Short-term pain, long-term gain for CNMI consumers & businesses? - KUAM.com-KUAM News: On Air. Online. On Demand.

Short-term pain, long-term gain for CNMI consumers & businesses?

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An undersea fiber optic cable that was damaged in July may have knocked out communications to Saipan for a time, but it may also have sparked moves within the telecomm industry that could double - if not triple - the Commonwealth of the Northern Mariana Islands' capacity for digital data, which includes telephone, Internet, and private data.

Incumbent local exchange carrier IT&E owns the lone cable serving the CNMI. CEO Jim Oehlerking says the company is now working to double the cable's capacity, but also to increase redundant systems to avoid a repeat of the crippling blackout. He told KUAM News, "We're also doubling our microwave capacity to make sure we have all the life safety services, police, fire, government services automatically backed up on our microwave. And we're also evaluating other technologies possibly satellite to increase capabilities so if there did happen to be another issue with the cable business would be able to go on as usual and we'd have enough capacity for normal operations while we did any repairs."

Meanwhile, rival telecomm company DOCOMO Pacific has announced it's working on plans for a new fiber optic cable between Guam and Saipan, citing what it says is the need for increased connectivity and lower cost bandwidth. CEO Jonathan Kriegel said, "And we believe that if there was more capacity at lower prices, that there would be a richer range of service offerings. And at a lower price, and if that happened, both for consumers and for businesses, government agencies, we believe that all of those would consume more therefore providing that opportunity to have a return on investment on the cable."

DOCOMO's plans were bolstered by recent and very public support from CNMI government leaders. The House and Senate both passed resolutions calling on the Inos Administration to assist DOCOMO with the application and processing of the cable project.  "So the government of the CNMI, the governor and his administration, the legislature, have been incredibly supportive. Really at their initiative, they have sought alternative solutions for the people of the CNMI," said Kriegel. "It's great encouragement for DOCOMO Pacific and we are trying to react and respond to this support from the government of the CNMI by accelerating our efforts on this project."

Oehlerking said, "We've been a long-term resident and business partner in Saipan and we will continue to be with both the government and the residents of Saipan and from their perspective I can understand if more people. I mean, it's always been an open market for anyone else to come in, and it always will  be so, I don't think there's particularly any downside for the government to invite more people in. We've had discussions ongoing with DOCOMO and we're aware of their plans that they've been considering and the fact that they're continuing down those lines really is not particularly surprising to us."

Another reason says DOCOMO is that IT&E's cable is nearly twenty years old, and DOCOMO says most experts estimate the life of a typical undersea cable is 25 years, so a new cable is inevitable. IT&E disputes the claim, saying because of the short distance between Guam and the CNMI, it operates an unrepeated cable.

And IT&E says the life expectancy of the cable is more like 50 years.

DOCOMO meanwhile also believes there is enough pent-up demand to justify its investment, with Kriegel saying, "There's a clear business case for an investment of this extra capacity to Saipan: you have a growing tourism industry, businesses, schools, hospitals.  It's quite clear where the demand comes from. It's obviously much more difficult on Tinian and Rota. And so that's one of the issues we're doing a lot of work on at the moment to understand how that business case comes together, and it may require some government support whether from the CNMI government or possibly from the federal government."

Meanwhile, IT&E's Oehlerking says his company is also upgrading its system, despite or perhaps because of the competition, noting, "We're doing other things, we got a 16-million dollar on-island fiber optic installation we're in progress on. So we're proceeding out with our plans, and I think DOCOMO's going to proceed with their plans."

DOCOMO's Kreigel estimates the cost of a new undersea cable from Guam to Saipan will be in the eight-digit range, and will take about two years to complete. Said Kriegel, "So we're working as quickly as we can to try and get to a stage where we can make a final decision on an investment. I would say that is something that's happening in a matter of months, not in a matter of weeks, but it's a short period of time. And in terms of the project, typically a project like this would take eighteen to twenty four months. Could take longer depending on the amount of permitting that's required. The actual time it takes to construct the cable, to actually lay have a cable ship come and lay the cable is very short, measured in a number of very few weeks. The really lengthy process is all the permitting."

Kriegel says DOCOMO will likely look for a partner to help pay for the cable project.

But despite all the planning, Kriegel says the cable project is far from a done deal.  In fact, he says the odds of completing such a project are surprisingly low. He concluded, "The degree of complexity in the permitting and financing of projects like this, you will very often, people in the industry say for every hundred undersea cable projects that are announced, one or two actually get built, and I think that's important to keep in mind."

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