Mysteries surround Facebook’s Asia Pacific Gateway project

The Asia Pacific Gateway (APG) is an NTT (Nippon Telephone and Telegraph)-led initiative to lay submarine cables across 12 Asian Telcos and not 11 as initially reported.

These countries include: China (China Mobile, China Telecom, China Unicom), Taiwan (Chunghwa Telecom), Korea (KT and LG Uplus), Japan (NTT Communications), Singapore (StarHub), Malaysia (Time dotcom), Vietnam (Viettel and Vietnam Posts and Telecommunications) and the Philippines (PLDT).

The net effect of this project is to increase the available capacity in Asia from 10 Terrabytes to over 40 terrabytes (see graph).

According to published reports in the BBC, this project is envisioned to provide “a better user experience for a greater number of Facebook users in countries like India, Indonesia, Malaysia, the Philippines, Hong Kong, and Singapore“. This reflects “Facebook’s journey into the East” where growth rates are still climbing while its US growth had “slowed sharply”.

Potential Benefits:

For startups in Asia, among the benefits includes lower latency (time it takes traffic to reach a destination) and a possible drop in bandwidth costs (at least for intra-asia). New revenue sources could open up. Companies like Starhub, in theory, could extend its cable services to other countries by routing the video over to this 40gbps (soon to be 100gpbs) link.

Another potential benefit might be improved mobile Internet access for users via wifi hotspots instead of LTE or 3G technology. Companies such as Devicescape offers a Wifi Offload technology for mobile operators that automatically detects nearby Wifi hotsposts and connects mobile subscribers over WiFi rather than take up scare capacity on cellular networks.

Yet the project raises some questions.

Mystery #1 No direct link to the US.

Unlike Google’s UNITY project that includes a ‘back haul’ to the US (Network diagram reproduced below), the APG project (based on recent published diagrams) show that it has no known links back to the US where Facebook servers are.

Without this link back to the US and to Facebook servers, it is unclear how Facebook users using APG could connect to Facebook. Nor for that matter, how “the fibre-optic cable will help the countries send and receive data to North America faster,” according to consortium leader Time Dotcom.

Mystery #2 Facebook is Censored in China.

Even if Facebook were able to connect its servers to the APG, Facebook is currently blocked in China and until censorship is lifted, users in China won’t be able to access the social network.

Speculation is that either Facebook has already secured an arrangement with the Chinese government, or it plans on tying up with established Chinese operators like Baidu.

Mystery #3 Could Facebook’s APG and Google’s UNITY be a hedge against WCIT-12?

Are large content providers like Google and Facebook hedging their bets against the World conference on International Telecommunication’s leaked “Temporary Document 62”?

This Russian initiative calls for treating the internet traffic the same way as telephone traffic. It would be ‘metered along national boundaries’ and billed to the originator of traffic. (Sender pays tariff method). According to Winthrop Yap Yu of ISOC-PH, “WCIT provides the best opportunity in decades for them to make a renewed push for this, with *some* hope of success.”

If this proposal is passed, large content originators like Google and Facebook would then be highly taxed. And so, with Google and Facebook deploying their own Asia pacific internet infrastructure, this ‘tax’ could conceivably be avoided. Other companies like Yahoo, Amazon, eBay and a host of other larger content providers could suddenly see their business models come under attack by this ITU (International Telecommunication Union) proposal.

Winter is coming to the consortium wars:

The rival fiber networks make it evident that Asia is becoming increasingly important to both Google and Facebook. The coming battle won’t be fought by just these two companies alone. Their strategic investments also uncovers the various allegiances of telcos in each of the countries where they connect their fiber to. Google and Facebook each have allies in each country that also are natural competitors of each other.

We see the consortiums pitting in-country telcos against each other. In Japan, its NTT vs KDDi, in Singapore it’s Singtel vs Starhub and PLDT vs Globe in the Philippines. Whoever wins this consortium war, it is shaping up to benefit the end user as internet and mobile bandwidth becomes cheaper, faster and better as a result of the related expansion in high speed fiber capacity.

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