European explorers perished by the boatload in search of the Northwest Passage. If Doug Cunningham has his way, by late 2015, we’ll be sending cat videos through it in under two tenths of a second.
Madagascar has one. So does Djibouti. Ditto French Polynesia, a million miles from anywhere in the South Pacific, and frozen Svalbard, population, 2,600.
Forget roads, railways and airports: the modern global economy is lashed together with undersea fibre optic cables. There are 188 cables in operation or the planning stages worldwide – from a 25-kilometre link between Sweden and Denmark to a 19,000-kilometre line running between France to Singapore via the Suez Canal.
Global demand for communications bandwidth is growing fast, at an annual compound rate of 53 per cent from 2007 to 2012, according to TeleGeography, a telecommunications think tank. Two factors are primarily driving demand: the developing world, where many places simply skipped land lines and immediately opted for cellular service, and the continual migration of nearly every facet of modern life onto the web, where everything is Tweeted, Instagrammed, Facebooked and Tumblred. High frequency trading – in which computers buy and sell thousands of stocks in the blink of an eye – has become a lucrative market of its own, and how quickly packets of information can move between two points can make or break a bandwidth provider. “Some of [these traders] see a lot of money to be gained in beating their rivals between two markets. Having the fastest cable is essential to that,” says Tim Stronge, ananalyst with TeleGeography. “But in general what’s driving demand is just people like you and me using their internet capacity for looking at cat videos on YouTube or whatever.”
Trouble is, in the Canadian Arctic, those cat videos can take forever to stream. Many internet users here can’t help but watch the proliferation social media networks, multimedia-rich web content and smart phones the way a passenger on a sinking ship regards the water that’s up to his neck. Large swaths of the internet are already effectively off-limits to Nunavut and more remote communities in the NWT. Even in the North’s major centres, our internet connections are slower and vastly more expensive than what’s available down south. “There is a growing gap between the level of service available in the North versus the south, causing serious challenges to both residents and visitors, even in the capital cities of Yellowknife and Whitehorse,” wrote the authors of 2011’s landmark Arctic Communications Infrastructure Assessment report. “Communities outside of Yellowknife and Whitehorse have even poorer service, threatening the viability of many communities as it becomes increasingly difficult to engage in opportunities that rely on 21st century connectivity.”
In Nunavut especially, communications problems are legendary. Take what happened on October 6, 2011, when Telesat’s Anik F2 satellite, which provides most of Nunavut’s communications services, started facing the wrong direction. The entire territory was virtually shut down. Phone calls, internet traffic, financial transactions, even air traffic – all of it ground to a halt. Premier Eva Aariak took to CBC Radio to remind local health centres and wildlife offices to turn on their Iridium satellite phones. “The effects of [the outage] can only be described as stupefying,” said Robert Long, Nunavut’s deputy minister of economic development and transportation, a year later. “In light of the physical isolation of Nunavut’s communities, we should question the wisdom of relying on a single mode of communications – satellite – and for the most part a single satellite. It is ironic that the internet technology that made broadband internet accessible in all Nunavut communities 10 years ago was able to take it all away in a split second – if only for a day.”
Doug Cunningham wants to change all that. The president of Arctic Fibre Inc. envisions a $620-million, fibre optic cable with a total bandwidth of 32 terabits (32 billion bits)—enough capacity to carry six billion phone calls at once, strung from existing stations Highgate, England, near London to Maruyama, Japan, near Tokyo. While fibre optic connections between these two world financial centres are nothing new, Cunningham’s ballsy innovation is to route the whole thing through the Arctic archipelago. European explorers perished by the boatload in an effort to find the Northwest Passage to Asia. If Cunningham has his way, by late 2015, we’ll be sending cat videos through it in under two tenths of a second.
In a lot of ways, Doug Cunningham is about as un-Arctic as you can get. He’s Bay Street to the core, extracted from the same Scottish-Protestant stock that for much of Canada’s early history vritually dominated our business and political elites. He’s a member of the Toronto Golf Club, where Bentleys grace the parking lot (Cunningham drives a Buick). He lives with Kit Klieser, his second wife, whom he’s known since childhood, in Toronto’s upscale Forest Hill neighbourhood, on a leafy street that was once the edge of town and the end of the line for streetcars. Today, of course, it’s buried deep in the heart of the Toronto megalopolis.
Arctic Fibre’s headquarters is on the top floor of Cunningham’s house. There’s a spartan but well-furnished meeting room with a cupboard full of marine charts and handfus fibre optic cable. Across the hall, Cunningham works from a small but similarly well-appointed office: lamp, family photos and a mahogany bookshelf stocking a biography of Alexander Graham Bell and volumes one and two of “Principles of Public Utility Regulation.”
This is Cunningham’s nerve centre, from which he keeps in touch with Arctic Fibre’s other employees, including his son Mike, the chief operating officer, and Sarah Nelson, the marketing and administration manager. They both live elsewhere in the GTA, communicating mainly by phone. Arctic Fibre’s engineering group is based in Washington. “We try to work on a virtual basis as much as possible,” Cunningham says.
Cunningham started working at a young age, after the early death of his father. To bring in some money, he started delivering the local paper. By high school, in 1964, he was writing for it. “I worked as a trainer for the high school football team. The coach said we needed more publicity. I said ‘I can arrange that,’ so I started as a high school sports reporter.”
He spent the late sixties and early seventies doing radio news in Hamilton and internships at the Hamilton Spectator and Financial Post; all the while, he was studying business at the University of Western Ontario. It was at the Post, during the era of linotype machines, typewriters and rotary-dial phones, that he gained an appreciation for swifter communication technologies. In those days, deskers got stock market quotes by phoning up the stock exchange, and features had to be filed three days before going to press. “You’re writing about stocks and why they’re moving on a Friday and it wouldn’t get to the reader until next Thursday.”
Eventually, Cunningham had to choose between journalism and his business background. After further dabbling in radio, he returned to school complete an MBA. There was a stint with the CRTC in Ottawa, Global TV, the brokerage firm Burns Fry (now part of BMO). He made his name as a stock analyst, with a specialty in telecom, before exiting Bay Street in 1998.
Cunningham then founded Network Research Inc., which provided telecom investment advice to pension funds and the like, before getting undersea cable game with Antillies Crossing, a joint venture with telcos in several small Caribbean countries that connected Trinidad and Barbados to a main cable in the U.S. Virgin Islands. But at about 1,000 kilometres, Antilles Crossing was but a light stretch compared to the marathon that is Cunningham’s current passion project.
Technically speaking, Arctic Fibre is your run-of-the-mill cable. Even its length, at around 15,000 kilomtres (the precise length depends on possible spur lines to Ireland and mainland China), isn’t superlative. The only truly unique feature is its route: after crossing the Atlantic just south of Greenland, it enters the Hudson Strait, with a spur landing in Iqaluit. A second trunk will veer south and connect to existing cables at Chisasibi, offering a connection to the North American fibre network. It then weaves its way through the chicane of the Foxe Basin, Fury and Hecla Strait and the Gulf of Boothia, before a 30-kilometre overland vault across the narrow Boothia Peninsula, which shaves about 1,700 kilometres off the total distance and $68 million off construction costs.
Then it’s south and west through a series of gulfs and straits below King William and Victoria islands before leaving Canadian waters again through the Beaufort Sea. The cable will also make landfall at five remote communities on the Alaska coast. Because signals through fibre cables run out of steam after 11,000 kilometres or so, Cambridge Bay – more or less the cable’s halfway point – will be home to a repeater station. Cape Dorset, Hall Beach, Igloolik, Taloyoak and Gjoa Haven will also have landing stations.
Before the line is installed, Arctic Fibre needs approval from Industry Canada, and, because it crosses land, the Nunavut Impact Review Board, as well as local approval for landing stations. Meanwhile, survey work to plot the exact placement of the cable will begin this summer. Arctic Fibre already has an agreement with TE Subcom, the New Jersey-based industry veteran that boasts it’s laid nearly half a million kilometres of undersea cables.
The heavy and unpredictable ice patterns of the Arctic pose an engineering challenge, Cunningham admits. But he says the cable, which for most of its route will lay directly on the seabed (standard practice), will go underground far from shore when it approaches landing stations to avoid scouring sea ice. Skeptics have wondered what will happen in the event of a cable break. They can be fixed in the open water season, he says, but Nunavut will continue to depend on satellite internet for backup. It’s a real concern, Cunningham acknowledges, but he says cable cuts are usually caused by ship anchors in areas of heavy marine traffic, like the Meditarranean.
The cable consists of four pairs of fibre optic cables, two dedicated to “express” traffic between the U.K. and Japan, and two dedicated to North American traffic. A ping between each end of the cable will take 159 milliseconds, 29 fewer than the current fastest route. While the cable will only directly service a handful of Nunavut communities directly, all but distant Resolute and Grise Fiord will be connected by a $237-million secondary network of microwave relay stations, much like Northwestel connects outlying NWT communities to its fibre network.
Cunningham says local Arctic traffic and longer-distance international business rely on one another to make the economics of the project work. North of 60, he’s looking to sell to ISPs like Northwestel and SSI Micro, although he suspects the presence of a fibre line will lure new competitors to the Northern marketplace. Talks with Northwestel haven’t netted a deal yet, but the two sides are talking. “It’s an interesting project proposal and discussions are ongoing,” Northwestel spokesman Eric Clement said in an email. SSI Micro also confirmed it’s had discussions with Arctic Fibre.
Arctic Fibre is also in negotiations with federal departments and that the Department of National Defence (DND) supports the project. For its part, DND would only say it would use the service via the Global Defence Network Service, a contract with Telus. “DND buys services from our service provider, and does not get involved in how they provide the service,” a department spokesman said in an email. “There are no specific plans in place to make use of such a capability.”
The Government of Nunavut has overcome initial skepticism and now supports the project, says Madeleine Redfern, the former Iqaluit mayor who now works as a consultant for Arctic Fibre. But it remains to be seen whether the Government of Nunavut it will buy in. The GN has its own institutional bandwidth needs, from transferring large documents and health records to connecting distant witnesses and lawyers to court proceeding in Iqaluit via video conferencing. The limits of the current system are downright embarrassing. When the GN finally switched to modern, high-security drivers licences from the old laminated paper ones, the files for each licence were too big to transfer via internet, forcing government workers to put them on thumb drives and send them to Iqaluit by air freight. “It’s absolutely ridiculous,” Redfern says. “It slows down productivity. A government employee who inadvertently sends a file during work hours can literally clog the system.”
Quintillion Networks, a consortium of Alaskan telecom companies, is signed on to build the American segment of the cable and provide internet services to the state’s remote North Slope region. And Cunningham says Arctic Fibre is close to deals with Chinese telcos, whose subscriber bases run into the hundreds of millions, and with a “major content service provider,” although Cunningham won’t say who it is until the deal is done.
Doug’s son Mike is the man in charge of marketing Arctic Fibre. “Most of the traffic we’re looking for is going from data centre to data centre, not user to user,” Mike says. Big Data companies like Facebook and Google are attractive clients because they have mushrooming bandwidth needs. “They can’t keep up with their own growth,” Mike says. “They’re eclipsing telecoms in terms of their scale.”
And how will Arctic Fibre cover the $620 million cost of construction? Interest on the part of investors is tough to gauge right now, says Stronge, the Telegeography analyst. There’s a concern among investors that the current wave of demand could create a bandwidth glut, and then, inevitably, a price drop. “There’s an appetite but they’re not too hungry. Bankers right now are very conservative unless you find the right one.”
Cunningham says four financial institutions are in for $220 million and is confident the rest of the financing will come together. “When we decide which anchor tenant” – one of those Big Data behemoths – “to go with, we’re done.”
The regulatory hoops, technical challenges and money matters are familiar adversaries for Cunningham. He knows how the game is played, how to navigate the rocky channels of such a mammoth endeavour. He understands how to make deals, appease bureaucrats and talk up would-be allies. He’s racked up 80,000 frequent flyer points this year, and it’s rare he spends more than a week in a row without travelling to meet potential investors or give a presentation about Arctic Fibre at conferences. He is a man confident in his ability to will something out of nothing.
What stumps him is that great Northern skepticism, born from years of hearing southerners with grand visions arrive and declare a gleaming new future to be at hand, only to bail out when problems arise or the money runs out. During a meeting with Sarah and Mike in his office, Doug gets frustrated by some critical reader comments appearing under a local news story about Arctic Fibre. Mike is trying to placate him. “The main thing is to keep posting information,” the junior Cunningham says. “You can’t worry about who the trolls are.”
Doug’s still annoyed, but relents. It’s time to get back to business. “I guess I just get mad when people don’t get with the program.”