The importance of modern fiber-optic cables to the global economy and the Internet cannot be overstated. In the case of the United States, about 36 submarine cables, each the diameter of a garden hose, carry more than 95 percent of the nation’s international voice, data, and video communications.
Every day the Society for Worldwide Interbank Fi- nancial Telecommunications transmits 15 million mes- sages over cables to more than 8,300 banking organiza- tions, securities institutions, and corporate customers in 195 countries. The Continuous Linked Settlement Bank located in the United Kingdom is just one of the critical market infrastructures that rely on those transmissions, providing global settlement of 17 currencies having an average daily equivalent of approximately $3.9 trillion. Similarly, the U.S. Clearing House Interbank Payment System processes in excess of $1 trillion a day to more than 22 countries for investment companies, securities and commodities exchange organizations, banks, and other financial institutions.
The popular belief that international communications are carried largely by satellite is false. The tremendous volume of data carried on less expensive, modern fiber- optic submarine cables dwarfs the limited capacity of the higher-cost satellites. Additionally, the technical transmission delays and other quality limitations inher- ent in satellites make them marginal for continuous transmission of high-speed voice, video, and data traf- fic. If the cables connecting the United States to the world were cut, it is estimated that every single satellite in the sky combined could carry only 7 percent of the current total traffic volume.
Referring to the submarine cable networks, the Federal Reserve’s staff director for management, Ste- phen Malphrus, observed that “when the communication networks go down, the financial sector does not grind to a halt, it snaps to a halt.” The same can be said for most sectors enmeshed in the global economy through the Internet, including shipping, airlines, and manufacturing.