
$1.5 billion: The cost of cutting London-Toyko latency by 60ms - evo_9
http://www.extremetech.com/extreme/122989-1-5-billion-the-cost-of-cutting-london-toyko-latency-by-60ms
======
karamazov
The title of the post makes this sound frivolous, but it actually seems like a
worthwhile endeavor. 60 ms * the number of packets sent back and forth is
significant; and, as the article points out, it'll also add redundancy to the
cable network between Asia and the rest of the world.

~~~
bradleyland
Absolutely. Voice traffic is a big consumer of IP bandwidth these days. The
difference between a call made over a link with 170 ms of latency and 230 ms
of latency is significant. In conversational terms, the average call
participants will start being annoyed at around 300 ms. At 230 ms, any hiccup
is going to make the call pretty frustrating. Shaving 30% off that latency
buys you some headroom and better general conversational performance.

In a greater sense, voice can teach you a lot about the challenges of network
various conditions. You can pick and chose a codec to work around a low
bitrate, or even high loss rates, but when working with latency, you're stuck.
This looks like $1.5 billion well spent.

~~~
egiva
Actually, the plan for this arctic cable is mostly driven by the needs of the
financial-services industry in London and Tokyo (i.e. high frequency trading,
ultra low latency direct market access, etc).

~~~
smutticus
HFT is using colo servers sitting as close as possible to the servers actually
handling the transactions. No one serious about doing HFT is even considering
switching traffic for more than a few miles if they can avoid it. This cable
has nothing to do with HFT.

~~~
obiterdictum
If you are trading only one market, no. If you do arbitrage across two or more
exchanges, then it matters.

------
latch
It looks like Artic Link is going to bring it down to 86ms [1] with an initial
capacity (surprised they didn't talk about that) of 2FP x 8λ x 40Gbps =
640Gbps.

The Artic Fiber website is full of good information, including expected
latency between a bunch of cities, and high level colocation options [2].

All I could find on the Russian initiative was this simple website [3]. Total
available capacity is 100WL x 100 Gbit/s, but no idea what phase 1 will be.

[1] <http://www.arcticlink.com/home.html>

[2] <http://www.arcticfibre.com/service-offerings.html>

[3] <http://www.polarnetproject.ru/>

------
guimarin
The first benefit of global warming?

"Until now it has been impossible to lay cables in the Arctic Ocean, but the
retreat of the Arctic sea ice means that the Northwest Passage is now
generally ice-free from August to October..."

~~~
ars
May not be the only benefit, during the Medieval Warm Period humanity
benefited greatly from increased crop yields and milder winters.

~~~
psykotic
> May not be the only benefit, during the Medieval Warm Period humanity
> benefited greatly from increased crop yields and milder winters.

"Humanity" meaning Northern Europeans? The MWP led to prolonged droughts and
floods throughout other parts of the world.

~~~
ars
Other parts of the world didn't keep as good records, so the data is not
great. A drought in north America seemed clear, but other parts of the world
did not seem to be badly affected.

That's kind of the nature of change - some benefit, others loose. Anyway, I
was just listing another example of a benefit, not trying to make a value
judgment.

~~~
Tsagadai
There is a hypothesis that the Angkor civilization collapsed due to the lake
and wetlands around the city drying up. It is widely agreed that at the time
the city around Angkor Wat was the largest in the world. The Angkor
civilization collapsed at roughly the time of the Medieval warming period.

It is just a hypothesis but a very interesting one.

------
danvk
Who pays for these cables? Is it the governments or are they entirely
privately financed?

~~~
excuse-me
Private. Either a group of investors do it and look for telco customers to
rent bandwidth to. Or cable laying companies like Cable and Wireless will lay
a cable if they have spare capacity and try and sell it. Or sometimes a
consortium of telcos will lay a cable.

Outside china I can't see a government fronting money for a cable

------
peteretep
This seems relevant:
[http://www.ted.com/talks/kevin_slavin_how_algorithms_shape_o...](http://www.ted.com/talks/kevin_slavin_how_algorithms_shape_our_world.html)

It's a talk about how physical geography is being shaped by HFT...

------
aprescott
Whenever submarine cables comes to my attention, the one thing I'm always
curious about is what happens when they break?

This article links to another they posted[1] and they then link to
Wikipedia[2], and there's some exposition given on what happens when things
break, but if these things are 3 inches thick and thousands of miles long,
other than burying them and having ships nearby to go out and make repairs, is
there anything special that the maintainers of these cables do to safeguard
against damage? Has anyone covered that in a good article somewhere that I can
read?

Not only that, but while a cable is broken, are there redundant cables along
the same path, or is traffic routed around the problem via some long detour?
Is there a way to see the cut-off from cross-continent round-trip time graphs?

[1]: [http://www.extremetech.com/computing/96827-the-secret-
world-...](http://www.extremetech.com/computing/96827-the-secret-world-of-
submarine-cables)

[2]:
[http://en.wikipedia.org/wiki/Submarine_communications_cable#...](http://en.wikipedia.org/wiki/Submarine_communications_cable#Modern_history)

~~~
aristus
There are fleets of cable ships all over the world who are paid a retainer to
repair breaks. When losses are calculated in tens of thousands of dollars a
second (edit thousands per minute) it's worth it. On the off time they pull up
and scrap defunct cables, as they can be a hazard to shipping traffic (think
anchors).

~~~
moe
_tens of thousands of dollars a second_

That seems a little on the high side.

A cable break is expensive, but not 1 billion dollar/day expensive.

~~~
justincormack
No, not if it only costs $1.5bn to install one.

------
icefox
"All three cables will connect the United Kingdom to Japan, with a smattering
of branches that will provide high-speed internet access to a handful of
Arctic Circle communities."

I can see it now. You can get fiber in the arctic circle, but you can't get
fiber in <insert local town> near <big city>!

~~~
aes256
It figures; it's an awful lot easier to lay cable under the sea than it is to
do so in towns and cities.

------
ars
For High frequency trading, wouldn't it be easier to just have a remote
desktop?

Is there a reason the trades need to placed so far from the exchange?

~~~
adaml_623
I think you must realise that there are multiple exchanges involved in the
'market' which these traders operate in. The speed of placing an order is
important but the information about other related prices and indices is also
very relevant. Getting this information 60ms before other market participants
would give you a huge advantage.

~~~
ars
60ms would make no difference to how fast a human can make a decision. This is
for automated trading.

So can't they put a computer near each market that would get the relevant
information quickly and place the order quickly as well?

~~~
micaeked
the computer would need data from the other exchange(s) as well, not just the
one its nearest to

~~~
ars
I didn't think of that, thanks.

Although aren't the exchanges open at different times? I guess there is some
overlap.

~~~
adaml_623
If you look at the bottom of the 24 hour graph here
(<http://www.kitco.com/charts/livesilver.html>) you can see the opening hours
for different exchanges around the world. You can see that for a few hours
London, New York, and Hong Kong or New York, Hong Kong and Sydney are open.
It's quite interesting and of course a bit of a headache if you have to work
in a multi-timezone system.

------
T-Winsnes
Does anyone know if this would affect latency from Australia to the UK?

~~~
mixmastamyk
Unlikely that a route over the north pole would help. Only if the traditional
one were truly horrible.

~~~
espes
The only Australian links with any affordable capacity go through to the US,
which is how UK traffic is routed :/

------
guelo
There is all kinds of activity happening because of the opening of the north
west passage including billion dollar bets like this one. But the global
warming deniers keep denying. It's baffling.

~~~
sukuriant
Some would argue it's a natural cycle and not especially caused by humans.
Other comments in this thread allude to something similar happening in
medieval times

~~~
guelo
Some would be making stuff up and ignoring what scientists have been telling
us.

~~~
gaius
You mean, like that CO2 lags not leads temperature change?

~~~
bellaire
Not at all. It is true that CO2 has never led temperature change before;
that's because the massive anthropogenic CO2 spike in the data is completely
unprecedented, so we don't know what happens when CO2 increases massively "on
its own".

Climate scientists try to figure out whether this could affect global climate,
and many say it can and probably is. This latter thing is what is being
ignored.

------
twiceaday
It would be good news for esports. Currently due to latency game companies opt
to split the world into regions and sell regionally linked copies of the game.

~~~
getsat
I don't believe that's the reason. It's a relatively new phenomenon.

If you region-lock your games, then people in Europe/Asia can't buy the
cheaper North American version and play it locally.

~~~
twiceaday
I didn't mean to imply it's on the list of reasons. Just a side effect.

------
btbuilder
Can headlines be edited? Tokyo is misspelled...

------
slackerIII
Now I have new answer for when people ask what value HFT adds.

~~~
getsat
Isn't "large amounts of liquidity" enough?

~~~
bwillard
This may be a myth. Nanex (<http://www.nanex.net/>) does a lot of detailed
analysis of the HFT. Their view, and it is supported by a lot of data and many
very detailed, if not intuitive graphs, is that HTF does not help liquidity.

~~~
getsat
I've read some of their analyses before. Most people automatically associate
HFT with the Flash Crash and claim it's bad for the market. The HFT algorithms
pulling out of the market exacerbated the Flash Crash by drastically reducing
liquidity, so there's some anecdotal evidence at any rate.

~~~
Steko
The bigger claim that it's bad for the market is because it's parasitic front
running.

~~~
getsat
Frontrunning is definitely shady, but (from what I've read) only a small
subset of HFT firms actually have the setup to do it. Those firms have custom
FPGAs implementing the minimum amount of the Infiniband spec because anything
else is too slow. They also pay a boatload to colocate their servers
physically _right_ next to the exchange backbones.

Most HFT is not frontrunning.

~~~
joezydeco
...but there apparently is enough of it where a 60 mSec advantage is worth the
$1,500,000,000 investment.

~~~
getsat
Frontrunning isn't measured in milliseconds. It's microseconds (and soon
nanoseconds).

------
mthreat
Now I don't feel so bad about spending a month of my time to make our search
results page 40ms faster at Indeed.com

------
egiva
No on mentions one of the real behind-the-scenes motives for these new lines:
Tokyo and London are major hubs for the financial services industry and
reducing even 60ms in transmit time means big bucks for High Frequency Trading
in these two stock markets: <http://en.wikipedia.org/wiki/High-
frequency_trading>

~~~
helium
Uhm, did you read the post? That is exactly what they say the reason was.

