EoW July 2009

Transat lant ic Cable

service, plus 28 systems due to enter service by 2011. Of these, up to 16 new cables will be activated this year, which would make 2009 the busiest year in the last decade for undersea cable launches. According to new data from the research rm’s Global Bandwidth Research Service, international bandwidth usage grew 64% in 2008, and the new subsea activity is an indicator of a resurgent telecom networks business. It was pointed out that the cables now at the planning stage outnumber those laid in 2001, at the peak of the submarine cable investment bubble. TeleGeography, which specialises in analysis of the long-haul network and submarine cable industry, also noted a cost-consciousness that was absent at the start of the decade. Total spending on submarine cable construction is projected at $2.6 billion this year, with $3 billion more to come in 2010. While this marks a sharp increase from recent years (cable investment over the period 2004-2007 totalled less than $2 billion), it is well below the $13.5 billion invested in new systems during the 2001 building frenzy. “While the number of cables being laid is impressive, this current batch of new cables won’t break the bank,” said TeleGeography analyst Alan Mauldin. “Most of these new cables cover shorter distances and employ simpler designs than their predecessors, helping to keep costs in check.” California, outsize and outré, does not spring to mind as a moderating in uence. But the state – both under- and overpopulated at various points along its 840-mile length, and with a vast network of freeways – is heavily dependent on the motor car and uncommonly vulnerable to the vicissitudes of nature. Thus it was that California became a champion of earth-friendly motoring habits; and has now become, in the view of the Los Angeles Times , “the model for compromise with US car makers and the federal government to curb greenhouse gases.” Reporting from Washington, Times writers Jim Tankersley and Richard Simon declared that President Barack Obama’s announcement of tough new rules on fuel economy and rigorous curbs on vehicle greenhouse gas emissions marks “a potentially pivotal shift in the battle over global warming – and a vindication of California’s long battle to toughen standards.” (“Auto Emissions Deal a Win for California,” 19 th May). A single nationwide standard will impose, by 2016, a 30% reduction in carbon dioxide and other emissions from new cars and trucks sold in the US Full compliance is projected to reduce annual oil consumption nationwide (currently at 7.1 billion barrels) by about 5%. California will essentially adopt the national standard in place of its own tough emissions requirements, but will lose nothing thereby except its earlier deadline for compliance. The Obama standard, designed to achieve the same level of emissions cutbacks as the California rule, gives auto makers more time to adapt. The auto makers will pledge to drop their e ort to block the California rules through legal challenges. In 2002, California passed a law to reduce vehicle emissions, but auto industry lawsuits held up its enforcement. “Everybody wins,” David Doniger, policy director of the Natural Resources Automotive Washington, major US car makers, and the state of California come together on auto emissions

The economy

Some reasons for optimism that the US could begin to pull out of recession before the year is out

“The nancial system, frozen solid for the past nine months, is in a spring thaw,” Washington Post sta writers Neil Irwin and David Cho wrote on 21 st May. They added, “And it’s happening even though many of the Obama administration’s major rescue programs have yet to get o the ground.” The title of the article – “Wider Con dence Lifts Economy from Winter’s Deep, Dark Freeze” – takes note of the long wait for a word of cheer on the US economy. But now, according to the Post , some encouraging news has arrived. To wit: ❈ [Since early May], major banks have raised or said they would raise $56 billion in private capital – the type of surge that Federal Reserve Chairman Ben S Bernanke said in March would signal that the nancial system is recovering ❈ The premium that banks charge to lend to one another – another indicator of the system’s health – is at its lowest [ie best] level since the nancial crisis began in 2007 ❈ The Standard & Poor’s 500-stock index was up 34% since 9 th March, and a measure of stock market volatility [in the week of 18 th May] hit its lowest level since the nancial crisis deepened in September, “indicating that investors think the market’s wild gyrations will be more subdued” ❈ Stabilisation of the broader economy has helped the nancial sector right itself. Best of all, in minutes released from their April policymaking meeting, Federal Reserve leaders said the American economy could begin to pull out of the recession later this year Messrs Irwin and Cho acknowledge that private economists still have a number of concerns; among them, that the unemployment rate is likely to remain elevated through at least 2011; that consumers could continue to rein in spending as they save more and borrow less; and that businesses face a glut of investments from the boom years. Even so, the case for optimism was bolstered by the 21 st May report of the Conference Board that its forecast of economic activity rose more than expected in April, the rst gain in seven months and fresh evidence that the recession could end later this year. Strengths among the components of the report exceeded weaknesses for the rst time in more than a year. The New York-based organisation, which conducts business management research, said seven of its leading economic indicators had risen, including stock prices, consumer con dence, average length of the work week, manufacturers’ new orders for consumer goods, and deliveries by vendors. Initial jobless claims dropped, another positive.

Telecom

Notable feature of the big increase in long haul bandwidthworldwide: less costly undersea cables The latest edition of TeleGeography’s global submarine cable map, published in May, shows 93 major cable systems now in

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EuroWire – January 2006 EuroWire – J ly 2009