The ambitious digital project that could attract the likes of tech giants Google and Apple to Wales

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Plans for one of the world’s most advanced digital infrastructures aimed at attracting global technology firms and creating thousands of new hi-tech jobs can be revealed for the Cardiff Capital Region.

The plan, which is the brainchild of Gary Thompson, would utilise the existing Hibernia Express transatlantic submarine cable – which links the trading centres of New York and London – by building an effective spur off it in the Bristol Channel to make landfall at Barry in the Vale of Glamorgan, in what Mr Thompson said would “position Wales at the forefront of the new industrial revolution”.

Through the creation of an international internet gateway, with a multi-terabit fibre spine, from a landing station in Barry it would spread out across the city region through 300 kilometres of ducting, at a cost of around £37m.

To put it into context, a terabit is a thousand gigabit – and a gigabit is 10 times faster than some of the current highest speeds in the region of 100 megabit.

Like in Ireland and Denmark the network would be publicly-owned and open for commercial providers to offer services.

The plan is for full fibre to reach all major hospitals, council offices and higher and further education institutions across the region, as well as its major business parks, enterprise zones and sporting stadia.

While not all businesses and organisations would require it, terabit capacity – and the spine could offer multi-terabit per second – is needed in areas such as advances in healthcare offered by genomics – where Mr Thompson said the region could become a leading European centre of excellence on the back of the fibre spine.

The Hibernia Express has a capa-city of 55 terabit per second. It would also enable the rollout of 5G to support the development of test beds for driverless cars – which is an ambition of the Welsh Government for its new £100m technology focused automotive park in Ebbw Vale.

How a multi-terrabit fibre spine could look across the Cardiff Capital Region

Through the Hibernia Express it would also connect the region – with huge potential for its financial services sector – to the trading floors of New York and the City of London, opening up the prospects of trades being placed quicker in the region, due to superior latency (time to transfer data via the internet), than can be transacted between London and New York.

The project is seeking backing from the UK Government’s £200m Local Full Fibre Networks investment fund. Match funding could come from the region’s £1.2bn City Deal. A decision on funding from the UK Government for the project is expected next spring

Mr Thompson was pivotal in the initial business case for the Swansea Bay City Region’s City Deal, which proposed the region exploiting a proposed new terabit capacity transatlantic cable [not Hibernia Express] by making landfall at Oxwich Bay, to drive a new wave of indigenous tech entrepreneurs, as well as attracting new businesses and investment into region.

However, in the region’s final City Deal bid document, submitted to the UK Treasury, there was no reference to the project.

Mr Thompson said: “The phrase game-changer is often overused but this project has potential to see billions of pounds of new investment flowing into the region, creating thousands of much needed hi-tech jobs in the process from technology to geo-nomics.

“It would also lower latency and bandwidth between the financial trading centres of London and New York.

“The importance of this is critical to these two centres retaining world dominance across the financial sectors, especially as China, through the trading centres of Hong Kong and Shanghai, is planning on entering the world financial markets.”

He added: “But to be clear, this isn’t just about digital infrastructure – it is about positioning Wales at the forefront of the new industrial revolution.”

He said the fibre spine could attract major technology firms looking to set up secure data centres in the region. Apple, for example, has invested in near £1bn projects making use of similar publicly-owned terabit digital networks in Ireland and Denmark.

Mr Thompson said: “Global tech giants such as Facebook, Google, Amazon and Microsoft are also looking to invest in new data centres in Europe and the ambition is for the city region to attract as much of this investment as possible.

“Apple in both Denmark and Ireland want to power their data centres with renewable energy and in Ireland is investing a further £400m in a windfarm project.

“So, if we can capture these data centres there is huge potential for spin-off investment in new renew-able projects and potentially in
larger tidal lagoons off the coasts of Cardiff and Newport if the path-
finder Swansea Bay project is given the go-ahead.”

Subject to funding Mr Thompson said the digital infrastructure could be operational by 2021.

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Here Gary Thompson sets out in detail plans to build one of the world’s most advanced digital infrastructures across the Cardiff Capital Region.

Last year I set out the case for Wales creating a publicly-owned national digital infrastructure.

And in his spring Budget, Chancellor Philip Hammond announced, in support of the UK Government’s industrial strategy, a new National Productivity Investment Fund, including a £200m Local Full Fibre Networks (LFFN) investment fund.

This fund will provide investment to create “fibre spines”. Working on behalf of the Cardiff Capital Region (CCR), I have developed a vision (including a £37m investment case) to create an international internet gateway and publicly-owned multi-terabit fibre spine in the CCR.

With the right marketing/business development and investment in skills, its terabit capacity (up to 55 terabit per second) and 5G services have the potential to create thousands of new hi-tech jobs, scores of new businesses and position the region as a magnet for global inward investment from leading tech firms.

Our expression of interest was submitted to UK Government at the end of August and, if realised, would also have the potential to leverage over £3bn in investments in the CCR and provide it with an integrated digital, energy and physical infrastructure with the potential to leverage similar £1bn, plus investments to those realised by Denmark and the Republic of Ireland from Apple in 2016.

I have been in discussions with key government departments including DCMS, HM Treasury and DCLG since January this year. The feedback I have received is that the proposal is one of the most strategic propositions it has received for investment. There is more work to do, but if successful,the CCR could receive a multi-million investment package from the UK Government for the project. A decision is expected next spring.

But to be clear, this isn’t just about digital infrastructure – it is about positioning Wales at the forefront of the new industrial revolution.

This international internet gateway and multi-terabit fibre spine would provide the CCR with the most advanced digital infrastructure in the UK and a latency (how long it takes data to be transferred per second and measured in milliseconds) advantage as a result of it being 1/10th closer to New York than London.

How it would work

The plan is for the CCR to create a direct connection to the Hibernia Express international submarine cable. Hibernia Express – from New York and making landfall in the South-West of England before connecting to the City of London – was the first transatlantic submarine cable system built in 15 years, at a cost of $300m. It provides the lowest latency/fastest speed (55 millisecond) between Europe and North America; and a bandwidth capacity of 55 terabits per second between Europe and New York.

Hibernia Express passes through the Bristol Channel, but without a submarine cable landing station in Wales.The plan, at a cost of £37m, is to:

  • Build an international internet gateway and submarine cable landing station in Barry in the Vale of Glamorgan and a new subsea cable which connects this landing station to the Hibernia Express in the Bristol Channel.
  • Roll out 300km of multi-terabit fibre spine – operational by 2021 – connecting the international internet gateway and servicing all 10 local authority areas in CCR (Blaenau Gwent, Bridgend, Caerphilly, Cardiff, Merthyr Tydfil, Monmouthshire, Newport, Rhondda Cynon Taf, Torfaen and the Vale of Glamorgan) with terabit infrastructure.

There is the possibility of running part of the required ducting for the fibre spine alongside the electric wires needed for electrification of the core Valley Lines.

It would be owned and managed by the CCR and provide terabit infrastructure to its key economic assets, including hospitals, public buildings, railway stations, universities, colleges, super-computers, enterprise zones and business parks, and all sporting stadia across the region.

Huge commercial potential

It would also offer huge commercial and investment opportunities, including from some of the world’s biggest technology firms, such as Apple, Amazon and Microsoft, which are looking to invest billions in Europe in new data centres. The ambition of the CCR is to secure a significant slice of these investments.

In 2016 both Jutland in Denmark and Ireland secured $1bn-plus deals with Apple to create 1.6 million sq ft cloud data analytic centres, which will be powered from renewable energy sources, built with further investment from Apple.

This clearly shows the potential to secure spin-out investment opportunities for the region, not just in bringing a new wave of renewable projects to market – including possible backing for future tidal lagoons – but in other areas too.

Financial services

It would further reduce latency and bandwidth between the financial trading centres of London and New York. The importance of this is critical to these two centres retaining world dominance in the financial sectors, especially as China, through the trading centres of Hong Kong and Shanghai, is planning on entering the world financial markets.

The CCR would have a latency advantage because it is 1/10th closer to New York than London. And post-Brexit this would provide the region with an opportunity to add resilience to London’s financial services markets. So it would provide UK plc with a alternative internet resilience outside of the City of London, at a cost potentially up to 80% lower than London, as well as providing a potential £1bn-plus value added for the economy of the CCR.

Genomic and health informatics

It would enable the CCR to become a global centre of genomic and health informatics.

This market is in its infancy and in Europe there will be a requirement for storage, management and distribution of over 700 million terabits of data – as each human genome requires 1 terabit of storage.

5G test beds

The fibre spine would act as an enabler to develop a 5G network across the region with the business sector. One obvious application is in partnership with the region’s automotive industry and academic sector to develop an autonomous vehicle industry.

Public services:

It would enable the public sector to re-purpose and digitise service delivery models through having a publicly owned-digital infrastructure.

It would also provide a “5G-ready” fibre backbone, which can act as an enabler for telecommunication providers to provide gigabit and 5G services to hard-to-reach rural and urban communities.

Indigenous business sector

It would provide the CRC’s priority growth sectors with terabit capacity and access to international digital markets and a latency.

It would also ensure the majority of businesses in the city region can connect to the multi-terabit fibre spine.

Conclusion

This is a truly “game-changing” opportunity for the CCR, providing it with the UK’s most advanced digital infrastructure. It would put the region at the forefront of globally growing industries including 5G, autonomous vehicles, precision and genomic medicine, data analytics and financial services.

  • Gary Thompson developed the original business case, The Internet Coast for the Swansea Bay City Deal. He has spent most of this year as chief investment officer to the Liverpool City Region Combined Authority.

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