Could Virginia Beach Become the Next Mecca for Data Centers?

This map shows the route of transatlantic cables, circa 2012.

This map shows the route of transatlantic cables, circa 2012. Note: no Mid-Atlantic connections.

by James A. Bacon

Virginia Beach is finally getting its Tide — not the Tide light rail system, but MAREA, the Spanish word for tide, which happens to be the name of a transatlantic cable project recently announced by Facebook, Microsoft and Teleconica, the Spanish telecommunications giant, according to the Virginian-Pilot.

The 4,000-mile cable will have a capacity of 160 terabytes of data per second, the highest-capacity cable of its kind to be laid under the ocean. The cable will be operated by Telxius, a unit of Telefonica. The company also will build the first transoceanic fiber cable station in the MidAtlantic region, in Virginia Beach off General Booth Boulevard.

Also, according to the Virginian-Pilot, Telefonica recently announced construction of a 7,000-mile cable stretching from Brazil to Puerto Rico and VirginiaBeach.

Virginia Beach officials see an economic opportunity. Said City Councilman Ben Davenport, chairman of the Virginia Beach Broadband Task Force: “Having Microsoft, Facebook and Telefonica come into Virginia Beach is an exciting development for our city, and it helps us continue our mission of becoming one of the most connected cities in the world.”

Questions, questions. Most transoceanic cables serving North America land in New York and New Jersey. This is a first for the Mid-Atlantic. Just how big a coup for Virginia Beach is this? Will Virginia Beach businesses benefit from higher speed access to Europe? Will access to the two transoceanic cables make Virginia Beach a logical location for the placement of data centers? In particular, are Microsoft and Facebook likely to build data centers there?

Then there are the spin-off questions. How would the rise of a major cluster of data centers in Virginia Beach affect the demand curve for electricity in the Dominion Virginia Power service territory? Would Microsoft and Facebook want access to “green” electricity from solar and wind? Could demand from a cluster of data centers be parlayed into a market for offshore wind?

This development could be a game changer. It bears close watching.

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4 responses to “Could Virginia Beach Become the Next Mecca for Data Centers?

  1. You know, it’s worth observing that your map, above, is a Mercator projection, which is to say, it exaggerates distances at higher latitudes (and understates them near the equator). In fact, the shortest distance between two points on the Globe is a “great circle” route; and on that basis the undersea distance from England to New England is far less than to Virginia. So it’s not surprising that cables to the mid-Atlantic haven’t been built before now. Apparently the advantage of a direct connection between Virginia’s data centers and Europe now outweighs that extra cost. That makes me think the existing cluster of data centers in NoVa is as much the draw for this investment as the potential for more data centers in Virginia Beach — but maybe it’s both.

  2. Not a whole lot of info about the capacity of the cable relative to existing cables – single and in aggregate.

    Are they adding 10% to aggregate existing or doubling or what?

    and even less info as to what that actually means in terms of real capabilities?

    will data move faster or just a lot more data moving at similar speeds and in what things does that mean “better” and in what ways?

    can you send/receive money “quicker”. can you buy or sell stocks quicker? can you send/receive more telephone traffic?

    the thing is – the folks who are paying the money know. They plan on getting their money back and then some – I presume.

    but the rest of us including publications like WSJ seem to be mostly in the dark about what that new cable actually means – in terms of commerce, money, and profits!

  3. Federal law (the Cable Landing License Act of 1921) authorizes the FCC to regulate cable landings in the U.S.A. by granting licenses. The regulation is handled by the International Bureau.

    The website is located at http://transition.fcc.gov/ib/pd/pf/scll.html

  4. The question of where to locate internet data centers has been evolving over time. Not long ago high capacity network costs pushed internet data centers owners to build near Network Access Points (NAPs). A local group of Northern Virginia network businesspeople agreed “over beers” to interconnect their networks and the National Science Foundation declared MAE-East (located under a parking garage in Tyson’s) to be one of the first four NAPs. Loudoun County understood the significance of this and worked between the government and private land owners to pre-authorize and pre-wire sections of the county for high capacity networking into MAE-East. Hence, there are a whole lot of data centers in Loudoun County. There is also no trans-Atlantic cable landing anywhere near Loudoun county.

    I personally believe that data center location today is more dependent on very available, redundant, low cost power. Some data center operators also want “green power” from a PR perspective and because they fear that carbon taxes may arise in the future. They certainly need to be able to access the internet through high capacity networks but as network prices have fallen while power prices have not, power has become more of an issue.

    I applaud Virginia Beach for hoping to take advantage of an opportunity. They will find many jobs constructing the data centers but far fewer jobs operating them. However, the data centers raise the tax base and data centers don’t have children who need to be sent to public school.

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