Japan, U.S. firms form venture for trans-Pacific telecom cable

Four U.S. and Japanese companies seeking to become the "carriers' carrier" will construct an underwater telecommunications cable between the two countries, the firms announced Thursday in Tokyo.

Pacific Crossing (PC-1), a 20,000-km fiber optic cable project, will be the first privately owned and operated underwater cable network crossing the Pacific, said Gary Winnick, joint chairman of Global Crossing Ltd.

Global Crossing is an undersea cable system developer based in Bermuda. The planned cable system is expected to be operational within two years, at a cost reportedly estimated at $1 billion.

The firm is a concern founded by a group of international investors led by California-based Pacific Capital Group, Inc.

Former U.S. President George Bush, an old friend of Global Crossing joint chairman Lod Cook, confessed he was not a telecommunications expert but took part in the conference, held at Japan Times-Nifco Hall in Minato Ward, by commenting on aspects of globalization and how the project could help further bilateral relations.

Other firms in the joint venture are Tyco International Ltd., a U.S. manufacturer of industrial and commercial products; KDD submarine Cable Systems, Inc., a subsidiary of KDD, Japan's largest international telecommunications carrier; and major trading firm Marubeni Corporation.

The U.S. and Japanese sides will each pay 50 percent of the capitalization costs, they said. "Global Crossing provides efficient outsourcing to telecommunication companies to put their capital to work more productively than (is done by) investing in infrastructure," said Winnick. "Our approach allows telecommunications companies, large and small, to purchase capacity on an as-needed basis," he said. "We are operating as a wholesaler -- (as the) carriers' carrier."

The number of international telecom carriers jumped from 250 in 1986 to 1,000 in 1997, and many have needed to invest heavily in infrastructure, according to Global Crossing.

The PC-1 cable system will offer carriers the option to purchase capacity on a city-to-city basis as well as on a traditional coast-to-coast basis, said Fumio Oehara, general manager of Marubeni. The cable will have a capacity equivalent to 960,000 telephone lines, company officials said.