Underwater cable contest

Early in February, the island of Matsu’s two cables linking it to Taiwan were cut: first by a fishing vessel, then by a cargo ship.

The island is the closest outpost of Taiwan to the Chinese mainland. Excused as “accidents,” the incidents coincided with increasing tensions as the rhetoric emanating from Beijing against Taipei and Washington escalated and underlined the vulnerability of global internet traffic to disruption.

This has been an increasing source of concern since January 2022, when the Svalbard Undersea Cable System which links mainland Norway and the Svalbard archipelago in the Arctic Ocean was cut: Suspicions fell on Russia, which had been complaining that a Svalbard-based satellite facility was tracking its submarines. The incident reminded observers of a 2014 action by Russia preceding its annexation of Crimea when it damaged cables connecting the area to the rest of Ukraine.

We ourselves are no strangers to the disruption cut undersea cables can cause, in war and peace. We have been connected to the world by undersea cables since the first one connecting us to Hong Kong was laid in 1880. After Commodore George Dewey sank the Spanish fleet at Manila Bay, in 1898, the Spanish governor general refused to allow the Americans use of the cable to Hong Kong; so Dewey cut it, sending a revenue cutter to carry dispatches to and from Hong Kong; later on, he cut the cable to Capiz, isolating Manila from the rest of the archipelago.

Back in 2006, the vulnerabilities of the undersea cable system were demonstrated when a massive earthquake off Taiwan affected over 120 call centers: They were totally cut off from their clients on the day of the earthquake, with capacity still down by 40 percent three days after the quake. Most recently in 2010, “terrorists also cut cable lines near Cagayan de Oro,” according to the Maritime Awareness Project.

Back in 2006, all our internet systems connect to the outside world from a single point, somewhere in the vicinity of Batangas. Since then, the number of cables has increased, not least because, as relations between America and China soured, funds were diverted to beef up the networks with friendlier countries, including the Philippines. Submarine Networks says that “today 11 in-service international submarine cable systems connecting the Philippines, and another six transpacific and intra-Asia subsea cables under construction,” adding that, “By 2024, there will be seven trans-pacific subsea cables connecting the Philippines to the US.” Last week, we looked at the rivalry between the United States and China—involving the American-led effort to deny China advanced microchip technology and capacity—is also manifesting itself in another rivalry forcing nations to take sides. Here is a revealing case. The Pacific Light Cable Network began as a Chinese majority-owned submarine cable system initially designed to connect Hong Kong, Taiwan, the Philippines, and the US. PLDC (Pacific Light Data Communication) also had two major American partners: Google and Meta (formerly Facebook). In 2020, Team Telecom of the US Department of Justice recommended disapproval of its undersea cable connection to the US. So Google and Facebook refiled their application to connect Taiwan and the Philippines to the US, abandoning the Hong Kong portion, and “without ownership and control by a Chinese entity.” By January 2022, this was approved and in February, the Dr. Peng Telecom Media Group, a Chinese stakeholder in PLDC, sold its stake at a loss, replaced by a Canadian investor.

There were other repercussions to the Team Telecom announcement. Between September 2020 and March 2021, three trans-pacific cables projects to Hong Kong withdrew their US landing applications, while two new cable projects: Bifrost (with Facebook, Keppel, Telin as partners) connecting the US west coast, to Guam, Singapore, Indonesia, the Philippines, and Echo (Facebook, Google as partners) connecting the US west coast, Guam, Singapore, Indonesia, were announced.

For its part, China has been withholding cooperation on undersea cables. Last February, it left South East Asia-Middle East-Western Europe 6 (or Sea-Me-We 6) consortium; instead, China Telecommunications Corp. (China Telecom), China Mobile Limited, and China United Network Communications Group Co. Ltd. (China Unicom) announced a Europe-Middle East-Asia undersea cable project to link Hong Kong to Hainan, “before snaking its way to Singapore, Pakistan, Saudi Arabia, Egypt, and France,” Reuters reported last month. HMN Technologies, (majority owned by Huawei Technologies) would make and lay down, the cable, with industry analysts saying this might prevent “some parts of the world” from purchasing capacity in the cable because of this. Reuters had already declared last March that the US and China were waging war beneath the waves.

The year before, China Telecom and China Mobile, which had a combined stake of 20 percent, withdrew from a project linking Asia with Europe when a US company was contracted to build it. The US for its part has rejected “several” cable projects that either involved Chinese companies or directly connected mainland China or Hong Kong to the US on national security grounds. (Chinese law requires their businesses and organizations to share data with the government when national security is invoked.)

China includes undersea cables in the Digital Silk Road portion of its Road and Belt Initiative. This strategic vision is what makes otherwise odd schemes, such as Chinese interest in building a “smart city” (and other proposals like an industrial park and an airport expansion) on remote Fuga Island, which is administratively part of Aparri, make sense. A Guardian article recently reported that our military, alarmed, decided to establish a naval base there instead; now there is talk of its possible use as an Enhanced Defense Cooperation Agreement site. Fuga is in the Bashi Channel which separates us from Taiwan, and which, in fact, remains disputed between Taiwan and the Philippines since the 1930s, and where China has been sending its air force to do exercises over the channel.

Five days ago, Biz Buzz pointed to Boracay where Dennis Uy had packaged a 2018 deal in which KT Corp. of Korea put up public Wi-Fi in parts of the island, throwing in 40 CCTV cameras for the use of the local government. The system was meant to use the (then nonexistent) infrastructure of Uy’s Converge ICT, which is finally in place. I’ve followed Uy’s zigzagging efforts and China Telecom’s frustrated efforts to come in as the third player in our telecoms, for years in this space, but note that Uy of Converge is different from Uy of Dito.

Converge is a partner (with China Mobile International Limited, China Unicom Global, PPTEL SEA H2X Sdn. Bhd., HMN Technologies Co. Ltd.) in a submarine cable project to link the Philippines, Hong Kong, China, Thailand, East Malaysia, and Singapore by 2024 called South East Asia Hainan-Hong Kong Express Cable System (SEA-H2X). This contrasts with it merely buying access to Keppel Telecommunications and Transportation’s Bifrost Cable System connecting Singapore, Indonesia, and the Philippines, to the US West Coast. Last February, construction of the landing station for this cable was begun in Davao City.

The same Biz Buzz article mentioned that Dennis Uy is getting into the data center game, with a “big” one to rise in Parañaque with a “multinational player” holding a 40 percent stake. But this is another fast-growing, strategic arena of competition between China and the US.

His telecoms firm, Dito, in turn, is part of a consortium with Globe Telecoms, to build the Asia Link Cable connecting Hong Kong and Singapore as its trunk and branches to the Philippines, Brunei Darussalam, and Hainan in mainland China by 2025. But as we’ve seen, the dividing line moving forward, cable-wise, is Chinese participation.

Email: [email protected]; Twitter: @mlq3