Above, the Normand Clipper, built in 2001 and owned by Global Marine Systems of the United Kingdom, which installs and maintains undersea fiber-optic cables around the globe.

Hawaii’s internet future depends on existing Jones Act exemption

by Jonathan Helton, Grassroot Institute, August 28, 2023

If you would like to prevent Hawaiian Telcom from upgrading Hawaii’s broadband infrastructure under a recently awarded $37 million federal grant, then you just might be a supporter of the Jones Act.

The Jones Act, you see, requires that all ships engaged in “coastwise trade” be U.S. built and flagged and mostly U.S. crewed and owned. And at least one federal lawmaker thinks that law should be applied to cable-installation ships as well.

Specifically, Jones Act stalwart U.S. Rep. John Garamendi of California proposed a bill late last year called the “Close Agency Loopholes to the Jones Act” that would make it much harder, if not impossible, for foreign cable-installation vessels to operate in U.S. waters — as they have been already for decades.

That’s because there are no Jones Act-qualified cable-installation ships that could take their place. As a result, the ships that have traditionally installed undersea cables between the islands have been foreign-flagged vessels, registered in countries such as the United Kingdom and Marshall Islands. These ships provide critical services around the world. 

Without their services in Hawaii, you could pretty much kiss Hawaii Telcom’s broadband infrastructure upgrade goodbye and deny Hawaii residents the opportunity to have improved internet service throughout the islands.

The fact that the Jones Act does not apply to cable-installation ships goes back to before 1989, when the U.S. Customs and Border Protection wrote to an AT&T subsidiary that installing undersea cables or pipeline did not constitute “coastwise trade” under the Jones Act.

“Such cable is not only laid, and not ‘transported,’ between points in the United States, but is also being used in furtherance of the primary mission of the cable laying vessel and is therefore similar to vessel equipment,” the agency said. 

In other words, cable-installation ships are exempt from the Jones Act. If they were not, Hawaii’s internet future would languish and its remote island communities would remain stuck with subpar service, shutting their residents out of many online jobs, telehealth meetings and other important uses.

Even if U.S. shipyards were to start building cable-installation ships, U.S. companies would have to wait for years for them to be built — if they would be built at all — and they likely would cost at least many times more than ships built internationally.

One way or the other, Hawaii residents would have to bear even higher economic and social costs — if Jones Act supporters were to succeed in forcing cable-installation vessels under the Jones Act umbrella.

Ultimately, the question worth asking is: How restrictive should the Jones Act be?

If there are no Jones Act-qualified ships available to safely install internet cables — or move Hawaii cattle to the mainland, or ship liquid natural gas from the mainland to Puerto Rico — are we supposed to just suck it up and forget about it? 

If foreign ships can safely and reliably perform all these functions — and at a reasonable cost —  what purpose exactly is it serving to deny them the opportunity to do so?

Clearly, our federal representatives should be focused on reforming the Jones Act to make it flexible and useful for our needs of the 21st century, not making it more restrictive to make our lives more difficult and costly.

So far, the bill to extend the Jones Act to cable-installation ships  has gone nowhere. Let’s hope it stays that way. Hawaii’s internet future depends on it.