requirement applies to facilities-basedcommon carriers providing service to endusers or resale carriers, and privatesubmarine cable operators that sell circuitson an IRU basis or lease to customers otherthan international common carriers. Theseentities pay a fee based on the number ofactive 64 KB equivalent circuits they own.This year the fee is US$2.67 per circuit. Inprevious years, the fee has been as high asUS$11 per circuit. A circuit is considered“active” if it is not idle. An idle circuitwould include unlit circuits, as well as

circuits that are lit but not presently usedfor a service. For instance, circuits lit butundergoing testing are considered idle.This designation is significant because onlycircuits that are active as of December 31of each year are subject to these regulatoryfees.

The Bottom Line: Bite the Bullet Before theFCC Bites Your Cable.While it is impossible to predict every potentialaction that might bring FCC enforcement action,cable capacity owners, including IRU and

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leaseholders, should arm themselves with a basicknowledge of the FCC’s regulatory requirementsand make sure that all required FCC filings arebeing made. Moreover, when you find yourcompany contemplating new business plans,investments, or changes in ownership structure,a bell should go off that before proceeding, youshould check with legal counsel as to the FCCregulatory implications. A little preventiveaction now ultimately will pay for itself in thelong-haul by avoiding costly FCC 427208v2enforcement action.

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Recently, Gulf Fiber, LLC announced that amajor customer had signed a long-termagreement for broadband communications onits undersea fiber system, FiberWeb.

This milestone has added fuel to GulfFiber’s plans, already underway, to commissionand expand the FiberWeb undersea fiber opticnetwork throughout the Gulf of Mexico (GOM).Engineering is underway to achieve systemcommissioning in 2004. The system will carryan initial capacity of OC-48 (2.5Gb) over eachof four fiber pairs around the edge of the GOMcontinental shelf, and will be upgradeable tomany times its initial capacity.

The task now is to communicate withpotential users in the GOM to ensure that thesystem meets the needs of the oil producingcommunity, both in its implementation strategyand its geographic presence. Gulf Fiber seeksfeedback from the GOM community at thisplanning stage so that the network can be‘shaped’ to meet the needs of its core customers.

Current State of PlayDemand for broadband fiber communicationsservices has now begun to drive the systemconstruction schedule. Major oil producersunderstand the potential value which secure

broadband communications can bring to theiroperations, and are now taking action toimplement these systems.

In May, press releases announced, “BP hascontracted with (Gulf Fiber) for fiber opticcommunications services to several of its newdeepwater developments in the Gulf of Mexico,including Thunder Horse, Mad Dog, Holstein andAtlantis. Several other BP platforms are also understudy for addition to the system”. The currentschedule for system commissioning is the thirdquarter of 2004, with the reinstatement of theshore landing sections in Texas and Louisiana,and the installation of the deep water system.This milestone not only secures an important“anchor tenant” agreement for the system, butalso allows Gulf Fiber to expand its footprint intoa strategically important region.

The Growing FiberWeb FootprintThe deepwater fields in the Viosca Knoll, GreenCanyon, Atwater and Mississippi Canyon blockscontain some of the most significant reserves inthe Gulf region, subject to substantial newinvestment in exploration and production inrecent years. The new FiberWeb route willtraverse all four regions via a 700km loop,spanning existing platform landings at GC-19and MC-268, running eastward, roughly alongthe 2000-meter curve.

The remainder of the system runs along theedge of the continental shelf westward to the

SEA CHANGEGulf FGulf FGulf FGulf FGulf Fiber System: The Coming Sea Change iniber System: The Coming Sea Change iniber System: The Coming Sea Change iniber System: The Coming Sea Change iniber System: The Coming Sea Change inGulf of Mexico CommunicationsGulf of Mexico CommunicationsGulf of Mexico CommunicationsGulf of Mexico CommunicationsGulf of Mexico Communications

By Jim ByousBy Jim ByousBy Jim ByousBy Jim ByousBy Jim Byous

26

shore landing in Freeport, and landing inFourchon to the east. The system footprint,sitting astride the edge of the shelf, allows GulfFiber to reach out to the new developments indeep water, while at the same time allowingexpansion onto the shelf to the more than 3500platforms, which comprise the majority of theGOM customers.

Reaching Out to the CustomersFiberWeb will not succeed via the backbonesystem cable alone. Gulf Fiber realizes that inorder to really change the GOM communicationsinfrastructure, FiberWeb will have to be availableto all customers who require broadbandcommunications (a list which is steadilygrowing, with the advent of new applications).

Toward this goal, Gulf Fiber and theirtechnology partner, Ocean Specialists, Inc., aredeveloping unique applications to allowinexpensive, rapid connection of platforms,including robust, thin fiber cable, deployed andburied from a high power cable burial ROV,expansion modules on the seabed which willallow branching from the backbone via wet-mateable fiber connections, and fast,inexpensive fiber riser systems for connectingmobile drilling units within a field already wiredfor fiber via a wet-mate connection during thedrilling campaign. Additionally, Gulf Fiber’ssister company, PetroCom, is developingwireless, “last mile” techniques for connecting

groups of platforms to fiber in a “spoke and hub”configuration, allowing rapid deployment offiber connection without the marineconstruction requirement. These wirelessconnections will be done only over shortdistances, where a secure, broadband connectionwill allow full fiber service with maximumsystem security against storm and otheraggression threats.

Using these innovative methods, Gulf Fiberplans to make fiber service widely available tousers in the field, both fixed and mobile.

A Unique Offering to the Oil IndustryThe FiberWeb system represents a uniqueoffering in the world of offshore oil industrycommunications. Up to now, oil producersdesiring to have fiber communication service totheir platforms have built and owned theinfrastructure themselves, whether solely, or inisolated cases, forming small consortia to sharethe burden. A submarine fiber communicationssystem represents a substantial capitalinvestment, as well as a significant annualoperating expense, requiring specialized skill setsto be brought in-house to support. Such aninvestment typically represents a burdensomedeparture from the core business offering of theoil producer.

Gulf Fiber is changing this model byoffering service on the FiberWeb system on a‘capacity lease’ basis, offering scalable bandwidth

on a Restored and Maintained basis. Restoredbecause the Ring Architecture allows instantrestoration of service in the event of a systemfault, and Maintained, in that the system willemploy the services of a cable maintenance shipto respond immediately to repairs on a year-round basis. This offering allows the oilproducers to access fiber bandwidth services fromT-1 (1.55Mb) to DS-3 (45Mb) and up, withouthaving to purchase or operate their owninfrastructure.

Ensuring System SecurityCables, umbilicals and pipelines situated in theGulf of Mexico are exposed to a number ofexternal aggression threats, the majority ofwhich are man-made, created by seabed users,which include oil, shipping and fishing interests.The most significant of these is the fishingindustry, who, through their aggressive shrimptrawling techniques has caused damage to anumber of cables in the region, generally in theshallow continental shelf areas.

Risk mitigation to ensure system securitywill take a number of forms. First, the new routeis being carefully designed in a way that willminimize risks due to fishing activity andpipeline crossings. A full seabed survey will verifyand optimize this design. Gulf Fiber will employindustry-proven subsea cable installation andburial specialists to ensure that the system cableis installed to state-of the industry standards, and

27

buried to specification throughout thecontinental shelf region. The recent boom insubsea cable installations has seen thedevelopment of very high-horsepower tools andnew techniques to ensure deeper, more positivecable burial, to ensure that the FiberWebinstallation specifications are met or exceeded.

Gulf Fiber is also partnering with PetroComto provide network operation and managementservices, including the diagnostic monitoring ofthe fiber system through its dedicated NetworkOperations Center (NOC) in Harahan, LA. TheNOC will provide 24x7x365 monitoring of allsystem functions, repair and maintenanceservices for all network components, and a 24-hr Helpdesk service to all offshore users. In somecases, Petrocom are also providing datarestoration via their Satellite network, thusallowing a tertiary restoration facility tocustomers who desire this added level of security.

The combined infrastructure of thenetwork management services, robustinstallation and route design, and fully-availablecableship maintenance and repair facility, ensurethat the customer’s communication service issecure and managed, leaving the customer freeto concentrate their valuable resources on oilproduction rather than telecommunications.

Weather – The Other Aggression ThreatLast year, Hurricane Lili and Tropical StormIsidore roared through the Gulf, causing large-

scale evacuation of facilities, and eventually lossof communications along a significant portionof platforms in their paths. In October of 2002,MMS compiled a report which cited theproduction loss due to these storms in the rangeof $450Million, a large percentage of which wasrelated to the MMS requirement to shut-inproduction wells upon loss of communicationsaboard unmanned platforms.

Just recently, Hurricane Claudette onceagain reminded us of the force and frequency ofthese storms. Early data as of this writingindicates that a significant number of platforms

lost communication as a result of this storm.Production losses have not been ascertained.

In contrast to wireless communicationsystems, which rely on precise alignment ofexposed antenna systems, submarine fiber boardsthe platform through steel J-tubes or I-tubes,which protect the cable to depths far below theeffects of storm activity, and the fiber terminatesin a protected communications room, free fromexposure to the storm. During Lili, the stormtrack ran directly across one existing cablesegment, putting a terminal platform in thedangerous northeast quadrant of the storm. One

Thursday, October 33:00 am

Windspeed 120mph

Thursday, October 31:00 am

Windspeed 135mph

Storm track published in Preliminary assessment report by MMS news release, 16 October 2002

28

producer aboard an existing FiberWeb terminalplatform stated that after all of his wirelesssystems were destroyed, FiberWeb was his onlymethod of communicating off the platform.

New Applications Cause Surging DemandFeedback to Gulf Fiber from major oil producers inrecent months has indicated that their demandfor bandwidth may indeed exceed originalexpectations. These producers have indicated thatapplications such as 4-D Seismic, transmitted toshore real-time instead of recorded in-situ, remoteplatform operations and enhancedinstrumentation, and broadband datacommunications such as corporate intranet andextranet facilities for staff (including videoconferencing), are all planned for near-termdeployment on many facilities. Discussions havealready prompted Gulf Fiber to initiate engineeringefforts to allow for Wave-Division multiplexing ofthe four fiber pairs currently planned, allowingretro-fit upgrade of system capacity many multiplesover the current 10Gb currently contemplated overthe aggregate fiber pairs.

Gulf Security – A Growing ConcernIn the current security-conscious environment,it is notable that the Gulf of Mexico is one ofthe least-security conscious industrialenvironments in the U.S. region, yet its offshorereserves are second only to Alaska in terms ofdomestic reserves. The Port of Houston is ranked

first in the U.S. in terms of waterborne commerce,and eighth in the world. Seven out of the tenbusiest ports are located along the Gulf Coast.Plans are currently underway for major LNGoffloading facilities offshore the Gulf Coast, andof the just under 4000 platforms in the GOM,the majority are unmanned, with little or noindustrial security facilities in place on thesestructures.

U.S. security agencies and contractors havedeveloped over recent years a variety of securityand surveillance applications ranging from radarand aerial surveillance via tethered vehicles, toundersea acoustic monitoring and platform-mounted security monitoring systems. Most ofthese applications require secure bandwidth viafiber to reach their potential.

Lack of a fiber network has held back thedeployment of many of these applications, butFiberWeb, positioned to encircle the continentalshelf of the GOM, is well-positioned to providea transport mechanism for these applications.In allowing access to a large number of shallowand deepwater facilities, Gulf Fiber hopes tofoster the efficient deployment of securitysystems, both private and Government-operated.Gulf Fiber has recently become a signatory tothe Gulf Coast Ocean Observing System(GCOOS), a federally-mandated body whosemission includes assisting the U.S. Scientific andGovernment communities in the collection ofdata to encourage economic growth in the

region, and the advancement of scientific andsecurity interests.

ConclusionIt’s time to get the message out; FiberWeb is onthe way, and aiming not only to meet the currentcommunication needs of the GOM, but actuallychange the way in which the offshore industrycommunicates. This goal cannot be achievedwithout support and input from regionalcustomers, who can help steer the strategic andgeographic positioning of the system.

Jim Byous is a Directorof Gulf Fiber, LLC, andis actively involved indesign, constructionand recommissioningof the FiberWebnetwork. He has beeninvolved exclusively in

submarine cable installation andmaintenance for the past 17 years, formuch of that time specializing in theprotection of cable systems in high-riskcontinental shelf environments. UntilNovember 2002, Jim served as Director,Americas, for Global Marine Systems. Jimalso currently serves as Managing Directorof Ocean Specialist Services, located inStuart, Florida.

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The issue of maritime security is a matter ofcritical importance to all marine companies.

Certainly maritime security is of vitalinterest to Singapore and the region. Some ofthe most important shipping lanes and traderoutes straddle the archipelago of Southeast Asia.

Over a quarter of the world’s trade and halfits oil pass through the Malacca Straits. But it isnot merely the littoral states that have a stake inthe safe passage of ships through thesewaterways.

In a world linked by international tradeand commerce, and with a global economy builton integrated supply chains, any disruption tothe security of navigation in these waters wouldbe a shock to the international system. Thiswould clearly induce severe implications fortrading nations all around the world.

Why are ships easy prey?Low manning of shipsLack of effective implementation ofstrict anti-piracy measuresShips are often registered under flags ofconvenience registersReluctance by governments to provideresources to pursue piracyinvestigations.

PiracyIn recent times there has been a substantial risein hijackings in the waters neighbouringSingapore, up from 16 to 25 incidents in 2002.

Many such incidents involved smallerboats, such as tugs, barges and fishing boats, inthe Malacca Straits and Indonesian waters. Crimesyndicates in the area were believed to betargeting vessels carrying valuable palm oil andgas oil.

Indonesia again experienced the highestnumber of attacks, with 103 reported incidentsin 2002. Piracy attacks in Bangladesh rankedsecond highest with 32 attacks and India wasthird with 18 attacks.

“Indonesia’s piracy problemcalls for serious governmentaction.”

International Maritime Bureau.

Small scale Piracy:Rob the crew and departAttacks usually take place whilst thevessel is at anchor or in portShip’s safe is often targetedOccasionally the ship is taken to be sold.

Large scale Piracy:Rob the crew and steal the cargoCargo easily disposed of is usuallytargeted, ie timber, metals and mineralsOccasionally the ships engines are takenUsually part of a larger criminalorganisation.

MARITIMESECURITY

THE NEED FORAWARENESS AND

COMPLIANCEby Roger Carver

31

Phantom shipsRobbers steal the shipRe-paint, re-name, re-flag and re-registerOffer the services of the ship to a shipperSail to an undisclosed destinationUnload the cargo to be sold, then repeatthe processNearly always part of a larger criminalorganisation.

What is being done?The issue has come to a head post September 11and the world’s subsequent response to terrorism.

A new, comprehensive security regime forinternational shipping is set to enter into forceon 1st July 2004 following the adoption by aDiplomatic Conference of a series of measuresto strengthen maritime security and prevent andsuppress acts of terrorism and piracy.

The International MaritimeBureau’s figures show reportedworldwide piracy acts were up18 % in the first quarter of 2003.

The Conference, held at the Londonheadquarters of the International MaritimeOrganization (IMO) from 9 to 13 December 2002,was of crucial significance, given the pivotal roleshipping plays in the conduct of world trade.

The Conference adopted a number ofamendments to the 1974 Safety of Life at Sea

Convention (SOLAS), the most far-reaching ofwhich enshrines the new International Ship andPort Facility Security Code (ISPS Code).

The Code contains detailed security-relatedrequirements for Governments, port authoritiesand shipping companies in a mandatory section(Part A), together with a series of guidelines abouthow to meet these requirements in a second,non-mandatory section (Part B).

IMO is concerned that piracy continues tobe a major threat to shipping safety. During thelast few years South East Asia has been the sceneof numerous pirate attacks and armed robberiesand this is a problem not only for the crews andship owners, but for the coastal States as well.

The Resolutions require new Ship SecurityPlans:

Every shipping company mustdesignate a Ship Security Officer foreach of its ships.This officer will be responsible forimplementing the Ship Security Plan.

Compliance with New IMOMaritime Security Measures is dueby July 2004.

The Resolutions go on to require that:A Ship Security Assessment is completedfor each ship according to IMO andGovernment regulations.

Ship Security Plans are prepared andsubmitted for approval by ContractingGovernment.Each ship carries on-board an approvedShip Security Plan.

Who can help?Companies with experienced security andmaritime professionals on staff can ensure yourprompt compliance with the relevant IMOResolutions and allow you to spend yourtimedeveloping your business withoutdistraction.

Originally with the BritishRoyal Navy, Roger F.Carver is extensivelytrained in counterinsurgency. Upon leavingthe Royal Navy, heremained within the

maritime environment, working as a marineand security consultant with variousorganizations around the world. He is nowresident in Singapore.

Roger has spent the last eight years as aconsultant to various companies installingSafety Management and Security Systems.He is Managing Director of Nemesis MaritimePrivate Limited.

32

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A global guide to the latest known locations of theworld’s cableships, as at SEPTEMBER 2003.

SAILING DETAILS (or last known location)Vessel Name Built Best Contact GT Speed

Sailed Date Port Country

ARCOS 2002 BOHLEN & DOYEN 3790 0 29/08/03 Singapore Republic of Singapore

ASEAN RESTORER 1994 SINGAPORE TELECOMMUNICATIONS 11156 16 02/08/03 Batangas Philippines

ATLANTIC GUARDIAN 2002 GLOBAL MARINE SYSTEMS 7172 14.4 Baltimore United States of America

BOLD ENDURANCE 1979 SECUNDA MARINE 9418 14.3 25/07/03 San Francisco United States of America

C. S. NEXUS 1972 FISHER & SONS 11000 12 02/08/03 Lerwick United Kingdom

CABLE INNOVATOR 1995 GLOBAL MARINE SYSTEMS 14277 11 23/08/03 Dover Strait United Kingdom

CABLE PROTECTOR 2002 SINGAPORE TELECOMMUNICATIONS 2935 0 24/08/03 Singapore Republic of Singapore

CABLE RETRIEVER 1997 SINGAPORE TELECOMMUNICATIONS 11026 16 25/07/03 Keelung Taiwan

CERTAMEN 1965 ITALMARE 4983 14 11/07/03 Toulon France

CHAMAREL 1974 NOT APPLICABLE 8575 16.5 Cape Town South Africa

DISCOVERY 1990 FRIARY OCEAN 8248 12 24/08/03 Tees United Kingdom

ELEKTRON 1969 STATNETT ENTREPENOR 1628 0 01/09/03 Gothenburg Sweden

34

SAILING DETAILS (or last known location)Vessel Name Built Best Contact GT Speed

Sailed Date Port Country

FJORDKABEL 1985 NOT APPLICABLE 331 0 15/07/03 Bergen Norway

GIULIO VERNE 1983 V. SHIPS GROUP 10617 10 06/08/03 New Haven United States of America

HAVILA SKAGERRAK 1976 HAVILA SHIPPING 7172 10 30/08/03 Forsmark Sweden

ILE DE BATZ 2001 NOT APPLICABLE 13973 15.4 01/09/03 Singapore Republic of Singapore

ILE DE BREHAT 2002 LOUIS DREYFUS ARMATEURS 13978 15.4 22/08/03 Brindisi Italy

ILE DE SEIN 2001 NOT APPLICABLE 13978 15.4 17/07/03 Calais France

KDD PACIFIC LINK 1993 TOKYO LEASE 7960 13 15/08/03 Moji Japan

KOUSHIN MARU 1998 DOKAI MARINE 4822 12 15/07/03 Moji Japan

MAERSK DEFENDER 1996 MOLLER A.P. 5746 16 01/09/03 Dover Strait United Kingdom

MAERSK RECORDER 2000 MOLLER A.P. 6292 14 15/08/03 Dover Strait United Kingdom

MANTA 1992 JADE-DIENST 2723 15 24/07/03 Tees United Kingdom

MIDNIGHT WRANGLER 1983 NOT APPLICABLE 5623 11 05/08/03 New Orleans United States of America

MISS CLEMENTINE 1996 COASTLINE MARITIME 3637 9 19/08/03 Indonesia Indonesia

NORDKABEL 1969 NOT APPLICABLE 395 10 14/08/03 Harstad Norway

PACIFIC GUARDIAN 1984 GLOBAL MARINE SYSTEMS 6133 10 28/07/03 Auckland New Zealand

PETER FABER 1982 NOT APPLICABLE 2854 0 19/07/03 Brunsbuttel Germany

PROVIDER 1 1978 MARINE SURVEY 10493 14 30/08/03 continental shelf United Kingdom

RAYMOND CROZE 1983 FRANCE TELECOM 4845 15 Valletta Malta

SEGERO 1998 KOREA SUBMARINE TELECOM 8323 15 22/08/03 Ulsan Republic of Korea

SIR ERIC SHARP 1989 GLOBAL MARINE SYSTEMS 6141 13.5 Bermuda Bermuda

35

SAILING DETAILS (or last known location)Vessel Name Built Best Contact GT Speed

Sailed Date Port Country

SKANDI NEPTUNE 2001 DISTRICT OFFSHORE 6318 14 Tees United Kingdom

SUBARU 1999 JAPAN (GOVT.) 9557 13.2 30/07/03 Yokohama Japan

TELIRI 1996 ITALMARE 8345 14.5 27/07/03 Augusta Italy

TENEO 1992 TRANSOCEANIC CABLE SHIP 3051 14.5 25/08/03 Gijon Spain

THOMAS C 1970 NOT APPLICABLE 702 13.5 04/08/03 New York United States of America

TOISA PISCES 1997 BROKERAGE & MANAGEMENT 6475 14.5 Galveston United States of America

WARTENA 1958 NOT APPLICABLE 407 9.5 26/08/03 Szczecin Poland

WAVE SENTINEL 1995 GLOBAL MARINE SYSTEMS 12330 18.25 03/08/03 Dublin Republic of Ireland

WAVE VENTURE 1982 GLOBAL MARINE SYSTEMS 10076 16 29/07/03 Singapore Republic of Singapore

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ORGANISING ACONFERENCE?Give your exhibition or conferencemaximum exposure to the subma-rine telecoms industry.Advertise your event inSubmarine Telecoms Forumand reach all the key people.Email:advertising@subtelforum.com

HowHowHowHowHow’s your image?’s your image?’s your image?’s your image?’s your image?BJ Marketing CommunicationsSupporting companies in the submarine cable industry for over 10 years

Brochure and literature design and production Exhibition design and management Website design and maintenance

Contact Ted BreezeTel +44 1206 230472 Fax +44 1206 231640Email ted.b@virgin.net

36

37

SMW4 : Oasis or Mirage?SMW4 : Oasis or Mirage?SMW4 : Oasis or Mirage?SMW4 : Oasis or Mirage?SMW4 : Oasis or Mirage?When you receive this letter, the SMW4 offersfrom the suppliers will have already beensubmitted (September the 8th).

SMW4 looks like an oasis in the middleof the desert! A several $100M project! Notseen for a while! Let’s hope it will not end upbeing a mirage!

and SMW3, only. Even if these two cables werefully upgraded, the installed capacity would onlybe measured in Gigabits!

So the need is real, particularly betweenIndia and the Med.

By the way, the above facts show that noone should see SMW4 as the first cable of a newphase of submarine cable projects, but rather likethe missing one from the previous phase. It isalso worth noting that SMW4 is a “carrier’s”cable, and not a FLAG 2. Has this anysignificance for the future business?

I can put myself in the shoes of thesuppliers and see the importance of such aproject. A buoy! A must be in! Not being partof this action will be dangerous since the marketneeds several more years to pick up! This projectwill undoubtedly play an active role in shapingthe future supplier industry.

Thank God and geography this cable isstructured in several segments and then“splittable” between several suppliers if thepurchasers want!

All the parties involved here, purchasersand suppliers alike, need for sure to protect theirshort-term interest. But they also have theopportunity to work for the long-term generalinterest of our industry.

Things should be clear when we meet atSubOptic 2004.

See you there.

Jean DevosJean DevosJean DevosJean DevosJean Devos

Letter toa friend

from Jean Devos

It could be the case if the carriers involveddo not manage to fund the full project, whichruns from Singapore to Marseilles. But theprobability that it flies is quite high.

When most of the world’s routes have beenequipped with Terabits cable, often several, andoften too many, this route is equipped with FLAG

New Times- New Strategies:ICT Rising from the Ashes

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New Times - New Strategies, the theme for PTC’04, emphasizes theopportunities that currently exist in the global marketplace for informa-tion and communication technologies (ICTs). While North America andEurope still struggle to reinvigorate their economies, several Asian coun-tries have surged ahead in leadership positions with new technolo-gies. PTC’s annual conference offers a congenial venue to interactwith major players in the Asia-Pacific region. The conference has longbeen the most important event that ties Asia to the Americas and therest of the world.

Seize this golden opportunity to maximize your total participationin PTC’04:• register early and save • exhibit • sponsor • advertise

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DiaryDiaryDiaryDiaryDiary FORTHCOMING CONFERENCES AND EXHIBITIONS

22-26 September 2003 Oceans 2003 MTS/IEEE, San Diego, California, USA, www.oceans2003.com/

24-26 September 2003 Submarine Networks World 2003, Singapore, www.carriersworld.com

7-8 October 2003 4th India Telecom Conference, Mumbai, India. www.indianteleconference.com

12-18 October 2003 ITU Telecom World 2003, Geneva, Switzerland, www.itu.org

24-26 November 2003 Hydro 2003: 4th Australasian Hydrographic Symposium,

Christchurch, New Zealand, www.hydrographicsociety.org.nz/conference.htm

17-19 February Underwater Intervention 2004, NewOrleans, Louisana, USA. www.underwaterintervention.com

11-14 January 2004 Pacific Telecom Conference 2004, Honolulu, Hawaii USA. www.ptc.org/ptc2004

16-19 March 2004 Oceanology International 2004, London, UK, www.oceanologyinternational.com/

28 March - 1 April 2004 SubOptic 2004, Principality of Monaco, www.suboptic.biz

15-18 June 2004 CommunicAsia 2004, Singapore, www.communicasia.com