1 00:00:02,520 --> 00:00:07,040 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:19,079 --> 00:00:21,759 Speaker 2: This is Wall Street Week. I'm David Weston, bringing you 3 00:00:21,880 --> 00:00:25,400 Speaker 2: stories of capitalism. This week we travel to the depths 4 00:00:25,400 --> 00:00:28,280 Speaker 2: of the world's oceans to explore the world of undersea 5 00:00:28,360 --> 00:00:31,960 Speaker 2: cables carrying ninety nine percent of the world's communications and 6 00:00:32,240 --> 00:00:35,280 Speaker 2: where there may be investment opportunities to address the ever 7 00:00:35,440 --> 00:00:39,240 Speaker 2: increasing demand. And in the wake of the Trump administration's 8 00:00:39,280 --> 00:00:42,760 Speaker 2: telling Harvard it could no longer have international students, we 9 00:00:42,800 --> 00:00:45,680 Speaker 2: look at the costs and benefits of the government going 10 00:00:45,720 --> 00:00:49,320 Speaker 2: to war with its universities. But we start with the 11 00:00:49,360 --> 00:00:53,080 Speaker 2: continuing focus on the nation's air traffic control systems. With 12 00:00:53,159 --> 00:00:56,880 Speaker 2: the Trump administration committing to fixing it. What does fixing 13 00:00:56,920 --> 00:01:00,880 Speaker 2: it mean? How long will it take? A safe in 14 00:01:00,920 --> 00:01:02,000 Speaker 2: the meantime. 15 00:01:06,800 --> 00:01:10,000 Speaker 3: There's always a challenge that has to come with whatever 16 00:01:10,080 --> 00:01:12,560 Speaker 3: system they choose to do. But you're right in saying 17 00:01:13,000 --> 00:01:15,800 Speaker 3: the FA's air traffic control system is by far the busiest, 18 00:01:16,200 --> 00:01:18,640 Speaker 3: most complex, but at the same time the safest in 19 00:01:18,680 --> 00:01:21,960 Speaker 3: the world. So as we approach this, it's got to 20 00:01:22,000 --> 00:01:25,920 Speaker 3: be a unified approach, a collaborative approach with support of 21 00:01:26,160 --> 00:01:27,160 Speaker 3: all the stakeholders. 22 00:01:27,240 --> 00:01:28,600 Speaker 4: Could just put vector. 23 00:01:28,400 --> 00:01:31,479 Speaker 2: Out Mike McCormick went to teach air traffic management at 24 00:01:31,480 --> 00:01:35,840 Speaker 2: every Riddle Aeronautical University after a career at the FAA 25 00:01:35,880 --> 00:01:39,440 Speaker 2: as a control tower operator. He says that addressing the 26 00:01:39,480 --> 00:01:42,600 Speaker 2: outages and making the necessary changes are going to take 27 00:01:42,720 --> 00:01:44,160 Speaker 2: longer than we would like. 28 00:01:44,720 --> 00:01:48,840 Speaker 3: It's like changing to tire on a bus while the 29 00:01:48,880 --> 00:01:51,560 Speaker 3: bus is rolling down the road. You can't shut down 30 00:01:51,640 --> 00:01:55,240 Speaker 3: the air traffic control system to upgrade it or to 31 00:01:55,320 --> 00:01:57,840 Speaker 3: fix it. You need to be able to keep the 32 00:01:57,880 --> 00:02:03,280 Speaker 3: system up and running while you deploy new technology and 33 00:02:03,360 --> 00:02:10,560 Speaker 3: you upgrade old equipment. Fixing the FAA's air traffic control 34 00:02:10,600 --> 00:02:17,360 Speaker 3: system requires a very structured, very formalized approach to what 35 00:02:17,840 --> 00:02:20,040 Speaker 3: is going to be done, When is it going to 36 00:02:20,080 --> 00:02:22,519 Speaker 3: be done, how is it going to be integrated into 37 00:02:22,639 --> 00:02:25,400 Speaker 3: the current system, and then how is it going to 38 00:02:25,440 --> 00:02:28,480 Speaker 3: be waterfalled or to the rest of the air traffic 39 00:02:28,520 --> 00:02:32,320 Speaker 3: control facilities across the country. So it's not going to 40 00:02:32,360 --> 00:02:35,600 Speaker 3: be an overnight and it's not going to be simple. 41 00:02:36,800 --> 00:02:39,960 Speaker 2: We hear various stories about the system now using floppy 42 00:02:40,000 --> 00:02:43,360 Speaker 2: disks and using copper wires and things. At the same time, 43 00:02:43,400 --> 00:02:47,840 Speaker 2: I also understand there's been some modernization going on over time. 44 00:02:48,440 --> 00:02:51,520 Speaker 2: Are we going in the right direction right now or 45 00:02:51,600 --> 00:02:52,840 Speaker 2: do we need to change direction? 46 00:02:53,800 --> 00:02:57,480 Speaker 3: Absolutely, the Federal evased miministration is going in the right direction. 47 00:02:58,160 --> 00:03:02,080 Speaker 3: They have been engaged in a multi tie decade improvement 48 00:03:02,120 --> 00:03:06,120 Speaker 3: program of the air traffic control system and they have 49 00:03:06,639 --> 00:03:11,360 Speaker 3: updated all the controller facing technology on the displays for 50 00:03:11,400 --> 00:03:14,360 Speaker 3: the controllers to state of the art to be able 51 00:03:14,360 --> 00:03:17,920 Speaker 3: to handle not just today's air traffic, but tomorrow's air traffic. 52 00:03:18,919 --> 00:03:22,240 Speaker 3: What needs to happen now is to support systems. A 53 00:03:22,280 --> 00:03:27,480 Speaker 3: lot of the backroom equipment that supports the larger system 54 00:03:27,960 --> 00:03:31,320 Speaker 3: has a definite need for an upgrade, and that's where 55 00:03:31,320 --> 00:03:35,360 Speaker 3: you hear things like still using floppy disks, still using 56 00:03:35,440 --> 00:03:39,720 Speaker 3: CDs because that equipment over time has not been able 57 00:03:39,760 --> 00:03:43,640 Speaker 3: to be upgraded due to lack of funding. So, with 58 00:03:43,760 --> 00:03:46,800 Speaker 3: improvement to the system a critical component of it, there 59 00:03:46,840 --> 00:03:51,600 Speaker 3: has to be reliable multi year funding available in order 60 00:03:51,640 --> 00:03:55,520 Speaker 3: to strategically plan and implement any improvement to the air 61 00:03:55,520 --> 00:03:56,480 Speaker 3: traffic control system. 62 00:03:57,240 --> 00:04:01,040 Speaker 2: Reliable multi year funding you talk about. That's one of 63 00:04:01,080 --> 00:04:04,840 Speaker 2: the issues that we've heard about. Congress doesn't necessarily do 64 00:04:05,000 --> 00:04:07,760 Speaker 2: things in a regular way over a long period of time. 65 00:04:08,320 --> 00:04:11,320 Speaker 2: Is that a fundamental problem the way we funded. 66 00:04:12,040 --> 00:04:16,280 Speaker 3: The Federal Evation Administration is generally funded on an annual basis. 67 00:04:16,600 --> 00:04:19,359 Speaker 3: They have an operations budget, then they have a facility's 68 00:04:19,400 --> 00:04:23,080 Speaker 3: equipment budget, and that budget is generally only good for 69 00:04:23,200 --> 00:04:27,279 Speaker 3: one fiscal year, so from October first to September thirtieth. 70 00:04:28,080 --> 00:04:30,159 Speaker 3: After that the money disappears. 71 00:04:32,960 --> 00:04:35,840 Speaker 2: The need to reform air traffic control is becoming more 72 00:04:36,000 --> 00:04:39,440 Speaker 2: urgent as outages in the system and the resulting delays 73 00:04:39,520 --> 00:04:43,599 Speaker 2: become more frequent. The government agency responsible for reporting on 74 00:04:43,680 --> 00:04:47,120 Speaker 2: government programs and policies has taken a hard look at 75 00:04:47,120 --> 00:04:50,200 Speaker 2: the existing air traffic control system and found it to 76 00:04:50,240 --> 00:04:51,840 Speaker 2: be unsustainable. 77 00:04:52,279 --> 00:04:55,279 Speaker 5: I FADE did this risk assessment to understand of the 78 00:04:55,360 --> 00:04:58,880 Speaker 5: existing systems, which ones are unsustainable, which ones might be 79 00:04:58,880 --> 00:05:04,279 Speaker 5: potentially unsustainab and need investments to modernize them. Many of 80 00:05:04,279 --> 00:05:07,159 Speaker 5: these systems are aging in face long standing challenges. 81 00:05:07,720 --> 00:05:11,120 Speaker 2: Heather Kraus is the managing director of Physical Infrastructure at 82 00:05:11,160 --> 00:05:14,440 Speaker 2: the GAO, which produced a report on the overall state 83 00:05:14,520 --> 00:05:16,840 Speaker 2: of the air traffic control system in the United States 84 00:05:17,800 --> 00:05:21,320 Speaker 2: in March. She testified before Congress about its findings. 85 00:05:22,240 --> 00:05:25,680 Speaker 5: So around seventeen, we found to be somewhat concerning in 86 00:05:25,760 --> 00:05:27,960 Speaker 5: terms of the timelines that they have as well as 87 00:05:28,320 --> 00:05:31,040 Speaker 5: four of those systems not having baselines, so not knowing 88 00:05:31,080 --> 00:05:35,080 Speaker 5: when those systems will be delivered, so important that FA 89 00:05:35,160 --> 00:05:38,680 Speaker 5: focuses on what are the most critical systems? How are 90 00:05:38,680 --> 00:05:41,640 Speaker 5: they going to mitigate risks in the meantime as they 91 00:05:41,800 --> 00:05:45,560 Speaker 5: are working through the modernization efforts and then delivering on 92 00:05:45,640 --> 00:05:47,200 Speaker 5: those modernization plans. 93 00:05:48,400 --> 00:05:51,440 Speaker 2: Modernization is part of the problem, but far from the 94 00:05:51,480 --> 00:05:54,599 Speaker 2: only part. What about the controllers who run the system? 95 00:05:55,040 --> 00:05:58,720 Speaker 2: There's general consensus about their being outstanding professionals. 96 00:06:00,040 --> 00:06:04,560 Speaker 3: States Federal Aviation Administration is short over three thousand air 97 00:06:04,560 --> 00:06:08,839 Speaker 3: traffic controllers across the entire system, and that came about 98 00:06:09,640 --> 00:06:13,479 Speaker 3: not just overnight, but it took decades to reach that 99 00:06:14,240 --> 00:06:17,960 Speaker 3: level of shortfall. And essentially what happens whenever there is 100 00:06:18,000 --> 00:06:21,159 Speaker 3: a government shut down, the FA cannot hire or train 101 00:06:21,240 --> 00:06:25,760 Speaker 3: air traffic controllers. This was disacerbated by the pandemic when 102 00:06:25,839 --> 00:06:28,680 Speaker 3: over year the FA could not hire a single controller 103 00:06:29,279 --> 00:06:32,520 Speaker 3: and could not train new controllers. That has led to 104 00:06:32,560 --> 00:06:36,080 Speaker 3: where the system is today with over three thousand controllers 105 00:06:36,080 --> 00:06:38,960 Speaker 3: short across the country. The only way out of that 106 00:06:39,480 --> 00:06:42,640 Speaker 3: is to hire and train new controllers and every Reddal 107 00:06:42,680 --> 00:06:45,839 Speaker 3: Aeronouk University is proud to be a part of that initiative. 108 00:06:46,160 --> 00:06:49,599 Speaker 3: As we enter into agreement with the FAA, we are 109 00:06:49,800 --> 00:06:54,760 Speaker 3: authorized and certified by the FAA to test our students 110 00:06:54,880 --> 00:06:58,400 Speaker 3: to the same level that the FA Academy does, enabling 111 00:06:58,440 --> 00:07:01,840 Speaker 3: them to be hired directly to fair traffic control facilities 112 00:07:02,040 --> 00:07:05,400 Speaker 3: upon graduation. Previously, it would take one to two years 113 00:07:05,440 --> 00:07:09,000 Speaker 3: post graduation for one of our students entered the controller workforce. 114 00:07:09,800 --> 00:07:11,480 Speaker 3: Now can happen within days. 115 00:07:15,000 --> 00:07:17,240 Speaker 1: By the time that the air traffic controllers can get 116 00:07:17,280 --> 00:07:20,040 Speaker 1: a new piece of equipment, it's about seven or eight 117 00:07:20,120 --> 00:07:22,360 Speaker 1: years old. It's not as modern as there should be. 118 00:07:22,720 --> 00:07:26,160 Speaker 1: It took forever for the air traffic control system to 119 00:07:26,200 --> 00:07:27,680 Speaker 1: have a GPS system. 120 00:07:27,920 --> 00:07:32,000 Speaker 2: Elaine Chow was the Transportation Secretary under President Trump during 121 00:07:32,040 --> 00:07:33,480 Speaker 2: his first term. 122 00:07:33,720 --> 00:07:35,640 Speaker 1: It's a tribute to the men and women of the 123 00:07:35,640 --> 00:07:39,000 Speaker 1: air traffic control that they can keep the system kind 124 00:07:39,040 --> 00:07:43,560 Speaker 1: of safe and maintained with their expertise. 125 00:07:44,360 --> 00:07:47,800 Speaker 2: Secretary Chow agrees that the path to overhauling air traffic 126 00:07:47,800 --> 00:07:50,720 Speaker 2: control in the United States is long, but the problem 127 00:07:50,800 --> 00:07:53,360 Speaker 2: may be in the very structure of the system. 128 00:07:53,760 --> 00:07:56,680 Speaker 1: In twenty seventeen, there was an effort under the first 129 00:07:56,720 --> 00:08:02,920 Speaker 1: Trump administration to reorganize the structure of the air traffic 130 00:08:02,960 --> 00:08:06,120 Speaker 1: control and basically it would take the air traffic control. 131 00:08:06,680 --> 00:08:09,360 Speaker 1: It's not privatizing yet because it's being put into a 132 00:08:09,360 --> 00:08:15,240 Speaker 1: nonprofit organization, but rather I call it liberating the FAA 133 00:08:15,280 --> 00:08:19,040 Speaker 1: and the air traffic control. Basically liberating the air traffic 134 00:08:19,080 --> 00:08:24,320 Speaker 1: control from FA and even more succinctly, the federal government, 135 00:08:24,840 --> 00:08:29,240 Speaker 1: so that air traffic Control, like many others structured like 136 00:08:29,280 --> 00:08:33,000 Speaker 1: this around the world, would be their own entity. They 137 00:08:33,040 --> 00:08:36,760 Speaker 1: would have their own nonprofit status, they would have their 138 00:08:36,760 --> 00:08:41,000 Speaker 1: own board of directors, but more importantly, they would use 139 00:08:41,160 --> 00:08:45,000 Speaker 1: their own funding of resources and be able to use 140 00:08:45,040 --> 00:08:46,760 Speaker 1: it for long term planning. 141 00:08:47,760 --> 00:08:50,280 Speaker 2: As you look around the world, has anyone done this? 142 00:08:50,360 --> 00:08:52,400 Speaker 2: Can we go to school in any other country in 143 00:08:52,440 --> 00:08:54,240 Speaker 2: the way they've handled this well. 144 00:08:54,280 --> 00:08:58,679 Speaker 1: Canada is a primary example, Great Britain, Australia. There are 145 00:08:58,679 --> 00:09:02,840 Speaker 1: many other countries who have taken air traffic control out 146 00:09:02,880 --> 00:09:07,080 Speaker 1: of the government process and put it separately in its 147 00:09:07,120 --> 00:09:12,520 Speaker 1: own nonprofit organization. And by doing that it allows this 148 00:09:12,640 --> 00:09:17,800 Speaker 1: nonprofit air traffic control system to plan ahead have control 149 00:09:17,840 --> 00:09:21,839 Speaker 1: over one hundred percent of its budget and be able 150 00:09:21,880 --> 00:09:25,880 Speaker 1: to purchase equipment at a very timely rate and very 151 00:09:25,920 --> 00:09:27,000 Speaker 1: efficiently as well. 152 00:09:27,520 --> 00:09:30,840 Speaker 3: There's been discussion for over twenty years now on what 153 00:09:30,920 --> 00:09:34,120 Speaker 3: to do about the United States air traffic control system. 154 00:09:34,720 --> 00:09:39,640 Speaker 3: The US is the only Western nation that still has 155 00:09:39,880 --> 00:09:45,360 Speaker 3: air traffic control system fully operated by the central government. 156 00:09:45,720 --> 00:09:47,959 Speaker 3: All the other Western nations, including our neighbors to the 157 00:09:48,040 --> 00:09:51,560 Speaker 3: north and south and across the Pacific and Atlantic, have 158 00:09:51,679 --> 00:09:56,560 Speaker 3: transitioned to either a privatized or corporatized air traffic control system. 159 00:09:56,920 --> 00:09:59,400 Speaker 3: In general, that has worked out very well for those 160 00:10:00,280 --> 00:10:01,839 Speaker 3: They ran into a bit of a problem during the 161 00:10:01,920 --> 00:10:05,800 Speaker 3: pandemic because it's based upon user fees and that is 162 00:10:05,880 --> 00:10:08,920 Speaker 3: apportion generally of a ticket tax that would fund it. 163 00:10:09,120 --> 00:10:11,880 Speaker 3: The FA's air traffic control system is by far the busiest, 164 00:10:12,320 --> 00:10:14,720 Speaker 3: most complex, but at the same time the safest in 165 00:10:14,800 --> 00:10:18,360 Speaker 3: the world. So as we approach this, it's got to 166 00:10:18,400 --> 00:10:22,360 Speaker 3: be a unified approach, a collaborative approach, with support of 167 00:10:22,600 --> 00:10:25,800 Speaker 3: all the stakeholders. So you have to have support a passengers, 168 00:10:26,080 --> 00:10:31,560 Speaker 3: support of aircraft manufacturers, supporting airlines, support a generally vasue community, 169 00:10:31,840 --> 00:10:35,040 Speaker 3: and of course support of the whole government. In order 170 00:10:35,040 --> 00:10:37,840 Speaker 3: to make a decision on which we had to go. Unfortunately, 171 00:10:37,840 --> 00:10:39,640 Speaker 3: to this point that has not. 172 00:10:39,640 --> 00:10:46,800 Speaker 2: Existed coming up connecting the world from Rio to Tuvalu. 173 00:10:56,200 --> 00:10:59,720 Speaker 2: This is a story about connection, no matter what the distance, 174 00:11:00,000 --> 00:11:03,319 Speaker 2: no matter what the conditions, whether it's air traffic controllers 175 00:11:03,360 --> 00:11:06,319 Speaker 2: connecting with airplanes landing at Newark Airport. 176 00:11:06,760 --> 00:11:08,000 Speaker 3: We lost our radar, or. 177 00:11:08,000 --> 00:11:11,440 Speaker 2: President Trump connecting with British Prime Minister Cure Starmer for 178 00:11:11,520 --> 00:11:13,800 Speaker 2: a joint transatlantic news conference. 179 00:11:14,440 --> 00:11:16,160 Speaker 4: This looks like the kind of a hookup that's not 180 00:11:16,200 --> 00:11:19,240 Speaker 4: going to be causing any problems, and your voice comes 181 00:11:19,240 --> 00:11:22,280 Speaker 4: through beautifully gear. So I just want. 182 00:11:22,120 --> 00:11:22,800 Speaker 6: To do it. 183 00:11:31,120 --> 00:11:34,080 Speaker 2: When it comes to connecting, there is no substitute for 184 00:11:34,280 --> 00:11:40,360 Speaker 2: undersea cables. Thousands of satellites may orbit the Earth, but 185 00:11:40,480 --> 00:11:43,760 Speaker 2: more than ninety nine percent of global Internet traffic still 186 00:11:43,800 --> 00:11:47,440 Speaker 2: flows through fiber optic cables laying on the ocean floor. 187 00:11:48,800 --> 00:11:52,680 Speaker 2: A single high capacity cable installed today can transmit half 188 00:11:52,720 --> 00:11:56,800 Speaker 2: a peti bit over a million home high speed internet connections. 189 00:11:57,280 --> 00:12:00,839 Speaker 7: Private networks for the largest of the companies, rely upon 190 00:12:01,080 --> 00:12:05,680 Speaker 7: subse cables for their logistical planning, their transport, their just 191 00:12:05,800 --> 00:12:15,520 Speaker 7: in time deliveries, logistics, finance, health, education, science, technology, sharing, 192 00:12:16,000 --> 00:12:20,120 Speaker 7: It all goes over subsea cables, the loss of which 193 00:12:20,720 --> 00:12:24,960 Speaker 7: would mean life as we know it would be gone. 194 00:12:26,679 --> 00:12:29,640 Speaker 8: If you think about that, you will start to understand 195 00:12:29,679 --> 00:12:33,520 Speaker 8: how incredibly important undersea cables are, both in terms of 196 00:12:33,559 --> 00:12:37,640 Speaker 8: our connectivity, our ability to communicate across the world, our 197 00:12:37,679 --> 00:12:41,760 Speaker 8: ability to run digital technology, but also essentially the national 198 00:12:41,800 --> 00:12:42,680 Speaker 8: security risk. 199 00:12:43,640 --> 00:12:47,600 Speaker 2: Some one point three million kilometers of those cables snak 200 00:12:47,640 --> 00:12:52,200 Speaker 2: across the world's ocean floor. Eduardo Matteo is head of 201 00:12:52,200 --> 00:12:55,080 Speaker 2: strategy for NEC's Submarine division. 202 00:12:55,640 --> 00:13:00,200 Speaker 9: The basic anatomy of subse cables are very long, these 203 00:13:00,200 --> 00:13:04,200 Speaker 9: stunts pipes that have optical fibers inside a certain amount 204 00:13:04,200 --> 00:13:09,280 Speaker 9: of optical fibers and every certain amount of kilometers ninety 205 00:13:09,400 --> 00:13:13,360 Speaker 9: one hundred kilometers, these signals that travel along the fibers 206 00:13:13,400 --> 00:13:18,080 Speaker 9: need to be re energized, amplified, energized from the sea 207 00:13:18,360 --> 00:13:21,760 Speaker 9: from the landing stations. So it's a very unique network. 208 00:13:21,960 --> 00:13:24,400 Speaker 9: That amplifier that sits in the middle of the ocean 209 00:13:24,440 --> 00:13:27,920 Speaker 9: receives power from thousands of kilometers away. 210 00:13:29,440 --> 00:13:33,120 Speaker 2: As important as undersea cables are to all global communications, 211 00:13:33,559 --> 00:13:36,440 Speaker 2: most of us don't hear about them until there's an interruption, 212 00:13:36,960 --> 00:13:40,560 Speaker 2: which happens about two hundred times a year, sometimes because 213 00:13:40,600 --> 00:13:45,120 Speaker 2: of wear and tear, but sometimes in suspicious circumstances. That's 214 00:13:45,120 --> 00:13:50,800 Speaker 2: why experts like NJFX CEO Gill Sentilles and Norwegian infrastructure 215 00:13:50,800 --> 00:13:54,640 Speaker 2: builder Petter Narbo have a system to reroute traffic and 216 00:13:54,760 --> 00:13:55,760 Speaker 2: keep the data moving. 217 00:13:57,200 --> 00:13:59,800 Speaker 10: So while we get to shallow water, we bury it on. 218 00:13:59,880 --> 00:14:02,560 Speaker 10: The need the sea bed to protect the cable so 219 00:14:02,600 --> 00:14:05,959 Speaker 10: it's not hit by some troller vessel or an anchor 220 00:14:06,520 --> 00:14:09,600 Speaker 10: by a chance. But you can wonder, like northern parts 221 00:14:09,600 --> 00:14:13,120 Speaker 10: of Norway, in Slowbart we had an incident like two 222 00:14:13,160 --> 00:14:16,880 Speaker 10: and a half years ago where one vessel had traveled 223 00:14:16,880 --> 00:14:20,680 Speaker 10: across the cable one hundred and thirty times and then 224 00:14:20,680 --> 00:14:23,520 Speaker 10: it was able to ram the cable and make. 225 00:14:23,320 --> 00:14:25,280 Speaker 11: A power outage on the cables. 226 00:14:25,480 --> 00:14:28,360 Speaker 10: And you can question whether that was intentional or not, 227 00:14:28,560 --> 00:14:32,640 Speaker 10: but it was a Russian vessel. If there's an outage, 228 00:14:32,800 --> 00:14:35,040 Speaker 10: that's why we come to places like the New Jersey 229 00:14:35,040 --> 00:14:38,920 Speaker 10: Fiber Saints that interconnects with you know, six or seven 230 00:14:38,960 --> 00:14:41,680 Speaker 10: of these different Subsey cables, so. 231 00:14:41,720 --> 00:14:45,120 Speaker 11: Our facility is prepared to support subse cables and these 232 00:14:45,160 --> 00:14:48,400 Speaker 11: cables need redundancy on land as well. It's no longer 233 00:14:48,440 --> 00:14:51,240 Speaker 11: possible at a single point of failure. We've got twenty 234 00:14:51,360 --> 00:14:55,280 Speaker 11: six terrestrial cables that lead the NJFX in four directions 235 00:14:55,560 --> 00:15:00,840 Speaker 11: aerial underground, which allow diversity for these subse cables have options. 236 00:15:01,120 --> 00:15:04,080 Speaker 11: Something happens on land, whether it's a highway or railroad, 237 00:15:04,200 --> 00:15:07,040 Speaker 11: we could reavert that traffic in a different bath. 238 00:15:08,760 --> 00:15:11,920 Speaker 2: The first undersea cable was laid in the eighteen fifties, 239 00:15:12,200 --> 00:15:16,600 Speaker 2: stretching from Ireland to Newfoundland, with Queen Victoria christening it 240 00:15:16,680 --> 00:15:21,160 Speaker 2: by sending a telegram to President Buchanan. In the twentieth century, 241 00:15:21,280 --> 00:15:25,400 Speaker 2: telegrams gave way to telephone calls, and then the US 242 00:15:25,480 --> 00:15:29,280 Speaker 2: deregulated the telephone companies just as the Internet arrived on 243 00:15:29,320 --> 00:15:32,920 Speaker 2: the scene, opening up the market to new players and 244 00:15:33,000 --> 00:15:36,920 Speaker 2: fueling a boom in competitive investment in submarine cables. 245 00:15:37,400 --> 00:15:39,800 Speaker 12: We have always been focused on being the best in 246 00:15:39,840 --> 00:15:42,040 Speaker 12: the world at moving optical bits. 247 00:15:42,360 --> 00:15:47,080 Speaker 2: Gary Smith runs CNM, whose technology powers the modern global Internet, 248 00:15:47,440 --> 00:15:51,600 Speaker 2: providing the networking systems and software that increase each cable's 249 00:15:51,600 --> 00:15:54,800 Speaker 2: capacity even as more and more are installed. 250 00:15:55,200 --> 00:15:59,440 Speaker 12: Basically, down each end of a piece of fiber, you 251 00:15:59,600 --> 00:16:03,600 Speaker 12: put different colors of light and pull them out at 252 00:16:03,600 --> 00:16:07,560 Speaker 12: the ends into you know, virtual fibers, and the first 253 00:16:07,560 --> 00:16:10,200 Speaker 12: technology we had in this space, we think we can 254 00:16:10,280 --> 00:16:14,240 Speaker 12: make you know, four fibers out of the single fiber, 255 00:16:15,040 --> 00:16:18,160 Speaker 12: and they said, that's fantastic. We don't think we'll ever 256 00:16:18,240 --> 00:16:20,480 Speaker 12: need four. By the time we got to deploy it, 257 00:16:20,480 --> 00:16:22,960 Speaker 12: it was eight and they said, we're never going to 258 00:16:23,080 --> 00:16:26,280 Speaker 12: use eight fibers. And now we're putting literally, you know, 259 00:16:26,520 --> 00:16:29,640 Speaker 12: thousands of virtual fibers down a single fiber. 260 00:16:30,160 --> 00:16:32,560 Speaker 2: In the boom years of the nineteen nineties and early 261 00:16:32,600 --> 00:16:37,400 Speaker 2: two thousands, building transoceanic cables seemed like a great business 262 00:16:37,440 --> 00:16:37,920 Speaker 2: to be in. 263 00:16:38,320 --> 00:16:40,160 Speaker 13: I was like, where do we build the next one? 264 00:16:40,400 --> 00:16:42,840 Speaker 13: How do we leverage the debt and equity markets to 265 00:16:42,840 --> 00:16:46,240 Speaker 13: get the capital? And then this deploy it very very quickly. 266 00:16:46,360 --> 00:16:49,800 Speaker 2: Mike Constable was a global crossing during that time, a 267 00:16:49,840 --> 00:16:53,600 Speaker 2: company that pre sold capacity to telecom carriers before cables 268 00:16:53,680 --> 00:16:57,320 Speaker 2: even hit the water. But then the music stopped, and. 269 00:16:57,320 --> 00:17:01,760 Speaker 13: At that stage, the all the sculation about how much 270 00:17:01,840 --> 00:17:05,200 Speaker 13: data the world was going to need was not being 271 00:17:05,320 --> 00:17:12,240 Speaker 13: accurately analyzed and forecast. So suddenly the debt levels were 272 00:17:12,320 --> 00:17:15,320 Speaker 13: super high and they couldn't pay off that debt. So 273 00:17:15,440 --> 00:17:19,720 Speaker 13: ultimately there was a collapse. Investment pretty much stopped. Around 274 00:17:19,760 --> 00:17:24,160 Speaker 13: two thousand and two, investment in subse cables effectively stopped, 275 00:17:24,480 --> 00:17:28,440 Speaker 13: and it took a long time to see investment come back. 276 00:17:28,520 --> 00:17:32,040 Speaker 12: Everybody built so much capacity with this kind of technology 277 00:17:32,440 --> 00:17:35,640 Speaker 12: because all of a sudden we could scale up the fibers. 278 00:17:36,000 --> 00:17:38,560 Speaker 12: The challenge was no one knew what to do with 279 00:17:38,600 --> 00:17:41,400 Speaker 12: that capacity, right, and no one would pay for it. 280 00:17:41,640 --> 00:17:44,840 Speaker 2: For years, nothing new was built. But the twenty first 281 00:17:44,880 --> 00:17:48,959 Speaker 2: century brought new demands, this time for financial transactions measured 282 00:17:49,200 --> 00:17:53,560 Speaker 2: not in milliseconds but in microseconds. Michael Lewis captured it 283 00:17:53,640 --> 00:17:58,760 Speaker 2: in Flashboys a World War. Speed meant profit. Joe hilt Now, 284 00:17:58,800 --> 00:18:01,840 Speaker 2: with a Nova Financial new Works, led the commercial team 285 00:18:01,920 --> 00:18:06,720 Speaker 2: behind a bold new cable called the Hibernia Express. You 286 00:18:06,760 --> 00:18:09,920 Speaker 2: were particularly involved, as you say, in the financial part 287 00:18:09,920 --> 00:18:12,840 Speaker 2: of the business, and obviously people really want to be 288 00:18:12,880 --> 00:18:14,240 Speaker 2: able to trade fast. 289 00:18:15,040 --> 00:18:16,320 Speaker 14: Yeah, And I think we saw that there was a 290 00:18:16,359 --> 00:18:18,159 Speaker 14: cable system that was built between New Jersey and the 291 00:18:18,240 --> 00:18:22,600 Speaker 14: Chicago Mercantyle Exchange that was built as a straight line, right, 292 00:18:22,640 --> 00:18:25,040 Speaker 14: and we said, wow, we're a cable system provided in 293 00:18:25,040 --> 00:18:28,240 Speaker 14: the Atlantic. Somebody must need between the two financial pillows 294 00:18:28,240 --> 00:18:30,760 Speaker 14: of the world in New York and London. Twenty eleven, 295 00:18:31,280 --> 00:18:35,440 Speaker 14: we'd started begun signing clients that would become financial customers 296 00:18:35,440 --> 00:18:37,639 Speaker 14: on the system, and when we did that, we started 297 00:18:37,640 --> 00:18:39,080 Speaker 14: to do subse surveys. 298 00:18:39,680 --> 00:18:44,040 Speaker 2: Wall Street helped finance it alongside Chinese partner Huawei, but 299 00:18:44,200 --> 00:18:47,240 Speaker 2: that set off alarm bells in Washington, and as the 300 00:18:47,240 --> 00:18:51,120 Speaker 2: pressure mounted, the message was clear the project wouldn't get 301 00:18:51,160 --> 00:18:54,040 Speaker 2: approved if it relied on Chinese technology. 302 00:18:54,560 --> 00:19:00,239 Speaker 14: We originally had started out with Huawei. Global Marine had 303 00:19:00,280 --> 00:19:03,439 Speaker 14: decided to move away from wahweih Global Marine about mid 304 00:19:03,520 --> 00:19:07,080 Speaker 14: project right, and most of that was based on the 305 00:19:07,200 --> 00:19:12,280 Speaker 14: United States and feelings towards companies like Huawei and H 306 00:19:12,359 --> 00:19:12,600 Speaker 14: three C. 307 00:19:12,800 --> 00:19:16,520 Speaker 2: At that time, Huawei was out along with its technology, 308 00:19:17,000 --> 00:19:19,920 Speaker 2: and in came te SubCom and Sienna. 309 00:19:20,880 --> 00:19:23,200 Speaker 14: So we did need to make a change in our equipment, 310 00:19:23,600 --> 00:19:26,360 Speaker 14: and we chose to have a bigger relationship with Siena, 311 00:19:26,480 --> 00:19:28,800 Speaker 14: you know, so much like we laid the cable systems 312 00:19:28,840 --> 00:19:32,159 Speaker 14: with t SubCom. We decided to make Sienna at that 313 00:19:32,200 --> 00:19:36,000 Speaker 14: point in time our the facto standard for wavelength services. 314 00:19:36,200 --> 00:19:39,640 Speaker 12: Frankly, the whole Huawei piece was really a wake up 315 00:19:39,680 --> 00:19:42,800 Speaker 12: call for the West you know, in general around the 316 00:19:42,840 --> 00:19:48,080 Speaker 12: criticality of this infrastructure. By deploying this infrastructure, letting someone 317 00:19:48,200 --> 00:19:52,359 Speaker 12: you know else have that infrastructure was you know, was 318 00:19:52,400 --> 00:19:53,800 Speaker 12: a real challenge. 319 00:19:53,920 --> 00:19:58,160 Speaker 2: Unlike others, Sienna hadn't partnered with Chinese firms for years. 320 00:19:58,320 --> 00:20:01,760 Speaker 2: That was seen as a mistake until it wasn't. 321 00:20:01,880 --> 00:20:04,560 Speaker 12: And we decided really to be sort of in some 322 00:20:04,600 --> 00:20:07,800 Speaker 12: ways the sort of our main competitor around the world 323 00:20:07,880 --> 00:20:11,359 Speaker 12: was Huawei, so we decided to be, you know, the 324 00:20:11,400 --> 00:20:14,800 Speaker 12: antithesis of that. We had no manufacturing in China. We 325 00:20:14,800 --> 00:20:16,919 Speaker 12: were very unusual in that regard, but that was a 326 00:20:16,920 --> 00:20:19,360 Speaker 12: strategic decision on our part. Now you look at the 327 00:20:19,400 --> 00:20:23,040 Speaker 12: marketplace now and you see a very bifurcated market between 328 00:20:23,760 --> 00:20:26,879 Speaker 12: those that utilize Huahweh and those that don't want to, 329 00:20:27,080 --> 00:20:31,120 Speaker 12: which is really a proxy for geopolitical divide that you're 330 00:20:31,119 --> 00:20:34,720 Speaker 12: seeing in the world. Governments are very conscious of it now. 331 00:20:35,280 --> 00:20:40,000 Speaker 12: It's not just left to normal commercial decision making, for sure. 332 00:20:40,480 --> 00:20:43,800 Speaker 2: Mike Constable was tapped to lead Huawei Marine as the 333 00:20:43,880 --> 00:20:47,360 Speaker 2: Chinese giants sought to push past US resistance. But as 334 00:20:47,400 --> 00:20:52,640 Speaker 2: geopolitical tensions continued to rise, the US stood firm. 335 00:20:53,080 --> 00:20:56,800 Speaker 13: So that was really quite damaging at that time. Slowly 336 00:20:57,080 --> 00:21:02,240 Speaker 13: the our access to vietitions to bid on a number 337 00:21:02,280 --> 00:21:05,280 Speaker 13: of projects started to dry up. Way while our marine 338 00:21:05,320 --> 00:21:08,040 Speaker 13: weren't able to build cables into the US, we were 339 00:21:08,040 --> 00:21:10,600 Speaker 13: not able to build cables into Europe and to other 340 00:21:10,720 --> 00:21:13,760 Speaker 13: nations such as Australia. In fact, at the time we 341 00:21:13,960 --> 00:21:16,760 Speaker 13: had won a contract to build a cable from Solomon 342 00:21:16,800 --> 00:21:20,520 Speaker 13: Islands to Australia and that was subsequently terminated. 343 00:21:20,760 --> 00:21:24,960 Speaker 2: The US intervened in several planned Transpacific cables, including the 344 00:21:25,000 --> 00:21:29,640 Speaker 2: Pacific Light Cable Network linking Hong Kong and California. According 345 00:21:29,640 --> 00:21:33,159 Speaker 2: to Jennifer Bacchus, acting head of the State Department's Bureau 346 00:21:33,240 --> 00:21:36,760 Speaker 2: of Cyberspace and Digital Policy, it came down to one 347 00:21:36,800 --> 00:21:38,440 Speaker 2: word trust. 348 00:21:38,880 --> 00:21:41,480 Speaker 8: What started to become apparent to us is that we 349 00:21:41,520 --> 00:21:43,879 Speaker 8: do not see the world in the same way that 350 00:21:44,080 --> 00:21:47,080 Speaker 8: China sees the world, and that ultimately, while we view 351 00:21:47,119 --> 00:21:50,440 Speaker 8: this as a positive way to work together, to bring 352 00:21:50,480 --> 00:21:53,240 Speaker 8: people together, I think the Chinese view it as a 353 00:21:53,280 --> 00:21:57,200 Speaker 8: way to control, surveil and steal, and so as a result, 354 00:21:57,520 --> 00:22:01,280 Speaker 8: I think it's been a gradual realization that we don't 355 00:22:01,280 --> 00:22:03,880 Speaker 8: have the same worldview. We don't share the same values. 356 00:22:03,960 --> 00:22:06,240 Speaker 2: Specific light cable was one that was going to go 357 00:22:06,240 --> 00:22:09,040 Speaker 2: to Hong Kong got shut down. Is that why you 358 00:22:09,200 --> 00:22:11,440 Speaker 2: decide not to allow them to have a land station 359 00:22:11,800 --> 00:22:12,440 Speaker 2: in Hong Kong? 360 00:22:12,760 --> 00:22:15,960 Speaker 8: So on the Pacific like cable, Yes, What it would 361 00:22:15,960 --> 00:22:19,320 Speaker 8: do is if it landed in Hong Kong, the Chinese 362 00:22:19,400 --> 00:22:24,359 Speaker 8: government could very easily access that landing station and both 363 00:22:24,560 --> 00:22:28,080 Speaker 8: take any information they wanted to exfiltratee it, steal it, 364 00:22:28,480 --> 00:22:31,600 Speaker 8: call it what you want. They also could potentially use 365 00:22:31,640 --> 00:22:35,720 Speaker 8: that access to interrupt the data flows, to reroute the 366 00:22:35,800 --> 00:22:40,560 Speaker 8: data flows. There's no way to tear apart espionage from 367 00:22:40,680 --> 00:22:45,560 Speaker 8: intellectual property, theft from essentially having the dagger poised at 368 00:22:45,600 --> 00:22:48,560 Speaker 8: your neck that you're going to cut off somebody's communications network. 369 00:22:49,000 --> 00:22:51,560 Speaker 2: Is there a cost here in protecting so the data 370 00:22:51,600 --> 00:22:55,920 Speaker 2: that you suggest to potentially US businesses competing with their 371 00:22:56,000 --> 00:22:58,679 Speaker 2: Chinese counterparts in third parts of the world. 372 00:22:59,520 --> 00:23:02,240 Speaker 8: What we found in going around the world is that 373 00:23:02,320 --> 00:23:08,080 Speaker 8: there's enthusiasm for trusted connectivity, especially when you're talking about 374 00:23:08,160 --> 00:23:11,480 Speaker 8: subse cables and when you talk about how do you 375 00:23:11,520 --> 00:23:15,560 Speaker 8: attract investment into a country, whether you are a small 376 00:23:15,600 --> 00:23:20,640 Speaker 8: island state or a large country. They want advanced Western technology, 377 00:23:20,840 --> 00:23:24,439 Speaker 8: they want AI, they want data centers, they want hyperscale cloud. 378 00:23:24,680 --> 00:23:27,040 Speaker 8: You look at sort of the share of the market 379 00:23:27,320 --> 00:23:30,600 Speaker 8: that HMN Tech, which is the Huawei company, is had 380 00:23:30,640 --> 00:23:33,879 Speaker 8: worldwide where they were five years ago versus where they 381 00:23:33,880 --> 00:23:38,680 Speaker 8: are today. They're on a downward trajectory as countries, economies, 382 00:23:38,760 --> 00:23:41,920 Speaker 8: and people embrace the idea that they want to have 383 00:23:42,320 --> 00:23:46,720 Speaker 8: sovereignty and control over their information and over their future 384 00:23:46,960 --> 00:23:48,280 Speaker 8: success and prosperity. 385 00:23:50,280 --> 00:23:53,440 Speaker 2: And that's where we turn next to the investment prospects 386 00:23:53,480 --> 00:23:57,159 Speaker 2: for the boom and bust business of undersea cable. Who's 387 00:23:57,200 --> 00:24:00,880 Speaker 2: doing the investing, what are the economics, and what are 388 00:24:00,920 --> 00:24:14,480 Speaker 2: the opportunities. Undersea cables may be ubiquitous, they may be 389 00:24:14,560 --> 00:24:17,520 Speaker 2: something all of us use every day without even knowing 390 00:24:17,560 --> 00:24:21,159 Speaker 2: about it. But are they a good investment and who's 391 00:24:21,240 --> 00:24:26,000 Speaker 2: doing the investing? Enter the hyperscalers, led by Google with 392 00:24:26,119 --> 00:24:28,840 Speaker 2: its investment in the trans specific Unity cable. 393 00:24:29,080 --> 00:24:37,640 Speaker 7: In twenty ten, Google invested in a single fiber pair, 394 00:24:38,280 --> 00:24:42,120 Speaker 7: which we thought initially was going to be enough capacity. 395 00:24:42,680 --> 00:24:46,040 Speaker 7: But the one thing Google and all of the hyperscalers 396 00:24:46,359 --> 00:24:52,160 Speaker 7: always get wrong is forecasting and demand models. Demand has 397 00:24:52,359 --> 00:24:58,840 Speaker 7: always outstripped actual need. So shortly after completing Unity, we 398 00:24:58,960 --> 00:25:04,080 Speaker 7: started on a second transpact cable called Faster, because that's 399 00:25:04,080 --> 00:25:08,680 Speaker 7: what we kept getting told, build it faster, we need 400 00:25:08,720 --> 00:25:10,600 Speaker 7: it now. 401 00:25:11,359 --> 00:25:15,160 Speaker 2: Jane Stowell was the first employee for Google's subse unit 402 00:25:15,400 --> 00:25:18,879 Speaker 2: when the Hyperscaler moved into the business, connecting their data 403 00:25:18,920 --> 00:25:21,119 Speaker 2: centers around the globe. 404 00:25:21,280 --> 00:25:25,360 Speaker 7: There was definitely a rising need with Google driving that need. 405 00:25:26,160 --> 00:25:31,600 Speaker 7: So I had never done Latin American cables before, so 406 00:25:31,640 --> 00:25:35,440 Speaker 7: I turned my attention there and put together a consortium 407 00:25:35,440 --> 00:25:39,439 Speaker 7: to build from the US to Brazil, and then a 408 00:25:39,520 --> 00:25:44,320 Speaker 7: second mini consortium to build from Brazil to Uruguay and 409 00:25:44,400 --> 00:25:48,600 Speaker 7: then onward to Argentina. One of the important things to 410 00:25:48,760 --> 00:25:54,680 Speaker 7: understand about putting together consortium is sometimes it can take 411 00:25:54,720 --> 00:25:57,159 Speaker 7: as long to build a consortium as it does to 412 00:25:57,200 --> 00:25:59,760 Speaker 7: build a cable. If you build it yourself, you can 413 00:25:59,800 --> 00:26:06,720 Speaker 7: move much faster. There are three primary reasons. One is cost, 414 00:26:07,680 --> 00:26:12,240 Speaker 7: the second is speed to market, and the third is 415 00:26:13,040 --> 00:26:20,200 Speaker 7: network architecture technology. Google wanted control all three elements. 416 00:26:20,760 --> 00:26:25,040 Speaker 2: You said that historically it's been very difficult to predict demand, 417 00:26:25,720 --> 00:26:28,520 Speaker 2: that often people are wrong with demand. What is the 418 00:26:28,600 --> 00:26:31,680 Speaker 2: risk today that there's overbuilding going. 419 00:26:31,480 --> 00:26:36,800 Speaker 7: On, I think relatively low because we had been building 420 00:26:36,960 --> 00:26:42,199 Speaker 7: cables for the Internet and for the cloud, for cloud computing. 421 00:26:43,359 --> 00:26:49,359 Speaker 7: The next advent is AI. This is not just about cables. 422 00:26:49,680 --> 00:26:53,639 Speaker 7: This is about cables that are connecting the lifeblood of 423 00:26:53,800 --> 00:26:58,919 Speaker 7: data centers and for artificial intelligence. You need to build 424 00:26:59,480 --> 00:27:04,080 Speaker 7: the the artificial intelligence models first before you can have 425 00:27:04,160 --> 00:27:08,600 Speaker 7: the inference for anything that's useful for you and me. 426 00:27:09,080 --> 00:27:14,520 Speaker 7: So building those models requires mass, mass amounts of data 427 00:27:14,520 --> 00:27:21,680 Speaker 7: transport to key data centers that are modern, energy efficient, 428 00:27:22,080 --> 00:27:30,280 Speaker 7: plentitude of energy and nearby access to subsea cables. So 429 00:27:30,440 --> 00:27:33,920 Speaker 7: you will see a whole new model of data centers 430 00:27:34,400 --> 00:27:39,960 Speaker 7: moving outside of city centers to locations with the large 431 00:27:40,000 --> 00:27:47,000 Speaker 7: amounts of reliable power and ready access to big fat 432 00:27:47,160 --> 00:27:48,840 Speaker 7: types of subsea cables. 433 00:27:49,880 --> 00:27:52,919 Speaker 2: One such fat pipe is the Hafru cable connecting New 434 00:27:53,000 --> 00:27:57,840 Speaker 2: Jersey to Norway's low cost renewable energy. Petter Narbo, executive 435 00:27:57,880 --> 00:28:02,200 Speaker 2: Chairman of Bulk Infrastructure with Google and Meta on the project. 436 00:28:04,040 --> 00:28:08,119 Speaker 10: Norway has about one hundred percent of releuble energy, so 437 00:28:08,320 --> 00:28:10,560 Speaker 10: and we have a surplus of it because we have 438 00:28:11,200 --> 00:28:17,320 Speaker 10: one hundred years a history of building hydropower plants from 439 00:28:17,480 --> 00:28:21,760 Speaker 10: high altitude lakes that runs intracts to the river into 440 00:28:21,840 --> 00:28:25,520 Speaker 10: the ocean where we harvest the energy several times. So 441 00:28:25,560 --> 00:28:29,680 Speaker 10: that's why Norway is such a good place for laws 442 00:28:29,760 --> 00:28:33,600 Speaker 10: and computes and the new power hunger industry that we 443 00:28:33,680 --> 00:28:34,280 Speaker 10: see today. 444 00:28:35,560 --> 00:28:39,400 Speaker 2: For hyperscalers like Google and Meta, building and owning subsea 445 00:28:39,480 --> 00:28:42,800 Speaker 2: cables became much more than simply a cost of doing business. 446 00:28:43,320 --> 00:28:46,360 Speaker 2: It was the backbone of their growth, and they decided 447 00:28:46,440 --> 00:28:49,760 Speaker 2: they couldn't rely on others. They had to invest and 448 00:28:49,800 --> 00:28:53,640 Speaker 2: build for themselves and work directly with firms like SubCom 449 00:28:53,680 --> 00:28:56,520 Speaker 2: for the cable and gear and Siena to provide the 450 00:28:56,560 --> 00:28:57,760 Speaker 2: optical technology. 451 00:28:58,240 --> 00:29:01,719 Speaker 12: The entry point for us was actually aligned around the 452 00:29:01,720 --> 00:29:04,560 Speaker 12: cloud players coming into that space, because all of a 453 00:29:04,600 --> 00:29:09,560 Speaker 12: sudden you needed very high speed performance and capacity step 454 00:29:09,600 --> 00:29:13,440 Speaker 12: function more than you'd seen in the past. And so 455 00:29:13,560 --> 00:29:16,320 Speaker 12: the timing of that, you know, was such that these 456 00:29:16,360 --> 00:29:20,520 Speaker 12: cloud players really wanted a very high performance you know, 457 00:29:20,600 --> 00:29:24,080 Speaker 12: submarine cables. Their ambitions are you know, into all the 458 00:29:24,200 --> 00:29:26,880 Speaker 12: you know, most of the countries around the world and 459 00:29:26,960 --> 00:29:30,560 Speaker 12: submarine without that submarine cable capacity, and no one was 460 00:29:30,600 --> 00:29:31,720 Speaker 12: going to build it for. 461 00:29:31,560 --> 00:29:35,480 Speaker 2: Them given the demand. Why is it that others didn't 462 00:29:35,480 --> 00:29:40,160 Speaker 2: step in to build what the Hyperscalers needed. Projsbenergy is 463 00:29:40,280 --> 00:29:44,600 Speaker 2: infrastructure managing director at KKR and says that the economics 464 00:29:44,600 --> 00:29:48,240 Speaker 2: are quite different for subc cables than for other private 465 00:29:48,280 --> 00:29:49,560 Speaker 2: equity investments. 466 00:29:49,920 --> 00:29:54,640 Speaker 15: What has happened historically is that though data demand has 467 00:29:54,680 --> 00:29:59,280 Speaker 15: gone up exponentially, the price of data has come down 468 00:30:00,040 --> 00:30:03,480 Speaker 15: substantially over time. So if you owned the cable itself 469 00:30:03,520 --> 00:30:06,320 Speaker 15: and you owned the fibers, you would have effectively a 470 00:30:06,320 --> 00:30:10,080 Speaker 15: depuciating asset from a pricing power perspective. Data centers are 471 00:30:10,120 --> 00:30:13,080 Speaker 15: quite different because data centers, again, yes you're in a 472 00:30:13,680 --> 00:30:18,920 Speaker 15: specific availability zone or connected into network architecture, but the 473 00:30:19,040 --> 00:30:22,840 Speaker 15: value of that land should be appreciating overtime, right the 474 00:30:22,920 --> 00:30:27,680 Speaker 15: value you're not selling bandwidth and connectivity. You're selling power 475 00:30:27,760 --> 00:30:31,880 Speaker 15: and real estate, very strategic real estates within a certain 476 00:30:32,920 --> 00:30:35,560 Speaker 15: availability zone on network architecture. 477 00:30:35,920 --> 00:30:38,520 Speaker 2: So if it's the hyperscalers who are destined to be 478 00:30:38,640 --> 00:30:42,400 Speaker 2: the dominant investors in the undersea cables themselves, what does 479 00:30:42,440 --> 00:30:44,200 Speaker 2: that leave for other investors? 480 00:30:44,480 --> 00:30:47,760 Speaker 13: Where we do say private equity and digital infrastructure funds 481 00:30:47,760 --> 00:30:51,800 Speaker 13: coming into the market is in the services or the 482 00:30:51,840 --> 00:30:57,480 Speaker 13: support companies. The support the market. So the digital infrastructure 483 00:30:57,520 --> 00:31:02,320 Speaker 13: frunds and private equity appliers aren't investing in grain failed 484 00:31:02,400 --> 00:31:07,520 Speaker 13: networks or building cable systems themselves. They are very focused 485 00:31:07,600 --> 00:31:12,960 Speaker 13: on broadly speaken on the service industry that supports this 486 00:31:13,160 --> 00:31:14,320 Speaker 13: critical infrastructure. 487 00:31:14,680 --> 00:31:20,200 Speaker 2: Kkrc's opportunity in the services surrounding undersea cables, providing critical 488 00:31:20,200 --> 00:31:24,600 Speaker 2: functions that hyperscalers need but prefer not to manage themselves. 489 00:31:26,760 --> 00:31:30,560 Speaker 15: Subsea cables are to data centers what railway tracks are 490 00:31:30,880 --> 00:31:33,840 Speaker 15: to railway stations. You can't just upgrade the stations in 491 00:31:33,880 --> 00:31:37,920 Speaker 15: the terminals and have those tracks lying completely unrepaired and 492 00:31:38,000 --> 00:31:41,239 Speaker 15: having them break down. You know, as traffic goes up, 493 00:31:41,320 --> 00:31:43,960 Speaker 15: you've got to invest in both parts of the ecosystem 494 00:31:44,360 --> 00:31:49,040 Speaker 15: to ensure that you have uninterrupted service, especially today when 495 00:31:49,480 --> 00:31:53,080 Speaker 15: the cost of the downtime right for the OTTs, for 496 00:31:53,120 --> 00:31:56,240 Speaker 15: the hyperscalers, for the e commerce players, the cost of 497 00:31:56,360 --> 00:32:01,800 Speaker 15: network interruption has gone up meaningfully. It's mission critical infrastructure 498 00:32:01,840 --> 00:32:06,320 Speaker 15: services provided through asset heavy companies, but not exposed to 499 00:32:06,400 --> 00:32:09,520 Speaker 15: the actual volume and the price of that data that 500 00:32:09,880 --> 00:32:11,040 Speaker 15: goes for that piper system. 501 00:32:11,760 --> 00:32:14,760 Speaker 13: As an industry, we have a global flight of around 502 00:32:14,960 --> 00:32:18,640 Speaker 13: sixty ships, and around thirty percent of that flight is 503 00:32:18,680 --> 00:32:21,960 Speaker 13: going to reach its end of use by date within 504 00:32:22,000 --> 00:32:24,880 Speaker 13: the next decade. So while we are putting tens of 505 00:32:24,920 --> 00:32:28,360 Speaker 13: billions of dollars of investment into new cable systems as 506 00:32:28,400 --> 00:32:31,640 Speaker 13: an industry, we're not putting the same sort of capital 507 00:32:32,960 --> 00:32:35,120 Speaker 13: to help maintain these systems. 508 00:32:35,440 --> 00:32:40,480 Speaker 15: Nobody wants to build a navy right to service their 509 00:32:40,520 --> 00:32:44,960 Speaker 15: own subs needs, because that's also inefficient. You need independent 510 00:32:45,000 --> 00:32:48,800 Speaker 15: service providers who can use those same vessels to service 511 00:32:48,840 --> 00:32:51,600 Speaker 15: other people. To let us build the cable ships and 512 00:32:51,720 --> 00:32:55,280 Speaker 15: service all the hyperskillers and the tel course, let them 513 00:32:55,400 --> 00:32:58,920 Speaker 15: focus on their core competence, their revenue drivers, you know 514 00:32:59,000 --> 00:33:02,240 Speaker 15: exactly what they want to be using their capital budget 515 00:33:02,240 --> 00:33:05,680 Speaker 15: allowances towards, and let us stick on the button of 516 00:33:05,840 --> 00:33:07,080 Speaker 15: managing the subscen needs. 517 00:33:07,400 --> 00:33:10,720 Speaker 2: First came deregulation and the Internet boom and a rush 518 00:33:10,880 --> 00:33:15,040 Speaker 2: to lay undersea cables. Then came the bust when overbuilding 519 00:33:15,120 --> 00:33:19,000 Speaker 2: and deal making got ahead of business fundamentals. Now we're 520 00:33:19,040 --> 00:33:21,800 Speaker 2: in the middle of a new boom powered by hyperscalers 521 00:33:21,840 --> 00:33:25,280 Speaker 2: and the rise of AI data centers. So what's next? 522 00:33:25,920 --> 00:33:29,400 Speaker 2: Smith says, Sienna is busier than ever, and they are 523 00:33:29,600 --> 00:33:31,520 Speaker 2: just getting started, so. 524 00:33:31,480 --> 00:33:35,240 Speaker 12: We're still at the very early days of this. If 525 00:33:35,280 --> 00:33:39,480 Speaker 12: people are going to monetize all this investment that they're 526 00:33:39,480 --> 00:33:43,360 Speaker 12: making in GPUs and AI, it's got to come out 527 00:33:43,560 --> 00:33:47,640 Speaker 12: onto the network. It's got to come out of the datacience. 528 00:33:48,320 --> 00:33:52,360 Speaker 12: I think as an ecosystem, as an industry, we're grossly 529 00:33:52,440 --> 00:33:56,160 Speaker 12: underestimating how much capacity will be required. 530 00:33:56,880 --> 00:34:00,840 Speaker 13: Is there a grete investment opportunity that demand drivers say 531 00:34:00,840 --> 00:34:03,760 Speaker 13: there are, but really it is who is going to 532 00:34:03,800 --> 00:34:07,400 Speaker 13: move into this space because it is dominated by the 533 00:34:07,440 --> 00:34:09,840 Speaker 13: people who are moving the most data around the world. 534 00:34:10,040 --> 00:34:14,799 Speaker 13: From the cable industry perspective, we're not quite sure exactly 535 00:34:15,360 --> 00:34:18,600 Speaker 13: what the development of AI is going to do to 536 00:34:19,000 --> 00:34:22,840 Speaker 13: the deployment of cables. I think, you know, it's obviously 537 00:34:22,880 --> 00:34:26,719 Speaker 13: going to require a lot more cable deployments, just how 538 00:34:26,800 --> 00:34:28,440 Speaker 13: much we're not sure. 539 00:34:30,080 --> 00:34:33,200 Speaker 2: Coming up. Since World War II, the US government has 540 00:34:33,280 --> 00:34:36,640 Speaker 2: partnered with the American universities on a wide array of 541 00:34:36,760 --> 00:34:40,640 Speaker 2: research projects, but that partnership may be coming to an end. 542 00:34:41,200 --> 00:34:43,000 Speaker 2: We take a look at what it could mean for 543 00:34:43,080 --> 00:34:53,040 Speaker 2: business in the economy. This is a story about the 544 00:34:53,080 --> 00:34:57,479 Speaker 2: cost of privatizing American innovation. For many years, the US 545 00:34:57,480 --> 00:34:59,960 Speaker 2: has led the world in innovation, driven in large part 546 00:35:00,120 --> 00:35:04,160 Speaker 2: by government funding of university research. But President Trump ramped 547 00:35:04,280 --> 00:35:07,120 Speaker 2: up efforts to get higher education back into line with 548 00:35:07,239 --> 00:35:11,200 Speaker 2: cuts in research funds and last week saying international students 549 00:35:11,280 --> 00:35:15,400 Speaker 2: have to leave Harvard altogether. As Scarlet Food reports, the 550 00:35:15,480 --> 00:35:19,560 Speaker 2: ramifications extend far beyond lecture halls and science labs. 551 00:35:20,800 --> 00:35:24,280 Speaker 16: US research universities are the envy of the World Prize 552 00:35:24,280 --> 00:35:27,239 Speaker 16: for their ability to attract top students and faculty who 553 00:35:27,320 --> 00:35:31,719 Speaker 16: specialized academic work often seed economic clusters of innovation on 554 00:35:32,040 --> 00:35:35,839 Speaker 16: and off campus, and that has led to technological breakthroughs 555 00:35:36,160 --> 00:35:39,240 Speaker 16: from the birth of the Internet and GPS to life 556 00:35:39,239 --> 00:35:45,520 Speaker 16: saving mRNA vaccines. Backstopping all of this uncle sam last year, 557 00:35:45,560 --> 00:35:48,920 Speaker 16: the federal government funded sixty billion dollars of research at 558 00:35:48,920 --> 00:35:50,080 Speaker 16: American universities. 559 00:35:50,640 --> 00:35:54,000 Speaker 4: I signed an order creating the Department of Government Efficiency, 560 00:35:55,040 --> 00:35:58,239 Speaker 4: which is now really waging more on government waste, fraud, 561 00:35:58,320 --> 00:35:58,800 Speaker 4: and abuse. 562 00:35:59,400 --> 00:36:02,160 Speaker 16: But this TREU re cycle is now under threat as 563 00:36:02,200 --> 00:36:06,080 Speaker 16: President Trump targets elite schools in multiple ways, notably by 564 00:36:06,120 --> 00:36:10,120 Speaker 16: pulling public funding and cracking down on immigrants, including international 565 00:36:10,120 --> 00:36:13,600 Speaker 16: students reliant on student visas. All of this leads to 566 00:36:13,640 --> 00:36:16,799 Speaker 16: an erosion of American soft power, a phrase coined by 567 00:36:16,840 --> 00:36:20,000 Speaker 16: the late Harvard scholar and NIC director Joseph Nye. 568 00:36:20,440 --> 00:36:23,719 Speaker 2: Soft powers the ability to get what you want through 569 00:36:23,760 --> 00:36:26,839 Speaker 2: attraction ratherland, coersion, or payment, a. 570 00:36:26,760 --> 00:36:29,160 Speaker 16: Power that the US has capitalized on for most of 571 00:36:29,239 --> 00:36:30,080 Speaker 16: the last century. 572 00:36:30,719 --> 00:36:33,719 Speaker 6: During World War Two and the United States leveraged its 573 00:36:33,760 --> 00:36:36,799 Speaker 6: scientific excellence and the high quality scientists we had in 574 00:36:36,920 --> 00:36:40,320 Speaker 6: universities and some of those that we attracted from abroad. 575 00:36:41,239 --> 00:36:43,320 Speaker 6: And in the wake of World War Two, the government 576 00:36:43,560 --> 00:36:47,319 Speaker 6: vastly expanded the amount of funding that it provided two 577 00:36:47,360 --> 00:36:51,120 Speaker 6: American universities in order to conduct research on behalf of 578 00:36:51,160 --> 00:36:54,200 Speaker 6: the American people. So this has led the United States 579 00:36:54,239 --> 00:36:57,880 Speaker 6: to be a leader in innovation, in building the information 580 00:36:58,000 --> 00:37:01,239 Speaker 6: economy that we have today, in health care, and in 581 00:37:01,360 --> 00:37:03,880 Speaker 6: a wide variety of other fields that help us support 582 00:37:03,880 --> 00:37:06,560 Speaker 6: our economic prosperity, in our security. And when you ask 583 00:37:06,920 --> 00:37:09,640 Speaker 6: why is it that's such a huge proportion of Nobel 584 00:37:09,680 --> 00:37:12,560 Speaker 6: Prizes get awarded to Americans, Why is it that the 585 00:37:12,560 --> 00:37:14,879 Speaker 6: best scientists and engineers from all over the world want 586 00:37:14,920 --> 00:37:17,239 Speaker 6: to come to the United States, It's because of this 587 00:37:17,320 --> 00:37:21,319 Speaker 6: extraordinary partnership we've had here where the government says we're 588 00:37:21,360 --> 00:37:24,560 Speaker 6: going to do research through these universities, We're going to 589 00:37:24,600 --> 00:37:26,800 Speaker 6: fund that, and we're going to enable these universities to 590 00:37:26,840 --> 00:37:29,440 Speaker 6: become the best in the world and produce these extraordinary 591 00:37:29,440 --> 00:37:31,760 Speaker 6: innovations on behalf of the American people. 592 00:37:32,320 --> 00:37:34,160 Speaker 16: But first we start with the money. 593 00:37:34,680 --> 00:37:39,640 Speaker 4: One of the most important initiatives is DOGE and we 594 00:37:40,120 --> 00:37:44,160 Speaker 4: have cut billions and billions and billions of dollars. We're 595 00:37:44,200 --> 00:37:46,440 Speaker 4: looking to get it maybe to a trillion dollars if 596 00:37:46,480 --> 00:37:47,160 Speaker 4: we could do that. 597 00:37:48,200 --> 00:37:51,480 Speaker 16: Under President Trump, the latest federal budget proposal slashes one 598 00:37:51,560 --> 00:37:54,600 Speaker 16: hundred and sixty three billion dollars in non defense programs, 599 00:37:54,840 --> 00:37:58,000 Speaker 16: including student aid and research funding. It's already led to 600 00:37:58,000 --> 00:38:00,480 Speaker 16: the suspension of more than two billion dollars and funding 601 00:38:00,480 --> 00:38:03,560 Speaker 16: for Harvard, eight hundred million in grants for Johns. Hopkins, 602 00:38:03,960 --> 00:38:06,839 Speaker 16: four hundred million in funding cuts for Columbia. The list 603 00:38:06,880 --> 00:38:07,239 Speaker 16: goes on. 604 00:38:08,280 --> 00:38:13,280 Speaker 6: It's deeply worrisome. This pact between the government and research 605 00:38:13,400 --> 00:38:17,640 Speaker 6: universities has been fundamental to the excellence of American research universities, 606 00:38:18,080 --> 00:38:21,839 Speaker 6: and it has contributed tremendously to the prosperity, health and 607 00:38:21,880 --> 00:38:24,719 Speaker 6: security of our country. And that pact has depended on 608 00:38:24,800 --> 00:38:28,160 Speaker 6: the idea that the American government will come to universities 609 00:38:28,160 --> 00:38:30,040 Speaker 6: and ask them to do research that is in the 610 00:38:30,040 --> 00:38:33,800 Speaker 6: interests of the American people, and universities have done that spectacularly, 611 00:38:33,800 --> 00:38:38,920 Speaker 6: making both the country and the universities stronger. Throughout that time, 612 00:38:39,360 --> 00:38:42,680 Speaker 6: the American government has respected this principle of academic freedom. 613 00:38:43,080 --> 00:38:47,040 Speaker 6: That means that when that research has undertaken, universities and 614 00:38:47,080 --> 00:38:50,359 Speaker 6: their faculties can pursue the truth as they see it. 615 00:38:50,840 --> 00:38:53,960 Speaker 6: What we're seeing now is the use of research and 616 00:38:54,120 --> 00:38:57,200 Speaker 6: funding and the leverage that it gives the government over 617 00:38:57,400 --> 00:38:59,560 Speaker 6: universities as a lever to try to change what it 618 00:38:59,600 --> 00:39:02,320 Speaker 6: is they take, and that threatens to disrupt the quality 619 00:39:02,360 --> 00:39:04,960 Speaker 6: of our universities and the principles that are fundamental to them. 620 00:39:05,640 --> 00:39:09,200 Speaker 16: The funding that the government provides isn't easily replaceable either. 621 00:39:09,880 --> 00:39:12,919 Speaker 6: There's no way the private sector could substitute for what 622 00:39:13,000 --> 00:39:16,879 Speaker 6: American research universities are doing now, both on their own 623 00:39:16,880 --> 00:39:19,000 Speaker 6: and in partnership with the government. And I suspect if 624 00:39:19,040 --> 00:39:21,239 Speaker 6: you ask the private sector, right our tech companies or 625 00:39:21,280 --> 00:39:24,040 Speaker 6: our farmer companies, they would agree with that. And the 626 00:39:24,080 --> 00:39:26,920 Speaker 6: reason is because we do the kind of long term 627 00:39:26,960 --> 00:39:31,280 Speaker 6: research that doesn't have the predictable immediate term or medium 628 00:39:31,360 --> 00:39:35,399 Speaker 6: term payoff that is going to matter to our corporations. 629 00:39:35,160 --> 00:39:38,920 Speaker 16: And the ripple effects stretch well beyond a university's physical campus. 630 00:39:39,400 --> 00:39:41,239 Speaker 17: Many of our students, about three quarters of them live 631 00:39:41,280 --> 00:39:41,880 Speaker 17: on campus. 632 00:39:42,239 --> 00:39:45,279 Speaker 16: Michael Samwellian is a founding director of the Jacobs Urban 633 00:39:45,320 --> 00:39:49,920 Speaker 16: Technology Hub at Cornell Tech in New York City. Cornell 634 00:39:49,960 --> 00:39:53,000 Speaker 16: Tech and Johns Hopkins received donations from Michael R. Bloomberg, 635 00:39:53,280 --> 00:39:55,359 Speaker 16: founder and majority owner of Bloomberg LP. 636 00:39:56,600 --> 00:40:00,040 Speaker 17: So we work on building bridges between university research and 637 00:40:00,040 --> 00:40:01,120 Speaker 17: and the city. 638 00:40:01,640 --> 00:40:04,880 Speaker 16: He says, US universities have evolved beyond just places to 639 00:40:04,960 --> 00:40:08,040 Speaker 16: learn in two key drivers of industry specific growth. 640 00:40:08,400 --> 00:40:10,440 Speaker 17: Well, I think there's a really interesting shift that's happened 641 00:40:10,440 --> 00:40:13,520 Speaker 17: over the past generation. Increasingly universities are urban. We're in 642 00:40:13,520 --> 00:40:15,439 Speaker 17: the middle of New York City right now at Cornell Tech. 643 00:40:15,600 --> 00:40:18,120 Speaker 17: There's an increasing shift of universities to be far more 644 00:40:18,200 --> 00:40:21,239 Speaker 17: urban because that's where talent is and that's where diversity is. 645 00:40:21,480 --> 00:40:23,640 Speaker 17: So in many cases, I think cities are learning that 646 00:40:24,000 --> 00:40:28,239 Speaker 17: universities are economic powerhouses. I bicker with my dean every 647 00:40:28,239 --> 00:40:30,560 Speaker 17: once in a while on is Cornell Tech a school 648 00:40:30,600 --> 00:40:33,000 Speaker 17: or are we an economic development project? As an urban planner, 649 00:40:33,040 --> 00:40:35,439 Speaker 17: I think of us as an economic development project one 650 00:40:35,440 --> 00:40:37,799 Speaker 17: that New York City over a decade ago saw the 651 00:40:37,800 --> 00:40:40,720 Speaker 17: power of universities in terms of increasing the tech talent 652 00:40:40,800 --> 00:40:43,640 Speaker 17: that New York has and diversify in New York City's economy. 653 00:40:43,880 --> 00:40:47,319 Speaker 17: So Cornell Tech was a mechanism to basically help diversify 654 00:40:47,440 --> 00:40:49,960 Speaker 17: us not away from finance, but also make sure that 655 00:40:49,960 --> 00:40:52,080 Speaker 17: New York City was going to be a tech powerhouse. 656 00:40:52,760 --> 00:40:55,080 Speaker 17: We are a visual manifestation of tech in New York. 657 00:40:55,360 --> 00:40:57,880 Speaker 17: New York City is probably the number two kind of 658 00:40:57,960 --> 00:41:02,040 Speaker 17: VC destination for my the in for technology companies across 659 00:41:02,040 --> 00:41:04,520 Speaker 17: the country, and back in twenty twenty you probably know this. 660 00:41:04,560 --> 00:41:06,120 Speaker 17: There are more tech jobs in New York City than 661 00:41:06,160 --> 00:41:09,000 Speaker 17: finance jobs that would not have happened without places like 662 00:41:09,040 --> 00:41:12,000 Speaker 17: Cornell Tech and deep investment in the tracting schools in 663 00:41:12,040 --> 00:41:15,000 Speaker 17: New York City. We recently did a report back in 664 00:41:15,040 --> 00:41:17,279 Speaker 17: twenty twenty four to look at the economic impact of 665 00:41:17,360 --> 00:41:20,600 Speaker 17: Cornell Tech, and every year we're bringing about three quarters 666 00:41:20,600 --> 00:41:22,880 Speaker 17: of a billion dollars to New York City economy, and 667 00:41:22,920 --> 00:41:25,000 Speaker 17: that's just six undred graduate students. 668 00:41:25,680 --> 00:41:28,400 Speaker 16: One of the universities most dependent on federal funding is 669 00:41:28,480 --> 00:41:32,120 Speaker 16: Johns Hopkins in Baltimore. From twenty twenty to twenty twenty three, 670 00:41:32,600 --> 00:41:36,200 Speaker 16: Washington DC was responsible for just under twelve billion of 671 00:41:36,239 --> 00:41:38,480 Speaker 16: its more than thirteen and a half billion dollar R 672 00:41:38,520 --> 00:41:41,759 Speaker 16: and D expenditure, and people like Christy Weiskill, the head 673 00:41:41,760 --> 00:41:45,040 Speaker 16: of Johns Hopkins Technology Ventures, are working to make sure 674 00:41:45,120 --> 00:41:47,080 Speaker 16: there's a return on the government's investment. 675 00:41:48,000 --> 00:41:50,680 Speaker 18: Our role is to take the great ideas from our 676 00:41:50,719 --> 00:41:54,560 Speaker 18: faculty in students and bring those to market. We really 677 00:41:54,640 --> 00:41:57,719 Speaker 18: leaned into this a little over a decade ago when 678 00:41:57,760 --> 00:42:00,879 Speaker 18: we realized that there was an opportunity to think about 679 00:42:00,880 --> 00:42:03,799 Speaker 18: the application of so much of the amazing research here 680 00:42:03,800 --> 00:42:07,279 Speaker 18: at Johns Hopkins, and also the opportunity for Baltimore. So 681 00:42:07,400 --> 00:42:10,279 Speaker 18: we built a team that goes and speaks to our 682 00:42:10,280 --> 00:42:14,040 Speaker 18: researchers and faculty about their most promising research ways that 683 00:42:14,120 --> 00:42:16,879 Speaker 18: can change lives for the better, and then we connect them, 684 00:42:16,920 --> 00:42:19,960 Speaker 18: help them pitch to the VC industry, help them connect 685 00:42:19,960 --> 00:42:23,880 Speaker 18: with corporate America. And we've seen a dramatic increase in 686 00:42:23,960 --> 00:42:25,560 Speaker 18: venture funding as a result of that. 687 00:42:26,160 --> 00:42:28,840 Speaker 16: Why Scille says more than four billion dollars in venture 688 00:42:28,880 --> 00:42:32,279 Speaker 16: capital has flowed into companies incubated by Johns Hopkins. 689 00:42:32,719 --> 00:42:36,680 Speaker 18: There's a company in Boston called Lantheas that licensed Pilarify. 690 00:42:36,840 --> 00:42:40,920 Speaker 18: It's a prostate cancer diagnostic that helps over two hundred 691 00:42:40,960 --> 00:42:45,399 Speaker 18: thousand men a year with metastatic prostate cancer. Without this technology, 692 00:42:45,640 --> 00:42:48,560 Speaker 18: clinicians would not be able to treat patients as well. 693 00:42:48,960 --> 00:42:52,760 Speaker 18: And we are thrilled that this diagnostic allows a patient 694 00:42:52,760 --> 00:42:57,080 Speaker 18: to basically view in technicolor what earlier clinicians had described 695 00:42:57,080 --> 00:42:59,920 Speaker 18: as trying to diagnose a patient in black and white TVs. 696 00:43:00,000 --> 00:43:02,600 Speaker 18: So this diagnostic, which is a product that brings in 697 00:43:02,640 --> 00:43:05,920 Speaker 18: over a billion dollars a year for Lantheus, was developed 698 00:43:05,960 --> 00:43:09,040 Speaker 18: here with nih dollars at Johns Hopkins. 699 00:43:09,280 --> 00:43:11,839 Speaker 16: So given all that is, the US now at risk 700 00:43:11,880 --> 00:43:15,120 Speaker 16: of losing its edge as a global destination for that 701 00:43:15,239 --> 00:43:17,240 Speaker 16: scientific talent and innovation. 702 00:43:17,680 --> 00:43:21,719 Speaker 18: Anytime there's uncertainty that can create potential problems. People might 703 00:43:21,760 --> 00:43:25,520 Speaker 18: rethink where they study, what they study, how they study. 704 00:43:26,160 --> 00:43:29,880 Speaker 18: We have the chance to seed that global dominance to China. 705 00:43:30,000 --> 00:43:34,120 Speaker 18: China has increased research spending nine hundred percent in the 706 00:43:34,200 --> 00:43:37,640 Speaker 18: last decade as a percent of GDP. Unless we continue 707 00:43:37,680 --> 00:43:40,600 Speaker 18: to fund research, they will outstrip US in terms of 708 00:43:40,719 --> 00:43:42,719 Speaker 18: patents companies innovation. 709 00:43:43,600 --> 00:43:46,960 Speaker 16: Decades of government funded research has attracted a pipeline of talent, 710 00:43:47,120 --> 00:43:51,080 Speaker 16: homegrown and increasingly from outside the US. When you think 711 00:43:51,120 --> 00:43:54,080 Speaker 16: of America's most cutting edge companies, they often share some 712 00:43:54,200 --> 00:43:59,040 Speaker 16: common traits. Giant market caps, global reach, and oftentimes founders 713 00:43:59,120 --> 00:44:03,320 Speaker 16: and or CEOs born and raised abroad and educated in America. 714 00:44:03,880 --> 00:44:06,920 Speaker 18: I believe that it's nearly half of fortune five hundred 715 00:44:07,040 --> 00:44:10,640 Speaker 18: CEOs that are either immigrants or children of immigrants. 716 00:44:10,960 --> 00:44:14,480 Speaker 17: Who's the next leader of a big multinational American company. 717 00:44:14,680 --> 00:44:16,160 Speaker 17: They're the one to five chance that they were an 718 00:44:16,200 --> 00:44:17,080 Speaker 17: international student. 719 00:44:17,480 --> 00:44:22,120 Speaker 19: The US represents the premier destination for international students around 720 00:44:22,120 --> 00:44:22,560 Speaker 19: the world. 721 00:44:23,200 --> 00:44:26,640 Speaker 16: What's become clear is as much as US research universities 722 00:44:26,680 --> 00:44:30,000 Speaker 16: depend on federal government money to operate and fund their research, 723 00:44:30,120 --> 00:44:33,720 Speaker 16: they also depend on international students for the same starting 724 00:44:33,760 --> 00:44:36,960 Speaker 16: with paying tuition that has come under direct threat when 725 00:44:37,000 --> 00:44:40,200 Speaker 16: the Trump administration announced it would bar Harvard from enrolling 726 00:44:40,280 --> 00:44:44,200 Speaker 16: international students. While the State Department halts interviews for student visas, 727 00:44:44,640 --> 00:44:47,520 Speaker 16: a federal court has temporarily blocked the ban on Harvard. 728 00:44:47,800 --> 00:44:51,720 Speaker 19: Over two hundred thousand international students work in the US. 729 00:44:51,600 --> 00:44:54,640 Speaker 16: Mirriam Feldbloom is the president and CEO of the President's 730 00:44:54,640 --> 00:44:56,800 Speaker 16: Alliance on Higher Education and Immigration. 731 00:44:57,719 --> 00:45:02,640 Speaker 19: Overall, the Department of Commerce has simated that international students 732 00:45:02,680 --> 00:45:07,080 Speaker 19: contributed fifty billion dollars to the US economy in twenty 733 00:45:07,080 --> 00:45:11,480 Speaker 19: twenty three, twenty four. That actually makes international education of 734 00:45:11,560 --> 00:45:14,480 Speaker 19: the tenth largest export in the US even though the 735 00:45:14,480 --> 00:45:18,560 Speaker 19: students are coming here. International students are only six percent 736 00:45:19,160 --> 00:45:22,960 Speaker 19: of total student enrollment and higher education, so we're not 737 00:45:23,040 --> 00:45:27,680 Speaker 19: talking about a large population. But the contributions that international 738 00:45:27,760 --> 00:45:32,760 Speaker 19: students provide by their skills, their talents, what they buy, 739 00:45:32,960 --> 00:45:36,040 Speaker 19: what they do is far greater than what the six 740 00:45:36,080 --> 00:45:37,160 Speaker 19: percent would indicate. 741 00:45:38,360 --> 00:45:41,120 Speaker 16: As the Trump administration cracks down on public funding to 742 00:45:41,239 --> 00:45:46,280 Speaker 16: universities and visas for international students, other countries like Canada, Australia, 743 00:45:46,320 --> 00:45:49,919 Speaker 16: and the UK are stepping up their recruitment efforts. The 744 00:45:50,000 --> 00:45:54,520 Speaker 16: administration's rhetoric would just discourage international students from choosing the 745 00:45:54,600 --> 00:45:57,960 Speaker 16: US as a destination, and they'd end up gravitating away 746 00:45:58,040 --> 00:46:00,480 Speaker 16: from the country. Is that something you can think about 747 00:46:01,200 --> 00:46:01,719 Speaker 16: every day? 748 00:46:02,280 --> 00:46:07,879 Speaker 19: There's no doubt that if there's continued rhetoric, policy proposals, 749 00:46:07,880 --> 00:46:13,600 Speaker 19: and actions that discourage international students from coming. That impact 750 00:46:13,640 --> 00:46:17,360 Speaker 19: will be seen in decreased enrollments in the fall. 751 00:46:18,280 --> 00:46:20,520 Speaker 16: Does it lead to the closure of certain programs or 752 00:46:20,680 --> 00:46:23,920 Speaker 16: innovative programs, or certain potential research breakthroughs. 753 00:46:24,440 --> 00:46:28,359 Speaker 19: We know with based on history, based on research, that 754 00:46:28,560 --> 00:46:33,719 Speaker 19: our research productivity will diminish. Probably the number of patents 755 00:46:33,800 --> 00:46:37,840 Speaker 19: being filed will decline based on past history. We don't 756 00:46:37,960 --> 00:46:40,640 Speaker 19: know what will be lost. We know things will be lost. 757 00:46:41,160 --> 00:46:45,319 Speaker 19: And this isn't about internationals students or international talent or 758 00:46:45,320 --> 00:46:49,440 Speaker 19: domestic talent. The US needs talent. I think one of 759 00:46:49,480 --> 00:46:51,960 Speaker 19: the things that we have to acknowledge is that the 760 00:46:52,360 --> 00:46:57,840 Speaker 19: climate of fear and anxiety and uncertainty that international students 761 00:46:57,840 --> 00:47:00,880 Speaker 19: are feeling across the country at big and smaller institutions, 762 00:47:01,160 --> 00:47:05,080 Speaker 19: public and private, highly elite, and those who are not 763 00:47:05,160 --> 00:47:08,080 Speaker 19: known except to their community where they're beloved, is that 764 00:47:08,160 --> 00:47:15,839 Speaker 19: it's also generating uncertainty and anxiety among researchers, staff, faculty, 765 00:47:16,200 --> 00:47:19,440 Speaker 19: and others in these campus communities in which I am 766 00:47:19,480 --> 00:47:23,440 Speaker 19: hearing from campus leaders that some of their faculties, some 767 00:47:23,440 --> 00:47:26,400 Speaker 19: of their star faculty, are saying, I'm not quite sure 768 00:47:26,400 --> 00:47:29,279 Speaker 19: if I should remain in the US. So again, the 769 00:47:29,480 --> 00:47:32,480 Speaker 19: loss is not only about individual students who may be 770 00:47:32,600 --> 00:47:41,920 Speaker 19: directly impacted, but it's about a community of generation of students, graduates, faculty, 771 00:47:42,239 --> 00:47:45,759 Speaker 19: researchers who we may lose, and we're going to feel 772 00:47:45,800 --> 00:47:47,160 Speaker 19: the impacts of that loss. 773 00:47:49,520 --> 00:47:51,479 Speaker 2: That does it for us Here at Wall Street Week, 774 00:47:51,680 --> 00:47:55,160 Speaker 2: I'm David Weston. See you next week for more stories 775 00:47:55,200 --> 00:48:01,760 Speaker 2: of capitalism.