New Developments on Out-of-Service Submarine Cables
 
March 31, 2005
 
Douglas R. Burnett- New York

Douglas R. Burnett ¹

One measurable effect of the bursting of the “telecom bubble” is the tremendous number of submarine cable systems that have been recently retired and taken out of service.  In the 2003-2005 period, at least  22 cable systems were retired or were announced by their owners to be in the process of being taken out of service.   These systems include Brunei-Singapore, China-Korea, Cuba 7, Gemini, GPT, HAW4, HAW5, HJK, HONTAI II, NPC,  PTAT, TAT8, TAT9, TAT10, TAT11, TCS1, TPC3, TPC4, UK-Denmark 4, and UK-Spain 4, UK-Netherlands 12, and UK-Belgium 5.

The retirement life spans of these cables are in almost every case significantly less than the planned commercial life of the systems that characteristically were expected to match the service life of the repeaters in the system of between 20 and 25 years.  In one case, the cable had only about seven years of service.

The premature retirements of so many modern systems is a direct reflection of the market-shaping forces at work in international telecommunications.  These forces include the oversupply of capacity that peaked in 1999-2002, especially in the transpacific and transatlantic routes, and the continued exponential technology evolution that dramatically increased the capacity available in the newest ring fiber optic sub-sea systems.  One of these new systems has the capacity of several systems which a few years before were considered to have revolutionary capacity increases.  Faced with stiff global competition and declining revenues, cable owners have applied intense scrutiny to the operations and maintenance (O&M) costs of their cable systems.  Those systems that provide largely redundant capacity have or are in the process of being taken out of service.

The scale of the retirements of so many relative “young” cable systems during the past two to three years appears to be without precedent in the 149-year history of transoceanic submarine cable communications.  Parallel to these changes is a new interest by coastal state regulators in requiring that out-of-service cables be removed from the seabed.  Liabilities for out-of-service cables is also a concern.  These changes raise important questions about the legal status of out-of-service cables and the management of out-of-service systems.

The International Cable Protection Committee (ICPC) recently responded to these dynamics by issuing its updated  “ICPC Recommendation No. 1 Management of Redundant and Out-Of-Service Cables”2 (Recommendation).  The Recommendation, like other ICPC recommendations, generally represents a consensus view of international owners and operators of submarine cable systems.  It provides timely guidance for the owners of these recently or soon to be retired cable systems.

The Recommendation takes into full account the legal status of out-of-service cables.  While a full examination of the legal status of these systems is beyond the scope of this article, salient points can be  summarized.3

International telecommunication cables enjoy unique status under international law and treaties. The freedom to lay, maintain and repair international cables is well established in the International Convention for the Protection of Submarine Cables (14 Mar 1884), 24 Stat 989 (1 Dec 1886), 25 Stat 1424, 25 Stat 1425 (7 Jul 1887) TS 380 (Cable Convention); The Geneva Convention on the High Seas, April 29, 1958, 13 U.S.T. 2312, T.I.A.S. 5200, 450 U.N.T.S. 82 (Geneva Convention); and the United Nations Law Of the Sea Convention (1982) (UNCLOS).  As of February 1, 2005, 157 nations are signatories to UNCLOS and 148 nations have ratified the Convention.

These treaties do not address removal of out-of-service cables.  In fact, only UNCLOS addresses the decommissioning of structures and installations, but essentially those related to natural resources on the seabed.  Even these provisions do not include pipelines, let alone cables.4

The treaties do, however, establish that a coastal nation may not unilaterally impede the universal freedom to lay and maintain cables, especially outside of its 12-mile territorial sea.5 If any nation were to unilaterally require the removal of cables outside of its jurisdiction, it would be a violation of these treaties.  Accordingly, under international law, there is no requirement to remove out-of-service cables.

A coastal nation can require removal of an out-of-service cable within its territorial waters.  This has been done in the United Kingdom.6 The issue is whether international cable removal can be required outside of a nation’s territorial seas.  In Canada, the province of Nova Scotia,7 and in the United States,  New Jersey8 and California are attempting to implement cable removal regulations or requirements through permitting despite an obvious lack of jurisdiction over international cables outside of territorial seas. 

As the above legal discussion shows, removal of out-of-service cables outside of national territorial seas is primarily a decision made by the cable owners.

The fact that there are no legal requirements for removal of an out-of-service cable does not mean that the cable owners do not continue to have other legal responsibilities.  Under international law, cable owners continue to have liability for third party claims for indemnification of sacrificed fishing gear or anchors.9  Indemnification only validly arises when the owner of the lost anchor or fishing gear makes a sacrifice to avoid injuring a submarine cable and after having taken all reasonable precautionary measures beforehand to avoid the cable.10  Thus, for example, a fishing vessel which trawls over a charted cable with culpable negligence11 cannot validly claim for sacrificed gear.

Even though the likelihood of successful sacrifice claims are low, the risk is further reduced by the fact that a telecommunications company’s general and excess liability policies on its property already cover this risk.

The ICPC Recommendation takes international law into account in providing cable owners and operators with guidelines which can be considered in determining whether a cable which has been taken out of service should be removed from the seabed. 

 The Recommendation factors that may be considered in deciding whether to remove a cable include the following:

• Pre-Decision Factors12

Factors which cable owners should consider in deciding whether to remove an OOS Cable including the
following:

3.1.1    Any potential effect on the safety of surface navigation or other uses of the sea including a comparison of whether removal is reasonable or realistic given the presence of other manmade objects on the seabed such
as shipwrecks, debris, and oil and gas structures and installations.

3.1.2    Present and possible future effects on the marine environment.  If the cable is composed of material that is inert or environmentally benign, consideration should be given to leaving the cable in place.

3.1.3    The risk that the cable will significantly shift position at some future time.

3.1.4    The costs and technical feasibility associated with removal of cables.

3.1.5    The determination of a new use or other reasonable justification for allowing the cable or parts thereof to remain on the sea-bed.

3.1.6    The comparative environmental impact of leaving the cable in place compared to the disruption caused by attempting to remove the cable.

3.1.7    The management of out-of-service cables as part of the cable protection program.

3.1.8    The potential socio-economic and economic benefits of recovering the cable.

• Post-Decision Factors

If the decision is to retain a redundant cable for future use or to leave an out-of-service cable in place, cable owners should consider implementation of the following:

3.2.1    Notification to international and natural charting authorities that the cable is no longer in service.

3.2.2    Notification to local fishermen and other seabed users of the change in status, and confirmation that any future claims for sacrificed gear will be considered on their merits.

3.2.3    Confirmation that the cable owner remains responsible to any party by insurance cover or otherwise for the OOS Cable.

3.2.4    Consideration of alternative uses for the cable such as donation to a scientific research study.

With these basic steps, the management of out-of-service cables can be responsibly handled by cable owners and operators as a routine business task.  While the recent level of activity in placing cables in an out-of-service status may be unprecedented, the applicable international legal norms in UNCLOS govern all international cables, including those which are out of service.  These norms do not allow coastal nations to require removal of cables beyond territorial seas.  Cable owners should evaluate each cable system and make the appropriate voluntary choice by responsibly considering the various factors involved.

For more information, e-mail Douglas R. Burnett at douglas.burnett@hklaw.com  or call toll free,
1-888-688-8500.

 

1. Douglas Burnett is an International Cable Law Advisor (ICLA) for the International Cable Protection Committee (ICPC).  The opinions expressed by the author are his own and do not represent the position of the ICPC.

2. Copies of this ICPC Recommendation and other ICPC recommendations can be obtained at no charge by contacting the Secretary, ICPC at www.iscpc.org.

3. For a more detailed legal analysis, see  Burnett, “The Legal Status of Out-of-Service Submarine Cables,” 137 J. of Maritime Studies  22 (July/August 2004).

4. Article 6 (3) of UNCLOS.

5. See Cable Convention, Art. 1, Geneva Convention, Art.26, and UNCLOS, Articles 58, 79, 87 and 112.

6. Outside of territorial waters, the Petroleum Act of 1998 in the United Kingdom does address decommissioning of offshore installations and pipelines on the United Kingdom’s continental shelf and requires a comparative assessment to determine whether removal will be required.  Submarine telecommunications not involved with the exploitation of petroleum are not covered under this law. The assessment balances the complexity and associated technical risk, risk to personnel, risk to navigation and other users of the sea, environmental impact and cost. Anderson, J.M., “Decommissioning Pipelines and Subsea Equipment, Underwater Technology, Volume 25, Nos. 2, Summer 2002. 

7. See ICPC Comments In the Matter of Considerations for Seabed Utility Corridors to Offshore Nova Scotia - A Discussion Paper June 2003, filed on September 5, 2003. 

8. The ICPC Comments on Coastal Zone Management; Coastal Permit Program; Proposed Readoption Amendments: N.J.A.C. 7:7E (submerged cables) January 7, 2002, DEP Docket Number:34-01-12/71 were submitted by the ICPC Secretary on March 7, 2002. 

9. See the Cable Convention, Article 7, the Geneva Convention, Article 29, and UNCLOS, Article 115.   Legally sacrificed anchor or fishing gear claims are limited to the actual item sacrificed and do not under any circumstances include lost profits.

10. See the Cable Convention, Article 2, the Geneva Convention, Article 27 and UNCLOS, Article 113. The Submarine Cable Act, at 47. U.S.C. §§ 21-23 is an example of national law implementing these obligations.

11. Culpable negligence is conduct which falls short of prudent seamanship.

12. The reader is urged to review the complete ICPC Recommendation  No. 1, only a portion of which is quoted in this article.