Crosslake Fibre Plans Submarine Cable across Lake Ontario

Budding Canadian dark fiber supplier Crosslake Fibre Inc. has announced its first infrastructure project, which will see the company establish a submarine cable system that will link Toronto and Buffalo, NY, across Lake Ontario. Crosslake expects the high-fiber-count undersea cable will provide diversity from other routes between the two cities as well as lower latency.

The submarine cable network will land just northwest of Lockport, NY, on the U.S. side and very near to Toronto's downtown core on the Canadian side. The subsea fiber-optic network should be ready for service by September 2018. Crosslake will own and operate the system as an independent operator. The company expects to use the submarine network to offer dark fiber and managed services to enterprise and carrier customers, as well as ultra low latency services to financial networks.

"We are excited to announce this project publicly as it's a very unique build," said Mike Cunningham, Crosslake Fibre's CEO. "The cable system will help fuel the massive and growing demands for wholesale bandwidth and cloud connectivity in the Greater Toronto Area and the Buffalo Niagara Region.

"Over the last seven months, we have made tremendous progress on the key aspects of the project, including permitting, sales, and financing," Cunningham added. "Our approach of partnering with industry-leading firms has positioned Crosslake to execute this project as planned."

Figure 5 – Crosslake Cable Map (for orientation purpose only)

Source: Crosslake Fibre Inc.

Partners listed on Crosslake's website include Pioneer Consulting, Construction CAD Solutions, United Cable Co., and FTTH Solutions Advisors. As this last company implies, Crosslake Fibre also has aspirations to develop broadband network infrastructure.

Source: Lightwave Magazine

ANALYSIS: Mike Cunningham’s father, Doug, is a Canadian submarine cable industry veteran who successfully built the East Caribbean regional cable, “Antilles Crossing”, in 2006 and more recently, initiated the ambitious “Arctic Fibre” (Japan-Alaska-Canada-UK) cable.

Michael Cunningham is currently leading an ongoing initiative to construct a cable between Ireland and France. This latest announcement of the Cunninghams’ intention to connect Canada to the United States via Lake Ontario is another example of the sweet spot that they play to i.e. short to medium-haul cables which address a niche or gap in the market.

Like “Eastern Light” reported above and Superloop’s “TKO Express” in Hong Kong, Crosslake is part of a trend in private submarine cable development which addresses niche opportunities with high-fiber-count repeaterless links to provide masses of low-cost capacity on dark fiber. Ordinarily, this approach to remunerating investment in submarine infrastructure is not recommended because the barriers to entry by competitors are limited to capital availability and wholesale margins are therefore quickly eroded but in these niche situations, the likelihood that others will try to address the same short-haul link, having lost first-mover advantage, is reduced.

Moreover, Crosslake has alluded to the fact that they also plan to offer “Managed Services”, although they will have to strike a balance between serving carriers in the wholesale space and competing with those same carriers in the enterprise space.

The length of a submarine fiber optic cable is not necessarily proportionate to the amount of revenue that can be generated. What is far more important is accessing the value in a link between two points. The Cunninghams have demonstrated their ability to identify such opportunities which should be far easier to implement and will probably deliver a higher return on investment than an ultra-long haul cable which lands in three continents.