Testimony of Lowell C. McAdam: On the Law of the Sea Conventions: Benefits for Submarine Cable Systems
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Once the U.S. is a party to the Convention, Verizon and other U.S. telecommunications companies can work with the appropriate U.S. agencies to enforce, when necessary, the freedoms to lay and repair cables on the continental shelf and the EEZ – saving millions of dollars over the life of a cable system, improving the reliability of our critical infrastructure, and putting U.S. companies on a level playing field for operating international cable systems.
If the Congress fails to act to ratify the Convention, U.S. companies will continue to operate at a disadvantage vis-a-vis our global counterparts, indeed having to work through our international providers and their respective governments to seek protection of their submarine cable infrastructure under the Convention.
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Third, the Convention will also help the United States government and international companies respond when countries attempt to unlawfully require licenses or permits before submarine cables can be laid or repaired. As an example, Verizon is one of the co-owners of the Europe India Gateway submarine cable system, which passes over the continental shelf claimed by Malta but never enters Malta’s territorial seas. Even though the Convention allows for such transit without interference by coastal nations, Malta’s Resources Authority has threatened legal action if the submarine cable operators do not obtain a license and pay a fee. Not only do these fees add unforeseeable costs on existing undersea cable systems, they raise the specter of coastal nations imposing similar requirements for the sole purpose of raising revenue at the expense of the cable owners. By signing on to the Convention, the U.S. will have the discretion to add its diplomatic efforts in the ongoing dispute with Malta and enforce the treaty’s expressly stated freedom to lay and maintain submarine cables in international waters without tolls, taxation or fees levied by coastal States.
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Fiber-optic submarine cables are the lifeblood of U.S. carriers’ global business. Aside from our land-based connections with Canada and Mexico, more than 95 percent of U.S. international traffic – voice, video, Internet and data – travels over 38 submarine cables, each the diameter of a garden hose. Without these cables, current satellite capacity could carry only 7 percent of the total U.S. international traffic.
Fiber-optic submarine cables are the international digital trade routes of the 21st century. And thus, any disruptions to the submarine cable global network can have significant impact on the flow of digital information around the world, with severe consequences for the world economy. As one official from the Federal Reserve noted in referring to submarine cable networks, “When the communication networks go down, the financial sector does not grind to a halt, it snaps to a halt.”i
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Second, ratification of the Convention will also help U.S. companies better contend with disruptions to undersea cable service. For example, in March 2007, large sections of two active international cable systems in Southeast Asia were heavily damaged by commercial vessels from Vietnam and taken out of service for about three months. More than 106 miles of cable were removed from the seabed and repaired, at a cost of more than $7 million. It would have been very helpful if the United States, Verizon and other affected U.S. companies had been able to use the Convention to compensate cable owners, arbitrate disputes over service disruptions, and deter future violations.
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Given their importance to global networks and the world economy, there must be an appropriate legal framework based upon global cooperation and the rule of law to protect submarine cables. The Convention provides this necessary framework in 10 provisions applicable to submarine cables, going beyond existing international law to provide a comprehensive international legal regime for submarine cables wherever they are – whether in territorial seas, in Exclusive Economic Zones (or “EEZ”), on continental shelves, or on the high seas. Once the Convention is ratified, the United States government will be able to insist on compliance by other nations with these protections. Several recent events underscore the urgent need for a clear and unambiguous framework for protecting this vital communications infrastructure.
First, some nations have attempted to encroach on the ability of U.S. operators to participate effectively in the deployment, maintenance and repair of undersea cables. To oppose these types of foreign encroachments or restrictions effectively, the U.S. must have a seat at the table where it can enforce the Convention’s freedoms to lay, maintain, and repair undersea cables.