New fiber optic cable in CNMI explored

To prevent cable failures that would cause business disruption, business people are looking at the possibility of putting up another fiber optic cable in the CNMI.

The business representatives who attended the May 2005 Marianas Roundtable Economic Summit on Saipan cited that having a new cable would provide “redundancy and diversity, mitigating the effects of any cable failures.”

In summit report released last week by the Saipan Chamber of Commerce, the group said that the current fiber optic “has created a business and political conundrum for the CNMI.”

It said that since the cable has only one owner, “there is no competition for the rates for the facilities among the CNMI islands and between Guam and the CNMI.”

As a result, the cost for some services between the CNMI and the U.S. are double the cost of the same services between Guam and the U.S.

Further, they said a single cable has no redundancy or backup.

It said that while Verizon, now Pacific Telecom Inc., is installing a microwave system to provide backup to the cable, “its capacity will be a fraction of the available capacity on the fiber-optic cable.”

The business people also said that even if PTI were to partially divest the ownership of the cable, as demanded by the local government, “the redundancy, diversity and single point of failures issues would remain unresolved.”

As it is, the business group said, “a single cable will limit the potential growth of telecommunications-dependent industries in the CNMI.”

In the report, the business people said that new technologies now permit longer Passive Optical Network fiber optic cable lengths, which makes a PON cable between Guam and Saipan feasible.

A PON cable, they said does not require active require active electronics between endpoints and is “a repeaterless cable.”

The cost of PON cable is estimated to be between $7 million and $9 million.

The group said that if multiple carriers own a new cable, competition would be developed between the CNMI and Guam.

In the report, the group recommended that a working group be formed, comprised of Guam and the CNMI telecommunications carriers, to discuss the feasibility of another cable and to develop the investment and financial model for this facility.

If a cable is feasible, the working group should develop the investment and financial model for adding the new cable facility as well as develop the operational engineering criteria.

In the report, the business group said that if a second cable is to become a reality, the CNMI government must provide assurance to

the owners that fees and taxes paid to the CNMI will be fair and consistent.

It said that an investment tax credit would be beneficial in encouraging investors to build a facility.

It also said that it would benefit the government to have an ownership of cable capacity for education, medical, public safety and general government operational communications requirements.

In general, the group said the CNMI has a telecommunications infrastructure far exceeding most communities in the U.S. with equivalent population.

On the other hand, “the capacity, redundancy and economy are behind locations currently providing or developing high tech communications businesses.”

It said that unless additional demand is developed, the communications infrastructure of the CNMI will provide affordable basic and enhanced services to the CNMI businesses and consumers, but will be insufficient to attract a major telecommunications industry.

If the CNMI intends to promote telecommunications based businesses, it said that a commitment to facilitate the increase investment in telecommunication infrastructure must be made by both the government and the private sector with the government providing incentives and light regulatory policies that encourage investment in a competitive telecommunication industry.