Verizon CEO calls for U.S. ratification of Law of the Sea Treaty

Verizon Communications (NYSE: VZ) CEO Lowell McAdam on Thursday urged the Senate to ratify the international Law of the Sea Treaty, arguing that doing so would help provide U.S. carriers clarified rules for building and repairing underwater telecom cables.


The United Nations Convention on the Law of the Sea (UNCLOS), as it is formally known, sets rules for the use of marine natural resources. It was signed in 1982 and came into force in 1994, but was never ratified by the United States.

According to the United Nations, 162 countries and the European Community have signed the UNCLOS treaty.

"Senate ratification of the Convention will provide confidence to U.S. companies that their undersea submarine cable investments are protected by more specific and reliable international law," McAdam told the Senate Foreign Relations Committee, in remarks prepared for delivery.

Verizon relies on 38 undersea cables to for voice, Internet and video data delivery, McAdam said, noting that in 2007, commercial vessels from Vietnam damaged active, international cables in Southeast Asia.

The result, he said: the two affected cables were out of service for about three months, over 106 miles of cable were removed from the seabed and repaired, at a cost of over $7 million.

"It would have been very helpful if the United States, Verizon and other affected U.S. companies had been able to use the Convention to compensate cable owners, arbitrate disputes over service disruptions, and deter future violations," McAdam testified.

McAdam testified at the June 28 hearing of the Senate Foreign Relations Committee, along with Thomas Donohue, president of the U.S. Chamber of Commerce; Jack Gerard, president of the American Petroleum Institute; and Jay Timmons, president of the National Association of Manufacturers.

Critics have warned that ratifying the treaty might compromise U.S. sovereignty, ceding power to the United Nations. Specifically, they argue that the treaty could restrict international movement by the U.S. Navy. Moreover, joining the convention could limit U.S. businesses' access to ocean mineral resources, by agreeing to allow the International Seabed Authority to decide access rights.

The U.S. Chamber rejects the notion U.S. sovereignty would be compromised.

"This treaty promotes our sovereignty, by codifying our property rights in the Arctic and on our extended continental shelf," Donohue told the committee. "It will be ours, people will know it's ours, and we'll have every right to defend it."

Committee Chairman John Kerry (D-Mass.) said he is calling for the treaty's ratification amid support from U.S. businesses, including leaders in the telecom, oil and gas, and manufacturing sectors.

"Our companies want this treaty, simply bottom line, because it affects their bottom lines," Kerry said in a statement. "Our failure to join the Treaty actually forces them to look elsewhere--greater expense, greater uncertainty, and lack of protection of American sovereignty. The status quo is simply not acceptable."

U.S. Secretary of Defense Leon Panetta, too, has voiced his support for ratification, Foreign Policy reported.

In addition to Verizon, ratification is supported by AT&T (NYSE: T) as well as the Telecommunications Industry Association (TIA).

For more:
 - read the  UNCLOS Treaty text
 - read McAdam's written testimony
 - read Kerry's statement
 - see the Foreign Policy article

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