Interoute, the internet networks company, reports that three of the four internet sub-cables that run from Asia to North America have been damaged.
These carry more than 75 per cent of traffic between the Middle East, Europe and America. It’s hard to gather what this actually means — is it that the internet is down or (more likely) significantly slower than usual between the Middle East and America?
Here’s the big problem right now:
Finance companies [are] looking to settle trades on European and American exchanges. This cable outage means there is no real-time access to, for example, trading ticker services. This means branch offices are compromised when trying to place trades. As private networks are being affected, these organisations are forced to rely on public internet services that may have more latency and may not update as quickly. The loss of time even precious seconds is hugely important to trading exchanges. These public internet services are now struggling to cope with peak in demand – leading to increased latency, and further compromising the integrity of the trading data.
These major cables break about once a year. But prior to January of ’08, there had never been more than one out of commission at a time.