~ Alan Dupont, The Australian
A few weeks after the explosions that ripped through the Nord Stream gas pipelines in the Baltic Sea last September, a Russian spy ship was tracked and intercepted by the Dutch coastguard near a wind farm in The Netherlands’ territorial waters. Although the jury is still out on who was responsible for the explosions, Western intelligence is in no doubt that Russia has been systematically mapping Europe’s extensive subsea infrastructure.
According to the head of Dutch army intelligence, Russian actors are trying to “uncover how the energy system works in the North Sea” in preparation for possible “disruption and sabotage”. But that’s only part of the story. Ninety-five per cent of the world’s communications traffic and $US10 trillion ($14.7 trillion) worth of financial transactions annually are carried along more than 450 fibre-optic undersea cables. Successfully hacking into these cables would reap a rich intelligence dividend. In wartime, sabotage of vital subsea cables could inflict enormous damage on an adversary and, in extremis, bring a digitally dependent society to its knees.
Seabed warfare is a little understood but growing national security discipline that spans the operations of stealthy nuclear submarines and autonomous undersea drones to the protection – and exploitation – of the critical underwater architecture that enables the internet and the world’s energy system. It is a vitally important domain for Australia. As a digitally advanced, maritime nation we are heavily reliant on the sea for our wealth, security and connectivity.
The Albanese government’s determination to make Australia a renewable-energy powerhouse could make us, perversely, more vulnerable to undersea sabotage. Think of all those offshore wind farms delivering electricity onshore, and companies like Sun Cable sending electricity generated from solar panel arrays in the NT to Singapore via underwater pipes.
We haven’t paid enough attention to seabed warfare, the vulnerability of our subsea infrastructure or the developing undersea cold war between the US and China that adds another layer of tension to the world’s most important relationship and complicates our own government’s attempts to patch up differences with China. Unless this cold war is arrested, the internet could split into two competing systems, one led by the US and the other by China.
That would be a bad outcome for everyone. Rand Corporation analyst Timothy Heath says: “The more the US and China disengage from each other in the information domain, the more difficult it becomes to carry out global commerce and basic functions” such as online banking and producing the tools that drive the global economy. A divided or compromised internet would increase business costs, inhibit human interaction, slow communications and fracture the digital commons.
Avoiding this future won’t be easy. The struggle for control of Neptune’s kingdom is part of a widening contest for economic and geopolitical primacy between the US and China that descends to the ocean floor. Cables are not only conduits for information but also “weapons of influence”. Critical underwater infrastructure now must be protected from espionage and sabotage.
Observing and monitoring a cable system that if laid out in a straight line would stretch around the world 30 times is no easy task. “An analogy would be the assignment of two cop cars to watch over the entire highway network of the United States,” says Sebastian Bruns, a naval expert at Germany’s University of Kiel. Some cables lie at extreme depths of up to 8000m, deep enough to almost swallow a submerged Mount Everest.
The challenge of operating at such depths was brought home to the world when the experimental Titan submersible imploded at 3500m below sea level last month. Although three-quarters of the seabed is accessible at 3000m and 97 per cent at 6000m, shallower cables are still at serious depths requiring specialised cable laying and maintenance vessels.
Historically, Western companies have dominated the undersea cable business. US company SubCom, Japan’s NEC Corporation and France’s Alcatel Submarine Networks are three of the big four companies that manufacture and lay subsea cables globally using fleets of cable ships. The other is China’s HMN Technologies.
“Subsea internet cables were not designed to have to be constantly patrolled and repaired. They are a peace project” based on co-operation and openness, writes Elisabeth Braw, a senior fellow at Washington think tank the American Enterprise Institute. All this is changing as national security considerations reshape the sector, determining the routes, funding and purposes of these cables.
The central problem for the West is “Russia and China are clearly moving out to utilise the seabed to hold at risk those transoceanic cables”, says Stephen Horrell, a senior fellow at the Centre for European Policy Analysis in Washington, DC. Traditionally, militaries have focused on anti-submarine warfare in the undersea world. With the development of underwater drones and mine countermeasure missions, as well as the increasing need to protect transoceanic cables and gas pipelines, the scope has widened. “Seabed warfare is another evolution,” Horrell says.
Braw describes what happened to the residents of Taiwan’s Matsu Islands in February when Chinese vessels cut the islands’ two subsea cables. Despite the backup microwave transmission system, connections were extremely slow. Sending a text message took about 20 minutes. Most websites were inaccessible. Hotel owners couldn’t access online reservation records, which affected the tourism industry. Without access to e-commerce platforms, business operations were hampered. Ticket vending platforms for planes and ships went down, bringing home the reliance of developed economies on the internet.
China’s ruling Communist Party knows control of the information highway is the path to power and that subsea internet cables are the new sinews of military muscle and commerce. In 2015 Beijing launched the Digital Silk Road, a strategic initiative characterised by Jonathan Hillman in his insightful book of the same name as China’s “quest to wire the world and win the future”.
Complementing the better-known Belt and Road Initiative, the Digital Silk Road aims to upend US control of the digital order. By developing its own cable-laying capabilities, competing for business internationally and exploiting the vulnerabilities of the existing architecture it soon became obvious that China had targeted the West’s near monopoly over subsea fibre-optic cables. So began the cable wars.
Fearing the consequences, the US struck back. In banning Chinese telecommunications company Huawei from its critical infrastructure, the Trump administration effectively killed its subsidiary Huawei Marine, which had about 15 per cent of the cable-laying market by 2019. The Clean Network initiative, intended as a hammer blow to China’s digital challenge, was established by secretary of state Mike Pompeo “to free the world from authoritarian malign actors” – code for China.
Out of this came the concept of trusted partnerships. In future, like-minded countries would deal only with partners who could be trusted to maintain the integrity and security of technology systems, especially the internet. To underline the point, a US State Department spokesman asserted that countries should prioritise security and privacy by “fully excluding untrustworthy ventures”.
Unsurprisingly, China responded by ramping up investment in its own cable sector. A Chinese cable manufacturer, Hengtong Group, bought the ailing Huawei Marine, renamed it HMN Technologies and bid for a lucrative subsea cable contract. SeaMeWe-6 would have allowed HMN to link Southeast Asia with the Middle East and Western Europe across 19,000km of ocean. But after being selected, the company was quietly dropped in favour of US cable giant SubCom.
Other bid invitations to HMN began to dry up as the provisions of the Clean Network initiative became more onerous and the US applied a full-court press on China’s cable sector. As a result, the US has been largely successful in preventing Chinese companies from becoming major players in the market. Telecommunications market research company TeleGeography estimates that China provides only about 10 per cent of all existing and planned global cables where the supplier is known.
But the cable wars are far from won because Chinese President Xi Jinping sees his country’s ability to build and maintain its own internet cables as critical to national security. Reuters news agency reported in April that Chinese telcos are mapping out one of the world’s most advanced subsea cable networks to compete with SubCom’s SeaMeWe-6 project. Known as EMA (Europe-Middle East-Asia), the proposed cable would connect China with Europe via Singapore, Pakistan, Saudi Arabia, Egypt and France. The construction of two parallel US and China backed cables between Asia and Europe would be unprecedented, says Braw, and “an early sign that global internet infrastructure, including cables, data centres and mobile phone networks” could splinter.
A Financial Times report found that China is pressuring companies to use HMN cables in its waters. According to Braw, before foreign consortiums submit an application to lay cables in the disputed South China Sea, “they must obtain a non-objection letter from the People’s Liberation Army, which has asked for reroutes in the past”. Braw says the re-routing of cables is a “literal illustration of decoupling”. Cables are becoming “a new Iron Curtain”.
Chinese vessels also repair and maintain many of the subsea cables of its competitors and adversaries, providing valuable opportunities for hacking and sabotage. This largely has gone unnoticed, including in Australia, because we haven’t looked closely at whose cable ships are repairing whose cables.
The US has its own trump card – SubCom. Born out of a Cold War project to spy on Soviet submarines, SubCom is one of the biggest developers of subsea fibre-optic cables for tech leviathans Alphabet-Google, Microsoft, Amazon and Meta as well as content providers such as Netflix. The growth in demand for their services has been phenomenal, rising from about 10 per cent to 70 per cent of international bandwidth in the past decade. But Washington also needs SubCom “to expand the navy’s undersea cable network so that it can better co-ordinate military operations and enhance surveillance of China’s expanding fleet of submarines and warships”, concludes a recently published investigative report by Reuters.
SubCom now works primarily for the Pentagon and American tech companies and has become indispensable to US custodianship of the internet. No other trusted company has the resources and political connections to manufacture, lay and maintain the underwater cables that underpin US commercial and military strengths. But the company is also important for Australia’s internet and military security, having worked in partnership with Australian tech entrepreneur Bevin Slattery to build a subsea internet cable from Perth to Oman in the Middle East.
Unable to raise sufficient private capital for the $US300m project, the savvy Slattery managed to secure financial backing from the US Navy by agreeing to build a branch line to the Diego Garcia military base in the Indian Ocean.
The Oman-Australia cable also has a little-known second branch line to the Cocos Islands. Strategically located less than 3000km from Perth, the airfield on this cluster of picturesque coral reefs is due for an upgrade that will boost Australia’s maritime surveillance capabilities across a wide swath of the Indian Ocean and the South China Sea.
Prime ministers are not known for attending cable launches. But the significance of the Oman-Australia cable was underscored by Anthony Albanese’s presence at the launch in company with Slattery in October last year. Although the Prime Minister focused on the commercial benefits of the cable, tweeting that it could stream “over 65 million Netflix shows simultaneously”, its real significance is the fusion of Australian and US national security interests.
More such partnerships are on the cards. A US company, TPN, is building a low latency, transcontinental fibre optic cable known as Project Echo from the west coast of the US to Singapore via Guam, Palau and Indonesia, avoiding the contested South China Sea.
Aside from the commercial benefits in linking the US with populous and digitally hungry Southeast Asian nations, Project Echo will be a critical enabler of the expanded defence footprint in northern Australia. The Australian Defence Force has an enormous and growing appetite for data and increasingly relies on secure internet connections to deliver data across the full spectrum of its activities, from training to warfighting. The problem is that a proposed branch line linking Darwin with the Project Echo TPN cable, estimated to cost $US125m, has yet to be funded. It won’t be without government support as the business case for the branch line doesn’t stack up commercially. The absence of a Darwin branch line will significantly impede the government’s intended defence build-up in the north.
If the commercials don’t add up, we need to emulate the US and China and fund strategically important cables for national security reasons. The only way to make our subsea energy and internet architecture secure is to have the cables built and maintained by trusted companies. As the cable wars heat up, it will cost us dearly if we don’t learn these lessons.
Alan Dupont is chief executive of geopolitical risk consultancy the Cognoscenti Group and a non-resident fellow at the Lowy Institute.