Undersea 'Super Internet' Wins $1.4 Billion in Funding Promises

[John Walker]

Recent Advances in Manufacturing--Nottingham Trent University and EEVL 

http://www.networx.on.ca/~jwalker/business.htm

The Library and Information Services (LIS) Department at the
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Undersea 'Super Internet' Wins $1.4 Billion in Funding Promises

                      By Brian Caulfield

http://www.webweek.com/current/infrastructure/19980112-undersea.html

Project Oxygen received pledges for a chunk of financing last month,
with tentative agreements for $1.4 billion coming from 35
telecommunications carriers. The undersea "super Internet" project
aims to link 175 countries to a voice and data network that can
support speeds between 320 Gbps and 1 terabit per second.

John Kessler, president of research firm KMI Corp., said the
undertaking, which aims to have its first phase operational by 2000,
is "the most ambitious project in communications of the 20th century."

But whether the project can live up to its hype is still up in the
air, analysts said. CTR Group--the Woodcliff Lake, N.J., startup
putting the project together--said the financing represents only about
10 percent of the project's estimated price tag.

The project is much larger than others now in development, such as
the China-U.S. Cable Network, which plans to begin operation in 1999.
The China-U.S. Cable Network announced last month it will begin
construction of a high-speed undersea cable once permits have been
granted. The $1.1 billion link will carry traffic at speeds of 80 Gbps
over 16,000 miles of cable.

Unlike Project Oxygen, however, the China-U.S. Cable Network has
already locked in financing. The group of high-profile companies
slated to manage the network includes AT&T Corp., China Telecom, Korea
Telecom, MCI Communications Corp., Sprint Communications., Teleglobe
USA, Telekom Malaysia, and Telstra Corp.

The CTR Group, on the other hand, is not disclosing the names of the
companies that have agreed to fund the construction of Project Oxygen.
The decision is significant, in light of the fact that although CTR
will manage Project Oxygen, the true owners will be those paying for
its construction. CTR Group's owners include TycoSystems, Alcatel
Submarine Networks, NEC Corp., NTT International Corp., Sumitomo
Corp., and Mitsui & Co.

And though fund-raising for the project has barely begun, CTR
representatives said raising $14 billion is the easy part.

"Over the last two years, carriers have put $18 billion into the
global undersea market," said Neil Tagare, CTR chairman and CEO. "The
real issue is how do we break through to all the countries and
different ministries. This is all about politics."

Tagare successfully oversaw a similar endeavor, the FLAG (Fiberoptic
Link Around the Globe) undersea cable project, which began operations
in 1997. Currently the longest submarine cable in the world, FLAG
connects Europe, the Middle East, Southeast Asia, and Japan via a
single fiber-optic cable.

"The fact Neil Tagare was able to get FLAG up and running is a good
sign he's capable of delivering at least a part of this ambitious
scheme," said Graham Finnie, research director at the Yankee Group
Europe, referring to Project Oxygen.

But even if the project is completed, Finnie questioned the ability
of the project to seriously change the global telecommunications
picture, because the carriers that currently control most undersea
cable will also probably be the ones that own a big piece of Project
Oxygen.

Tagare said he wants to sell bandwidth capacity on the network,
rather than the old model of selling fixed circuits between two
points. Such a method would make it easier for companies to adjust the
amount of bandwidth between two points, said CTR representatives,
adding that it would also make it harder for companies to hoard unused
bandwidth and shut out smaller carriers.

But the Yankee Group's Finnie said that the parties investing in
Project Oxygen--most likely large telecommunications carriers--will
still have a say in how the bandwidth is parceled out.

"I think it's interesting," Finnie said of CTR's proposed
bandwidth-based pricing model. "But the telcos still have the power
to decide how to buy bandwidth," he added, since the telcos will
likely own a controlling stake in Project Oxygen. "It may be that
telcos will no longer see [controlling undersea cable capacity] as
part of their core activities, but they may also think it is
important that they control the cable network."

----------------

Also in this issue:

- Undersea 'Super Internet' Wins $1.4 Billion in Funding Promises
    Project Oxygen received pledges for a chunk of financing last month,
    with tentative agreements for $1.4 billion coming from 35
    telecommunications carriers. The undersea "super Internet" project
    aims to link 175 countries to a voice and data network that can
    support speeds between 320 Gbps and 1 terabit per second.
- California pushes virtual classes
    California Gov. Pete Wilson is making a push to wire the state's
    college systems and create more virtual classrooms to accommodate the
    state's growing student population.
- People want their e-mail -- but not their PC
    [January 8] International Data Corp. (IDC) is predicting that the
    market for information appliances that give access to the Internet
    (or Internet-like services) will explode over the next several years.
- Easing email in-box overload
    A communications software company says it will introduce a new
    product for (http://www.microsoft.com/)Microsoft's Exchange messaging
    server that will help email users manage the volume of messages that
    flood their in-boxes each month.
- States Turn Schools Into Mini-ISPs
    Looking for a low-cost, cutting-edge alternative to your Internet
    Service Provider? In some states, it might be worth your while to
    call your local school board.
- AOL accused of privacy violation
    America Online (AOL) may have violated its own policy and perhaps
    the law when it allegedly revealed the identity of a member to a
    Navy investigator.
- New Lists and Journals
    * mossao - Missouri Senior Student Affairs Officers
    * Wine Journal - 0utstanding Free Weekly Wine Ezine
    * WOMEN40s: Following on the heels of successful lists such as
      Women20s, Women30s, and fiftysomething-Women - SJU brings you
      another new women's list - WOMEN40s!


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