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  • Writer's pictureJames Dean

The Global Strategic Tug-of-War Over Data on Undersea Fiber Optic Cables: United States vs. China

We use the Internet everyday 24/7 now, but do you really know how your information is travelling around the world? In the contemporary age of digital communication, undersea telegraph cables have become the arteries of global data transmission. These cables are crucial for the seamless exchange of information across continents, supporting everything from financial transactions to social media interactions. While as of late, the United States and China are intensifying their efforts to dominate this underwater network, highlighting a new front in their strategic rivalry. In fact, research finds that 99% of all international communications and data such as internet traffic, financial transactions, voice and text are routed through submarine cables, while just 1% are routed through satellite networks.


The United States and Its Undersea Cable Network


Since its inception in 1858, the United States has long been a pivotal player in the deployment and maintenance of undersea telegraph cables. Historically, American firms like AT&T and, more recently, companies such as SubCom, have laid extensive cable networks across the Atlantic and Pacific Oceans. These cables form the backbone of international communication, carrying about 99% of transoceanic data traffic.


Historical Background of Global Undersea Cables


The first transatlantic telegraph cable was laid in 1858, and the first public message was sent from Queen Victoria to President James Buchanan on August 16, 1858. The cable was the result of years of effort and the first step to a practical, permanent communications link between Britain and the US. The cable was laid by the US and Britain, with the ships HMS Agamemnon and USS Niagara setting sail from Valentia, Ireland in August 1857. The cable broke on the first day of the expedition, but the boats met in the center of the Atlantic on July 29, 1858, and attached the cables together. The first public message was 99 words long and took 16 and 1/2 hours to transmit.


The cable stopped working weeks later, and it took another eight years for the countries to lay a working cable that provided reliable communication across the Atlantic Ocean.


The first fiber-optic cable to cross an ocean, TAT-8, entered service on December 14, 1988. AT&T, British Telecom, and France Telecom led the consortium that built TAT-8, which spanned a seabed distance of 5,846 km between North America and Europe.


Watch Video Learn Details of Global Undersea Cable Network


What's the Impact of Global Undersea Cables


Strategic Importance: For the United States, control over these cables is not just about maintaining economic and communication advantages; it’s a matter of national security. The ability to monitor and protect these cables by agencies like NSA ensures that the U.S. can safeguard its data including banking from espionage and sabotage. Additionally, American dominance in this field helps to uphold its influence over global communications infrastructure and support the U.S. dollar as the global currency standard.


Technological Advances: U.S. companies have been at the forefront of technological advancements in this domain. Innovations like fiber-optic cables, which offer higher data transmission rates and greater resilience, have been pioneered by American firms. These technologies not only enhance the efficiency and reliability of data transmission but also bolster the U.S. position in the global market.


China's Ambitious Plans for a New Global Network


Today, China, recognizing the strategic importance of undersea cables, has embarked on an ambitious project to construct its own global network. This initiative is part of a broader strategy to assert its influence over international communications and reduce its dependence on Western-controlled infrastructure. China is a key member of the BRICS alliance, a group of leading nations working to replace USD as the global currency.


The Digital Silk Road: Central to China's undersea cable strategy is the "Digital Silk Road," a subset of the Belt and Road Initiative. This project aims to enhance digital connectivity between Asia, Africa, and Europe through a network of undersea cables. By funding and constructing these cables, China seeks to create an alternative route for data transmission that bypasses traditional Western-controlled pathways.


Economic and Political Leverage: China's involvement in undersea cable projects is also driven by economic and geopolitical motives. By investing in and controlling these cables, China gains significant leverage over the data traffic of participating countries. This control can translate into economic benefits and increased political influence, allowing China to shape global data policies and standards to its advantage.


Technological Investments: Chinese companies like Huawei Marine and China Telecom have been making significant strides in the undersea cable market. These firms are involved in numerous projects, including the construction of the Peace Cable, which will link Asia, Africa, and Europe. Such investments not only enhance China’s technical capabilities but also challenge the traditional dominance of Western firms in this sector.

Implications for Global Communications


The ongoing competition between the United States and China over undersea cables has far-reaching implications for global communications and the competitive economic outlook long-term.


Security Concerns: The expansion of Chinese undersea cables raises significant security concerns for the United States and its allies. There is a risk that data transmitted through Chinese-controlled cables could be subject to surveillance or manipulation. This concern is compounded by the opaque nature of China’s cybersecurity laws and the potential for state interference.


Fragmentation of the Internet: The emergence of separate U.S. and Chinese undersea cable networks could lead to a bifurcation of the global internet. Such a split would undermine the universality of the internet, creating distinct and potentially incompatible systems. This fragmentation could complicate international data exchange and impact global businesses and communication.


Economic Impact: For developing countries, choosing between U.S. and Chinese undersea cable networks could have profound economic implications. Aligning with one network over the other might affect access to technology, investment, and markets, influencing their economic growth and integration into the global economy.


Leading Fiber Optic Cable Companies


Today, it is important to note that just 45% of all homes in the United States have access to broadband fiber optic line. Investing in fiber optic cable companies can be a promising venture given the increasing demand for high-speed internet and the ongoing rollout of 5G technology. Here are some leading companies in the fiber optic sector that you might consider for your investment portfolio:


  • Corning Incorporated (NYSE: GLW): Corning is one of the largest manufacturers of fiber optic cables and other telecommunications equipment. The company is known for its innovation and quality, making it a dominant player in the market. Corning’s revenue was $14.08 billion in 2021, and it continues to grow with its involvement in both the telecom and glass manufacturing sectors​​.


  • Lumentum Holdings Inc. (NASDAQ: LITE): Lumentum is a leading provider of optical and photonic products, catering to markets such as telecom, datacom, and commercial lasers. The company has shown significant growth, benefiting from the expansion of 5G networks and increasing demand for data connectivity solutions. Analysts have been optimistic about Lumentum's potential, with price targets reflecting its growth trajectory​​.


  • Ciena Corporation (NYSE: CIEN): Ciena is a major supplier of telecommunications networking equipment and software. It has a strong presence in the optical connectivity market and is well-positioned to benefit from the growing demand for 5G and increased global bandwidth needs. Ciena's innovative solutions aim to reduce network complexity and enhance adaptability, which are crucial for the transition to 5G​.


  • CommScope Holding Company, Inc. (NASDAQ: COMM): CommScope specializes in designing and manufacturing network infrastructure products, including fiber optic cables. The company is heavily involved in supporting the convergence of wireline and wireless networks, which is vital for the success of 5G. CommScope's efforts to improve delivery speed and increase fiber connectivity flexibility have made it a notable player in the industry​​.


  • Clearfield, Inc. (NASDAQ: CLFD): Clearfield focuses on fiber optic management and connectivity products, catering primarily to communication networks. The company has experienced substantial revenue growth due to high demand in community broadband and other areas. Clearfield's strategic acquisitions and expansion efforts have positioned it well for future growth​.


These companies are well-positioned to benefit from the ongoing technological advancements and increasing reliance on the broadband fiber optic infrastructure. When considering investments, it's important to evaluate each company's financial health, growth potential, and market position. You might also consult a broker prior to making a decision.


Conclusion


The strategic competition over undersea telegraph cables between the United States and China is emblematic of the broader geopolitical struggle for technological supremacy. As both nations vie for control over these critical infrastructures, the implications for global security, economic stability, and the future of the internet are profound. Navigating this complex landscape over the next 25 years will require careful consideration and cooperation among global stakeholders to ensure that the benefits of undersea telegraph cables are equitably shared and that the global communication network remains secure and resilient.


About Author


James E Dean, author / eBusiness expert is located in Northeast Ohio with over 35 years of experience in Business Development. He is a graduate of Boston University. J Dean leads a team helping entrepreneurs, corporations and non-profits to succeed in a changing world. Questions contact 440-596-3380 or Email jdean@entangledvibrations.com

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