1. An update on Transpacific cables

2. DISCLAIMER The content of this presentation does not reflect nor represent the opinion of America Online, Inc. Lets keep it short, you know the standard stuff…..

3. AGENDA v Introduction v Technology v New Cable Systems v Costs v Q&A

4. AGENDA v Introduction v Technology v New Cable Systems v Costs v Q&A

5. What happened? FromTo monopoly * free market PTO owned * private members only * IRU WDM * DWDM coast to coast * city to city retail * wholesale

6. AGENDA v Introduction v Technology v New Cable Systems v Costs v Q&A

7. A little History The First cable to Asia, from the Red Sea to India was laid in 1859-1860 but never worked over its full length. First trans-Pacific telegraph cable was completed in 1902 between the United States and New Zealand. First Amplified telephone cable, TAT-1 was completed 1955. After two decades, the first fiber optic cable across the Pacific became operational (TPC-3, in 1988) Soon afterwards it was connected to the Hawaii-4 & Guam- Philippines-Taiwan (GPT) cables, thus completing the 1 st digital links across the Pacific.

8. ALCATEL OALC4 - 17mm Cable Cables

9. State of the art cable ships TSSLs C.S. Charles Brown

10. Elements of a Submarine Cable System Cable Station Beach Manhole Land Section Repeater Cable Branching Unit Network Management Optical & Transmission Equipment Power Feed Equipment

11. undersea cable burying, retrieval, and repair operations equipment TSSLs SCARAB IV ROV TSSLs Pacific SCARAB I ROV

12. Repeaters Do not regenerate, amplify Erbium-doped fiber amplifier Well adapted to WDM Up to 8 fiber pairs Direct monitoring 3 m

13. Monitoring the Repeaters HIGH LOSS LOOP- BACK MODULE REPEATERS SPACING (d) Special modulated signal sent from line is looped- back at 1st repeater and return in time T. Signal from 2nd repeater will return in time T+ T Signal from 3rd repeater will return in time T+2 T T= 2dn/c, where n=index of refraction and c=speed of light

14. Repeaters spacing

15. Typical restorable submarine cable system LS Subsea LS PoP Asia/Pac Backhaul US Backhaul

16. The Wavelengt Division Multiplexing technology basics

17. The WDM technology basics

18. Single channel in a fiber

19. WDM is the technique for sending several channels at different colours through the same fibre

20. Multiple channels in a fiber

21. Generic DWDM Architecture To line STM-N From line DMUX + Chromatic Dispersion Compensator STM-N OA Digital Signal Processing OR RECEIVE Mux OT OA TRANSMIT Digital Signal Processing

22. DWDM spectrum range 1.0 0.8 0.4 0.2 0.1 Loss (dB/Km) 1.2 1.3 1.4 1.5 1.6 1.7 Wavelength ( m) Single mode fiber 1530 to 1565

23. 0 80 160 240 320 400 480 100020003000400050006000700080009000 10000 11000 12000 System Length (km) Fiber pair capacity (Gbit/s) DWDM Technology: Capacity Varies with Length:

24. AGENDA v Introduction v Technology v New Cable Systems v Costs v Q&A

25. Recently Activated Cables China-US* PC – 1* SEA-ME-WE-3 FLAG Europe-Asia Cable Future Cables Japan-US Southern Cross OXYGEN Asia Pac Cable Network 2 East Asia Cable North Asia Cable FLAG Pacific-1

26. China-US US Bandon, OR San Luis Obispo, CA CHINA Chongming Shantou GUAM 80 Gbps / 2XSTM-256 2.5 Gbps x 8 Wavelengths x 4 Fiber Pairs JAPAN Chikura Okinawa S. KOREA Pusan TAIWAN Fangshan RFCS Outlook: Active Active 16,000 Route miles Type: Consortium

27. PC - 1 US Harbour Pointe, WA JAPAN Ajigaura Initial 160 Gbps capacity, 2.5 Gbps (STM-16) x 8 Wavelengths x 4 fiber pairs (Upgradeable to 640 Gbps using DWDM technology) Shima Grover Beach, CA No. Ring RFCS: In Service So. Ring RFCS: November 2000 Type: Private (Global Crossing) 640 Gbp/s SDH Ring Design In Service November 2000 12,600 Route miles

28. SEA-ME-WE 3 JAPAN Okinawa S. KOREA Keoje UK CHINA Shanghai Shantou TAIWAN Taipei Toucheng Fangshan HONG KONG Deep Water Bay PHILIPPINES Batangas VIET NAM Danang THAILAND Satun MALAYSIA Mersing SINGAPORE Tuss Tungku INDONESIA Jakarta Medan INDIA Cochin Munbai MYANMAR Pyayyypon PAKISTAN OMAN U.A.E. DJIBOUTI SAUDI ARABIA TURKEY CYPRUS GREECE FRANCE PORTUGAL MORACCO ITALY Penang 20 Gbps (STM-128) 2.5 Gbps x 4 Wavelengths x 2 Fiber Pairs Submarine Cable Network Branch Unit RFCS Outlook: ActiveType: Consortium EGYPT

29. Japan-US JAPAN Kita-Ibaraki Maruyama HAWAII Makaha Beach, Oahu US Manchester, CA Shima Moro Bay / San Luis Obispo, CA 640 Gbp/s SDH Ring 10 Gbps x16 Wavelengths x 4 Fiber Pairs 12,00 Route miles RFS: So Ring 2/01 No Ring 5/01

30. Southern Cross Branch Unit USA Nedonna, OR San Luis Obispo, CA HAWAII Kahe Point Spencer Beach NEW ZEALAND Takapuna Whenuapal AUSTRALIA Belrose, Sidney Rosebery, Sidney FIJI Suva 160 Gbp/s SDH Ring Design 80 Gbp/s SDH Ring Design Backhaul & cable sys interface: STM-1 November 2000 January 2001 RFCS Outlook: November 2000

31. FLAG Pacific-1 RFCS Outlook: 2H02Type: Private (FLAG Telecom) JAPAN Misaki Chikura HAWAII Honolulu US Washington ALASKA Aleutians CANADA Vancouver Is. Bay Area - North Bay Area - South Tokyo / Yokahama Loop 22,000 Route miles Supplier is Alcatel 10 Gbps x 64 Wavelengths x 8 Fiber Pairs Repeatered Vancouver / Seattle Loop San Francisco / Los Angeles Loop

32. S. Korea Pusan TAIWAN Toucheua MALAYSIA Kuan Tan JAPAN Kitaibaraki Chikura CHINA Shanghai Shantou SINGAPORE Katoug HONG KONG Lantau PHILIPINES Batangas 2.56 Tbp/s SDH Ring Design 10 Gbps x 64 Wavelengths x 4 Fiber Pairs ASIA PAC CABLE NETWORK 2 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

33. CABLES FACTS SUMMARY

35. AGENDA v Introduction v Technology v New Cable Systems v Costs v Q&A

36. CABLES PRICING MODELS Up to spring 1998: Retail T1-E1, T3 1999: Wholesale T3/STM-1 available everywhere (IRU or Capital Lease + O&M) 2000: Wholesale STM-4c available 2002: Wavelength (2.5/10Gb) offering?

37. CABLES PRICES EXAMPLES Cpacity between Tokyo and the West Coast

38. CABLES PRICES SUMMARY O&M Charges are dropping drastically as well

39. The Tug of War of the Cost of Cable For suppliers: The first system to connect bandwidth- starved points may capture sales at a much higher price than when the rest of the bandwidth barons (private or consortium) join in. For Buyers: The opposite strategy holds true: If you dont like bandwidth prices now, wait a bit. They will likely change soon enough.

40. Acknowledgements Many thanks to: v Tyco Submarine System v Genuity v Global Crossing FLAG

41. AGENDA v Introduction v Technology v New Cable Systems v Costs v Q&A