An internet cable coiled into a Gordian knot
04 September, 2015
An internet cable coiled into a Gordian knot
The underwater war: Who will get hold of Georgia’s 1200-km-long internet cable?

News about the internet provider Caucasus Online (CO) being for sale first became known when a bid was made in the Georgian National Communications Commission on merging of Silknet and CO. Later, a proposal was submitted by Magticom to procure the internet retail service of CO. It has also recently become known to Kviris Palitra newspaper that an Azeri business is interested in purchase of the massive internet
cable owned by CO. Aside from having a lot of financial weight, the 1200-km-long cable which Georgia uses to receive the internet connection from Europe and then supply it to Azerbaijan and Armenia may become a powerful tool of information control in the hands of a politically interested party. In addition, alienation of CO may result in a big political scandal.

Caucasus Online provides 85 percent of Armenian, 50 percent of Azerbaijani and 55 percent of Georgian internet via this cable. Therefore, it’s only natural that Azerbaijan has shown interest in it – if utilized fully, the cable can prove very useful and bring great profit. Besides, 85 percent of Armenia’s internet will become dependent on Azerbaijan, which would allow it to control a lion’s share of the country’s dataflow.

As a reliable source has informed the newspaper, Silknet and CO do not really plan on any kind of unification. The most likely scenario actually features CO getting divided into two parts – its subscribers will become relegated to Magticom, while the most valuable possession – the underwater cable itself – will end up in Silknet’s hands.

The cable lies at the Black Sea bottom and provides an internet connection directly from Europe. Caucasus Online provides 85 percent of Armenian, 50 percent of Azerbaijani and 55 percent of Georgian internet via this cable. Therefore, it’s only natural that Azerbaijan has shown interest in it – if utilized fully, the cable can prove very useful and bring great profit. Besides, 85 percent of Armenia’s internet will become dependent on Azerbaijan, which would allow it to control a lion’s share of the country’s dataflow.

As we have been informed, Azerbaijan’s bigest internet provider Azeronline is interested in purchasing the fiber-optical cable. Like the vast majority of the country’s large companies, it is government-affiliated.

At this stage, as they say at the Communications Regulation Commission, nobody except for Magti and Silknet has applied for purchase of Caucasus Online so far. Representatives of CO have left Kviris Palitra’s questions on the issue unanswered.

We have also discovered that the Azerbaijani side (in particular, a company associated with the Aliyev family) expressed interest in purchasing the cable in 2007, when it was not yet installed at the Black Sea bottom and the process was just beginning.

Apparently, the Azeris offered then-owner of Caucasus Online Mamia Sanadiradze a massive amount of money in exchange for half of the cable, but the businessman had other plans. He wanted to use the cable to provide internet to the Middle East in addition to the Caucasus countries, but the company was appropriated by then-President Mikheil Saakashvili’s associates and Sanadiradze still fights to get his property back.

In conclusion, it needs to be said that while it is profitable for Silknet to have its own internet connection source because the company is currently purchasing it from Turkey at a rather high price, there exists one important catch. The fiber-optic cable provides not only the internet, but the phone connection as well. If an agreement between two interested parties is reached, there exist approbated schemes to make it impossible to trace the calls made abroad. On one hand, nobody can register their price and impose taxes accordingly, and on the other, such communication loopholes make secret information exchanges possible.
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