$1.5 Billion: the Cost of Cutting London-Tokyo Latency By 60ms

MrSeb writes "Starting this summer, and thanks to the continuing withdrawal of Arctic sea ice, a convoy of ice breakers and specially-adapted polar ice-rated cable laying ships will begin to lay the first ever trans-Arctic Ocean submarine fiber optic cables. Two of these cables, called Artic Fibre and Arctic Link, will cross the Northwest Passage, which runs through the Canadian Arctic Archipelago. A third cable, the Russian Optical Trans-Arctic Submarine Cable System (ROTACS), will skirt the north coast of Scandinavia and Russia. All three cables will connect the United Kingdom to Japan, with a smattering of branches that will provide high-speed internet access to a handful of Arctic Circle communities. The completed cables are estimated to cost between $600 million and $1.5 billion each. As it stands, it takes roughly 230 milliseconds for a packet to go from London to Tokyo; the new cables will reduce this by 30% to 170ms. The latency drop will mainly benefit algorithmic stock market traders, but other areas like education, telemedicine, and POTS will also enjoy the speed-up. Perhaps more importantly, almost every cable that lands in Asia goes through a choke point in the Middle East or the Luzon Strait between the Philippine and South China seas. If a ship were to drag an anchor across the wrong patch of seabed, billions of people could wake up to find themselves either completely disconnected from the internet or surfing with dial-up-like speeds. The three new cables will all come down from the north of Japan, through the relatively-empty Bering Sea. In addition, the Arctic Ocean, where each of the cables will run for more than 5,000 miles, is one of the least-trafficked parts of the world. That said, the cables will still have to be laid hundreds of meters below the surface to avoid the tails of roving icebergs."

Comments

Bering Sea?

[wolrahnaes]

Next, on Discovery's Deadliest Cabling Job...

Millisecond trading

[Michael Woodhams]

Investing in shares for time spans of months is of general benefit to the economy, directing investment dollars to those best able to use them. Millisecond trading is of no benefit to anyone except millisecond traders, and any money they make is at the expense of people trying to do something productive. I propose that stock markets shift to a 'clock pulse' trading model: Trade bids for (e.g.) Apple are accumulated for (e.g.) 5 seconds and then all sales are resolved without regard for the order in which the bids arrived. This will cause no problems to real investors, but will rid us of the millisecond leaches.

However, I am not experienced with the share market, so constructive criticism is welcome.

Yay self-destruction

[billcopc]

"The latency drop will mainly benefit algorithmic stock market traders"

In other words, these cables will help machines ruin the global economy.

A part of me is kind-of glad they're speeding this up. We all know the system is destined to break, so the sooner that happens, the sooner people will wake the fuck up and demand change.

Re:Yay self-destruction

[isorox]

It's funny. But idiot's like the GP don't understand that speculators like me make money up and down in the market. I don't care one way or the other, I can make money in either direction.

For every cent you make, someone else loses it. You're like the sad people in vegas that spend their lives camped on the slots, the only difference is you gamble with other peoples money.

Re:Yay self-destruction

[bgarcia]

For every cent you make, someone else loses it.

Yes, because there is a fixed amount of wealth in the world in all of history, and nobody ever increases society's wealth, correct?

Neutrinos

[mbone]

If you want to cut latency, communicate through the Earth with neutrinos. If we could just get the bit rate up some (from the current 0.1 bps), you could communicate to anywhere on Earth with a one way time of 40 milliseconds.

Re:Neutrinos

[erice]

That's true as long as it doesn't take any time to detect and decode a signal sent with neutrinos. Neutrinos are not electrons and trying to extract a signal from them is challenging enough that, in the near term, the computational latency would likely dwarf the transit time.

$600 million or $1.5 billion? Depends

[hoggoth]

The higher estimate of $1.5 billion is contingent on using Monster Cables.

Parasitic trading

[Anonymous Coward]

Parasitic trading is tolerated not desired. It diverts profit from investors into traders, reducing the number of investors in a market by reducing the profits they can make and thus reducing the capital available to companies. Fewer companies go to the stock market to obtain capital as a result.

So yeh, you basically understood it correctly, however it has little to do with 'share' trading, rather derivatives.

The derivatives market far outweighs the shares market these days. These are pure bets stuff like: "derivative X pays out k(Z-W) for each cent asset Z rises above (K+U+Y)/3.... ladies and gentlemen place your bets I will spin the wheel". It's a bookies pure bet.

Unlike a proper bookies, Wallstreet pays out more money that it receives, so banks around the world place bets on these derivatives in order to make money. The banks and Wallstreet can afford to buy cables, it's pocket change since the underlying asset may only be a shopping mall worth $50 million, but the derivatives derived from that can be worth billions since it's a virtual asset with no real value beyond the fact it pays out a profit.

In a good year (when they take more money than they pay out) Wallstreet awards themselves big fat bonus's, in a bad year, the Fed extends them more credit against smaller assets. So overall, because they pay out more than they take in, their borrowing leverage increases. Today it's something like 30:1 or more.

The Fed says 'the loans were good we got all the money back', but that's a lie. They print money against 'Linden dollars', Wallstreet buys assets that pay out enough to cover the interest with that cash, Wallstreet borrows against those new assets, and pays back the money borrowed against the 'Linden dollars'. The Fed says 'hey look we got all our 'Linden loans' back', Wallstreet gets to own a real asset, everyone holding dollars has been silently robbed by inflation.

But hey - faster internet! /rant

Why focus on Trading when we talk about latency?

[grelmar]

There are so many internet applications where low latency is a win. VOIP, remote systems management, two-way graphical applications that for various reasons are location sensitive (there's more of these types of apps then you realize - think proprietary software that would be either illegal or economically dangerous to physically locate outside of NA or the Eurozone, including geophysical analysis software for mining/oil exploration, among other things)...

There are lots of scientific applications where latency is critical.

But oh, that would be difficult to discuss. Much easier to relate everything to a vilify-able application.

Come on, for once, talk about the benefits of a mega infrastructure project.

Oh, right... Slashdot. My bad. That's just not what we do here.

Re:Posting doesn't match up with the speed of ligh

[Sneeka2]

I really have no clue whether 230ms is a realistic number.

I currently get a 431ms Japan <> UK ping on a pretty mediocre Japanese ADSL line in the country side.
So, yes, that's realistic.

Re:Also good for gamers

[SuricouRaven]

I think chess games via postal service may win the latency contest.