Hacker News new | past | comments | ask | show | jobs | submit login
The future of undersea Internet cables: Are big tech companies forming a cartel? (apnic.net)
265 points by okket on April 4, 2019 | hide | past | favorite | 59 comments



Its not a cartel, Telecom is the cartel, its just plain cheaper and more reliable to do it yourself, at scale.

This should be played against the background of a lot of transit providers being consumed into the twin blackholes of GTT and Level3.

Dealing with them is a massive massive pain. They are almost always universally incompetent.

Then there are peering agreements. In the US its all a bit wonky, as it costs to do anything. As far as I'm aware there are no coop style internet exchanges, which means that peering is prohibitively expensive.

else where, in normal land, most places are coops, which means you pay a small fee and negotiate peering directly with other peers.

Given that with the concentration of traffic around 4/5 company's datacenters it makes perfect sense to tap directly into those.

Having a complete network under your control, with your QoS working globally right up to the last mile, is a worthy goal. Being <10ms away from 90% of your customers is worth the cost.


I think it's a bit far fetched to describe the current situation as a cartel. First, what is the function of a cartel? It's to coordinate supply to keep prices high. Do we really think that anything the content players have done so far would indicate any of them are trying to set pricing higher? Hardly. Second, the reason they are taking positions / building their own is that there isn't a business case to build these cables without them.


> I think it's a bit far fetched to describe the current situation as a cartel.

Well, they did specifically say it's not a cartel. Yet. I interpreted the article as an early warning to prevent them from becoming a cartel, as the author believes they have the capability to become one if they decide to.

> First, what is the function of a cartel? It's to coordinate supply to keep prices high.

No, it's to coordinate to keep profits high. Prices could fall, but less quickly than they would otherwise, and it could still be due to coordinated action. One example is if costs are falling quicker than prices, and prices drops are delayed or reduced. If consumers are hurt because they've altered the economics of the market to prevent competition, that would qualify for me.

> Do we really think that anything the content players have done so far would indicate any of them are trying to set pricing higher? Hardly.

Theoretically, they could make the market economics of new cables harder to justify, while keeping enhanced capability for themselves. Does affecting the world market to the degree that it would take a nation state to have enough money to change the status quo enough to allow competition in the data transit space count as anti-competitive? It may be that the term encompasses a lot more behavior when applied at that scale.

Do the companies in question have enough resources and power to affect the global market in that way? I have no idea. It sounds crazy, but it feels like there's more consolidation of power in these companies (with regard to online content) than other industries have had in the past, and with an industry that's as large and lucrative as this, that seems to make them somewhat unique. The dark horse here might end up being China. If there was a cartel, China would have the capability and motive to bust it eventually. Of course, if the markets China wanted to reach were politically denied from specialized lobbying, that could counter them...


Even strong cartels like opec have to deal with “cheaters” - members who break the rules just a little bit to line their own pockets opportunistically. I’m not saying trust the content oligarchy but I do think there remain sufficient sources of independent providers and the strong likelihood that there will always be someone willing to sell off some capacity that the scenario above is unlikely... probably. Ask me tomorrow and I’ll probably agree with you more!


Would have worked without those darn meddling free marketers.


The industry as a whole has been trying to do this by attacking net neutrality. Things like metered plans create artificial scarcity and allow companies to increase the price of switching packets.


That's in the retail market which is very different.


You do raise an interesting point. For ex, I saw this elsewhere on HN:

https://www.bloomberg.com/opinion/articles/2019-04-02/zucker...


Dude, the ping i get on my facebook atlantic cable is like 2ms between here and the .eu shard.

What are you getting on that other link?!

Ssure they spy on all my stuff but look at that ping!


2e-3s*3e8 m/s=6e5m. So no, you are not going to get 2ms transatlantic ping.


Light travels something like 30% slower in fibre optic cable than vacuum.

So would be more like 420 kilometres for 2ms.


And that's round trip, so ~200 km away.


About .5c for both fibre and copper - from my memories on doing a CCNA a few years back.


>Second, the reason they are taking positions / building their own is that there isn't a business case to build these cables without them.

They can, you know, contract it to an independent company. That's how most businesses in the world operate.

We're moving towards a world where Google can potentially control your computer (Android/Chromebook), your internet connection (Google Fiber), the backbone cables (article), your content (YouTube, etc) and your servers (to some extent). They are already entrenched in some of those markets.


If there is no business case to build something that is essentially infrastructure, then it is likely a natural monopoly and must be regulated.

https://en.wikipedia.org/wiki/Natural_monopoly


If I'm reading the article correctly, the situation described is almost the opposite.

Large companies, due to their scale, are building capacity on new projects rather than buying into capacity on existing ones.

If new essential infrastructure is being built by new entrants with diversified providers, diverse routes, and improved technologies it seems like a sign of a healthy market.


Even then, you could have regulatory capture.

https://en.wikipedia.org/wiki/Regulatory_capture

Speaking of regulatory capture, I think that's really what happened and why Facebook has been able to get away with, actually, murder (e.g. Facebook's free internet had a big role in the murderous riots in Myanmar [1] and WhatsApp had a big role to play in mob lynchings [2], [3]). Not to forget the slap on the wrist they have gotten for what is basically child abuse in the "friendly fraud" case [4].

But not to worry, there is another dopamine hit coming up next minute to a mobile phone near you so you can pretend you never read this comment.

In my view, it is best not to let these tech giants anywhere near these kind of ventures.

[1] https://in.reuters.com/article/myanmar-rohingya-facebook/u-n...

[2] https://www.bbc.com/news/world-asia-india-45140158

[3] https://www.bbc.com/news/world-latin-america-46145986

[4] https://www.forbes.com/sites/erikkain/2019/01/25/facebook-tu...


Back in the day telcos used to collaborate on laying cables and in fact owned ships.

Working for BT I found that there was a a whole other set of contracts and company procedures just for those employees who worked on the cable laying ships.


>Back in the day telcos used to collaborate on laying cables and in fact owned ships.

The process seems to be no different today, as the title and the content of the article suggest, rather indicates that it has become too 'collaborative'. Furthermore, owning sea-faring vessels in the grand project of laying cables, maintain and fix problems[1] is a drop in the ocean with relation to CapEx/OpEx, compared with multitude of other factors at play[2].

[1] https://www.wired.co.uk/article/subsea-internet-cable-ship-b...

[2] https://www.suboptic.org/wp-content/uploads/2014/10/ThA1.5.p...


The article addresses it towards the bottom

> Don’t worry though — we are nowhere near such a scenario. Yet.


What a vacuous statement.


Well, they conspired to keep developer wages low so why wouldn't they do this?


One benefit of all these Low Earth Orbit satellite megaconstellations is they can completely bypass terrestrial internet backbones. Starlink and Telesat LEO in particular. And (in principle) get lower latency to servers on the other side of the planet due to the faster speed of light in vacuum vs glass (and perhaps a more direct route).


It’s not just the faster speed in vacuum vs glass, but the route can be a lot more direct.

An undersea cable will go through (or around) all kinds of trenches or peaks because the sea bed isn’t flat. And it needs to have some stress relief imperfect routing to handle shifting.


An individual over at the /r/spacex subreddit did some simulations with what a LEO constellation would allow for latency reduction and improved routing (beyond your own continent)

https://youtu.be/AdKNCBrkZQ4


just remember the underlying unit economics of LEO vs fiber. A repeated system is generally thought to be capable of 40+Tbps / pair where as LEO might be good for gigabit at best.


I have no idea where you got that figure. GSO birds do can ~1Tbps already (EDIT: Viasat’s birds, for instance: https://corpblog.viasat.com/viasats-global-satellite-constel...). LEO is a factor of 50-100 closer. Inverse square law and all that means for the same aperture and power, you can get far better bandwidth.


GSO is very high orbit (22K miles) and therefor has much higher latency. The lower orbit (100-1K miles) constellations are lower bandwidth because of the high angular speed of travel removes the ability to do directional (high powered) transmissions.


Incorrect. The LEO constellations use phased arrays (or similar) and are able to slew at whatever angular rate you could want as they are electronically steered. Both for the terminals and for the satellite side. Iridium has used phases arrays in its LEO constellation for decades now, and the newer constellations like OneWeb and Starlink use phases arrays on the terminal side as well.


Are you talking based only on what is launched right now? Because most of the Leo satellite companies are working on point to point laser backbones which is definitely capable of 10gbps right now. And I don't know of any limitations of open space vs glass that would keep them from improving that to at least as much as we are currently able to get with glass.

It seems that most of the limitations of point to point laser right now are due to atmospheric conditions which is not a problem in leo.


40tbs is 100x400G.... Vs 10G. I agree that Leo will open up opportunities but it won’t supplant fiber economics.


it's the same underlying WDM tech - no reason why LEO laser comms constellations can't hit the same (infact can do more since FSO has less restrictions on wavelength bundling than fibre)


This makes the LEO networks sound more like the HFT microwave networks that are expensive and optimized for latency not throughput.


I am not sure exactly the distance to the new Leo constellations. Maybe 2k km? If that’s the case even with the speed of light advantage it’s still roughly 30ms round trip just to go up and down not including any electronic delays in the equipment. So unfortunately NYSE-LSE would still be faster on fiber.


Starlink is planning to deploy at 550km according to Wikipedia.


I recall some hacks to force a call via cable to get improved quality decades ago.


Shannon limit. Optical channels are many terahertz wide for coherent 100, 200, 400GbE Ethernet.


I don't think this is a cartel. Big users of data decided "we don't want to pay the price that the owner of the cable is offering, so we'll just build our own." Then they built their own.


The issue with an over-build first approach to competition is visible with airlines. If you see that a particular handful of routes are highly priced, you can set up your own airline. But the incumbent can just drive you out of business with their other markets and bankrupt you.

Then nobody risks trying to take you on again.

It's nice that big users of data may be bigger than the telecoms, but when that isn't the case, the market fails when building your own links on a larger network of oligopolists.


Wait, where does this happen? The airline industry seems to have a high degree of competition and very good pricing for consumers. Which makes sense given that it isn't an industry conducive to natural monopolies. The cost to open a route isn't that high compared to the cost to operate the route, and the cost of operation scales with revenue from the route; there isn't much in the way of fixed capital required for a route.


IMHO having more players in this market, which so far is dominated by state operated telcos and de-facto monopolists like AT&T is actually improving things. The more independently operating companies there are operating their own cables, the more room there is for free market to operate.

That being said, I do believe the notion of big corporations with pre-existing near monopolies on e.g. search or online retail with yearly revenues exceeding the gross national product of most nations on this planet, is not necessarily good for a free market. There have been some demands for some of these companies to be broken up and IMHO that would actually be a good thing. Calls for that are only going to get stronger.


> The more independently operating companies there are operating their own cables, the more room there is for free market to operate.

> That being said, I do believe the notion of big corporations with pre-existing near monopolies on e.g. search or online retail with yearly revenues exceeding the gross national product of most nations on this planet, is not necessarily good for a free market

To me, those two statements sound contradictory. Do you want a "free market" or don't you? If it's a free market, you have to expect that the organizations with the deepest pockets that stand to gain the most from larger internet pipes are going to be the ones to invest in it.

I'm certainly no expert, but it seems to me that the more ideal situation would be that core infrastructure like the internet is driven primarily by public money. The obvious argument against that is maybe it won't grow as phenomenally fast as it has, but maybe we don't really need to be able to stream those 4K cat videos when, like you said, in doing so we're empowering for-profit organizations to grow larger than the GDP of many nations.

> There have been some demands for some of these companies to be broken up and IMHO that would actually be a good thing.

At least we're in 100% agreement here!


They are not necessarily contradicting statements. Google and Amazon have near monopolies on another thing than fiber optic cables. Neither is trying to monopolize fiber optic cables. But of course them using their wealth and power as a near monopoly in their own fields to basically work around another near monopoly from telcos so they can create a cost advantage to re-enfore their own monopolies is kind of not really a free market any more. In the same way coercing city, state and country governments into giving them tax advantages also helps them compete unfairly.


Does it really matter if we have an excess of capacity when incumbents own the last mile and prevent open peering close to home and/or charge ridicious per mbit prices for transit or private peering. A little up the ladder for example you can already get HE in AUS https://pop.he.net/?country=Australia so think sub $1/mbit pricing but its all pointless* as 90% of the eyeball ISPs won't peer with them. *pointless is an exaggeration but doesn't help content providers or end users


Forming a cartel?

Aren’t they already a cartel, having divided the oceanic territories & protecting each other’s vested interests?


Obligatory reference to "Mother Earth Mother Board," one of the all-time best pieces of long-form tech writing, Neal Stephenson's gonzo journalism exploration of undersea cable laying.

"Our method was not exactly journalism nor tourism in the normal sense but what might be thought of as a new field of human endeavor called hacker tourism: travel to exotic locations in search of sights and sensations that only would be of interest to a geek."

https://www.wired.com/1996/12/ffglass/


Id also recommend Cryptonomicon by Stephenson. Undersea cables is a major subject in the novel. It also touches on many things that have become relevant today despite the book being written 1999 (cryptocurrency, encryption, etc). https://www.goodreads.com/book/show/38897904


The book Tubes also has some great looks at the chore of laying undersea cables. https://amzn.to/2FZao7j


It's a great read!


Thank you for this. From a deep part of my heart.


Doesn’t matter we can nationalize their assets when the time is right


I like this cable map https://dev.networkatlas.com/


As soon as the monopoly will be in place, a decentralized multiple-media network based on a distributed privately handled network infrastructure will be already available. I am working on this problem since 2010, see PJON: https://github.com/gioblu/PJON


And will that network include undersea cabling, satellites, or some equivalent means of global connection? I doubt it: these are all extraordinarily expensive. Even the cheapest approach imaginable - say, a series of network repeaters on rafts - is still quite expensive, not to mention incredibly brittle.

I'm all for distributed networks, local meshes, and other initiatives to reduce network hardware centralization. That said, these are not perfect substitutes for a global network. For instance: I'm based in Canada, and my work currently deals with digital service deployment in government. As part of that work, I occasionally need to refer to the UK's Government Digital Service (GDS) website. No amount of local network infrastructure can help me do that: I rely on the trans-Atlantic cables to access this.

Now, you could imagine mirroring the GDS website across a number of these local distributed networks, forming what is in essence a CDN under distributed ownership. That might help me right now, but: in a network monopoly world, how would you mirror content on an ongoing basis in the first place? Who would maintain such a mirror? How would you pay for the immense storage requirements? (Or, failing that, how would you decide which corner of the Internet to mirror?)


PJON Is done to leverage of whatever form of connectivity (wires, light pulses, radio waves, other protocols) even the internet. For now people implementing a PJON network generally hops through the internet when required.

Although, I have a great trust in the maker's and open-source community worldwide. As you can see a lot of people experimenting with electronics and building stuff have unveiled the truth behind the scams that we now call "consumer electronics products" and they are starting to build and buy open-hardware that runs open-software.

A privately built and maintained network infrastructure where communication is free and if required anonymous will be the next demand.

There is a large movement worldwide, many are doing so already, there is just a lack of standards and protocols designed around those requirements. PJON is an attempt to fill this gap.


Between 2016 and 2020 about 100 new cables have been laid or planned. The primary reason for new cables is the demand for bandwidth. But it is difficult to pinpoint the source of this demand.

Memes i say. Memes.


It’s amazing to me that nobody ever mentions ocean plastic pollution when undersea cables come up.


Why would they? the percentage undersea cable makes up has to be insanely small.


They would probably be buried under sediments before decomposing into micro-plastics.




Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: