Christopher Su/with AI assisted
A white paper, published in May 2022 by the University of Guam Regional Center for Public Policy, examines the economic viability and long-term benefits of investing in submarine cable operations on Guam. The report underscores that affordable broadband is fundamental to national welfare and economic growth, advocating for strategic incentives to maximize the “multiplier effect” of these investments.
1. Strategic Importance and Current Infrastructure
Guam’s unique geography positions it as a critical hub for trans-Pacific connectivity, serving as an ideal “stopping point” between Southeast Asia and the United States. The island’s status as a U.S. Territory provides a stable legal and economic environment that is highly attractive to cable builders.
- Existing Infrastructure: Currently, Guam hosts five cable landing stations—Tata Piti, Tumon Bay, Tangiusson, GNC, and GTA—connecting it to at least five major international undersea networks .
- Regulatory Oversight: Operations are governed by the FCC, ensuring compliance with the Cable Landing License Act of 1921 to prevent anti-competitive behavior.
- Funding: In 2022, Guam was awarded a $12.8 million federal grant to improve middle-mile and last-mile broadband infrastructure in Hagåtña, aiming to bridge resource gaps for approximately 10,000 households.
2. Economic Impact and Industry Growth
The paper highlights that submarine cables support not only the telecommunications sector (Docomo, GTA, IT&E) but also essential government agencies, military installations, and private enterprises like hotels and healthcare clinics.
- Regional Case Studies: Evidence from Malaysia and Indonesia shows that improved subsea connectivity led to significant increases in GDP per capita (up to 6.9%) and service-sector employment (up to 5.5%) within a few years.
- Future Opportunities: Beyond telecommunications, the report identifies high growth potential in several key sectors:
- Education: Enhanced connectivity can support e-learning, address educator shortages, and facilitate the exchange of “big data” for regional research.
- Healthcare: Reliable high-speed internet enables telemedicine, which studies suggest can save patients an average of $126 per visit compared to in-person consultations.
- Gig Economy: Modernization through “gig economy” apps (similar to Indonesia’s GoJek) could create numerous local jobs in delivery and transportation.
- Data Centers: Shifting focus toward building data centers and supporting utilities can create high-level positions such as data center engineers and program managers.
3. Challenges and Recommendations
Laying undersea cables is a multi-million-dollar investment with significant time and financial risks. The paper identifies several challenges and offers key recommendations:
- High Landing Fees: Local policy changes, like Bill 277-36 (COR), have proposed increasing landing fees to $100,000 per cable .
- Balance Between Revenue and Growth: The report cautions that high landing fees can discourage developers and suggests finding a “middle ground” for these costs to avoid impacting future partnership opportunities.
- Strategic Incentives: To attract global partners like Google, Facebook, and Amazon, the report recommends incentivizing the industry from the onset through tax incentives and subsidized licensure fees.
Conclusion
The advancement of information and communication technology (ICT) through undersea submarine cables offers a powerful tool to stimulate Guam’s economy and modernize its infrastructure. By leveraging its strategic geographical location and providing a competitive environment for investors, Guam can foster long-term job growth and enhance essential services like healthcare and education. The greatest opportunity for success lies in balancing regulatory fees with strong incentives for owners and operators to invest in the island’s future.