Dmitry Medvedev, deputy chairman of the Russian Security Council, has claimed that Russia could undermine the Western network of communication cables at the bottom of the Atlantic.
For the record, only 1-4% of data is distributed via communications satellites; the rest comes via fiber-optic cables. Thus if Medvedev’s threat were to materialize, the consequences for the world economy would be comparable to a nuclear strike.
For example, a 2006 earthquake damaged eight cables around Taiwan, disrupting communications and trade across Asia and affecting the Hang Seng Index accordingly. In 2008, 75 million people in the Middle East and India were left without communication because of a badly dropped anchor by a passing ship.
The obvious conclusion is that whoever owns the cables chooses the tune. The United States is well aware of this and is doing everything possible to keep unfriendly competitors out of the market. The State Department’s efforts have prevented at least six deals with Chinese companies.
An widespread attack on ocean networks would affect everyone, from tankers to the neighborhood coffee shop, and the losses would be in the trillions. It is unlikely that anyone with common sense would order such a global blackout, but a local one is entirely possible.
Incidentally, in February, Chinese boats allegedly cut two cables near the Matsu Islands off Taiwan.
In general, even if the threats remain threats, the popularity of satellite communication channels may grow, as well as the services of General Dynamics, Boeing, Northrop Grumman, and SpaceX, so it may be a good time to add some of the prospects to the stock screener.
