Facebook and Microsoft To Build Fiber Optic Cable Across Atlantic
May 26 2016 - 6:20PM
Dow Jones News
Facebook Inc. and Microsoft Corp. have teamed up to build a new
fiber optic cable under the Atlantic Ocean, the latest evidence
that the biggest U.S. tech companies are seeking more control over
the Internet's plumbing.
The new project, called Marea, will span the more than 4,000
miles between Virginia and Spain with eight pairs of fiber optic
strands, which would make it the highest capacity link across the
Atlantic. The Web companies joined with Spanish Internet carrier
Telefó nica SA to build the cable, which is expected to enter
service next year.
The cable, named for the Spanish word for tide, is the latest in
a string of big-budget Internet infrastructure projects Web
companies have pursued to gain more control over their data.
Microsoft and Facebook have previously invested in other
trans-ocean cables, as has Alphabet Inc., which owns Google, and
Amazon.com Inc.
In a joint statement Thursday, the companies said the new cable
will help to lower costs, accelerate bandwidth rates and help
accommodate the explosion of data use around the world, both for
commercial use such as cloud-computing and personal use like
sharing photos on social media.
Microsoft also wanted to build redundancy in its network and
invest in an area where cables don't run, said Christian Belady,
its general manager for data center strategy. Many of the
trans-Atlantic cables originate in the New York area and run to
Northern Europe.
"We were looking for other places" away from New York, Mr.
Belady said. "You want to make sure you have multiple paths. You
can't survive on one cable, or frankly two."
The wholesale price of shuttling data across continents has been
plunging for the past 15 years, leaving traditional telecom
companies scrambling for a way to make a profit. But that fall
hasn't been steep enough for the biggest U.S. tech companies that
need to send data for billions of accounts through dozens of data
centers around the world. Because the investment costs are high,
only the very largest Internet companies have made the plunge.
The shift has made the biggest Web companies the driving force
behind some of the telecom industry's most expensive subsea cable
projects, according to Alan Mauldin, research director for the
market analysis firm TeleGeography.
"These companies, they don't really need anybody else to get a
cable funded," Mr. Mauldin said. "They have a large say in
determining, for the Atlantic for sure, what gets built and
where."
The companies declined to provide a cost estimate for the cable.
New trans-Atlantic cables usually require more than $200 million to
build, Mr. Mauldin said, though expenses vary widely depending on
the project. The companies must also seek regulators' approval for
lines that domestic security agencies consider part of their
countries' critical infrastructure.
The biggest Web companies mostly have focused their investments
on heavily trafficked Internet corridors that tie together cities
in Europe, the Americas and East Asia, where they own data centers.
Projects like Google Fiber and Facebook's wireless broadband
programs, aimed at making the Internet more accessible to
consumers, are separately managed.
Google was an early mover when it teamed up with partners to
build a 6,200-mile line across the Pacific Ocean, a project
completed in 2010. It is in the process of finishing another
trans-Pacific cable and an Atlantic line from the U.S. to
Brazil.
Marea is Microsoft's third public investment in a trans-Atlantic
cable. It has led the U.S. investment in the New Cross Pacific
Cable to China. Amazon.com Inc. recently joined the club with an
investment in the Hawaiki cable from Oregon and Hawaii to Australia
and New Zealand.
Telefó nica's new infrastructure company, Telxius, will manage
the high-speed link once it is finished, though its design still
gives Facebook and Microsoft control over their data. The setup
allows each company to pass information over their own dedicated
fiber optic lines and to upgrade the equipment at each end when new
hardware becomes available.
Deepa Seetharaman and Jay Greene contributed to this
article.
Write to Drew FitzGerald at andrew.fitzgerald@wsj.com
(END) Dow Jones Newswires
May 26, 2016 18:05 ET (22:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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