A Washington company, plunging into the increasingly competitive international telecommunications market, has proposed building the first privately owned transatlantic fiber-optic cable network to carry voice and data communications between the United States and Europe.
Tel-Optik Ltd., a new firm, plans to build the proposed $600 million system, called Market-Link, in partnership with London-based Cable & Wireless Ltd., a billion-dollar multinational telecommunications company that manages dozens of phone networks around the world. The company has requested Federal Communications Commission approval for the service.
If approved, the Market-Link system would compete with Intelsat's international satellite network and American Telephone & Telegraph's existing transatlantic cable system, as well as a new fiber-optic cable planned by AT&T.
"We feel there will be a demand for capacity for international communications of all sorts, including services we haven't yet seen," said Kalmann Schaeffer, Tel-Optik's president and a former FCC official. "We are shooting to the high-speed-data market, innovative services such as teleconferencing, and computer-to-computer communications."
The company plans to install two fiber-optic cables, said Schaeffer. One would begin carrying signals in June 1989; the other in June 1992.
The service also would compete with a transatlantic fiber-optic cable to be built by AT&T and the European telephone systems and scheduled to go into operation in 1988.
The Tel-Optik application underscores the new competition in international telecommunications. The Reagan administration has encouraged private enterprise initiatives in both domestic and international telecommunications services. Last September, Orion Satellite Corp., a Washington company, proposed to launch a satellite network to compete with Intelsat, the international consortium that has a virtual monopoly in overseas satellite services. The FCC has yet to process Orion's application.
Intelsat has vigorously opposed Orion's proposal and similar efforts to launch competing satellite services. Transatlantic cable, however, falls outside the multilateral treaties that give Intelsat its monopoly, said David Markey, the assistant secretary of commerce for telecommunications and information policy.
"By approving the cable, the government can show that indeed it is committed to competition as long as there is no complication with international agreements," said Tel-Optik's Schaeffer.
But the application for a license would have to be considered in light of AT&T's transatlantic cable plans, said James Ball, chief of the FCC international facility division. "Competition . . . would have to be considered. . . . This is the first filing we've ever had for a private cable system of this nature, so how we apply our pro-competitive policy remains to be seen," he said.
Rick Brayall, a spokesman for AT&T, voiced concern with "the vast amount of capacity that will be created out there if those two Tel-Optik cables go into effect," but said the company would not oppose Tel-Optik's plans at this time. "We have expected competition in the international marketplace, and it's going to happen. We feel we are ready to take it on and welcome the challenge," he said.
Some analysts are skeptical of the proposed network. "AT&T, which controls 60 percent of all calls in the U.S., and MCI, neither one have an economic interest in using it," said Robert LaBlanc, president of LaBlanc Associates, a New Jersey-based consulting firm. "GTE owns a chunk of the earth stations that use the Intelsat system. Cable & Wireless is obviously rolling the dice to see if they can get a piece of the action, and that's a pretty expensive way of doing it."
However, Joseph Couch, director of technology for Cable & Wireless Ltd. in London, said the company had already lined up several customers for the service and would have little problem filling its capacity.
Tel-Optik's Schaeffer said financing for the venture would be forthcoming from Cable & Wireless, which will jointly develop and maintain the system, and from the E. F. Hutton Group Inc., a 25 percent owner in the venture.