Where the Heck Is Svalbard?

Welcome to your newly relocated office: fully furnished with some of the widest Internet bandwidth available, one of the lowest tax rates on earth, and spectacular views of one of the largest areas of pristine wilderness in the world. (Note: Acceptance of this offer will mean working in total darkness for four months out of the year.)

Many easily accessible and populated sections of the globe still aren't wired with broadband. But Svalbard--an ice-packed archipelago (the island of Spitsbergen is the largest) in the high Arctic, around 500 miles north of the Norwegian mainland and less than 600 miles from the North Pole--is about to become one of the world's best connected business locations.

When a switch is flicked this fall, two undersea fiber-optic cables will deliver ultrafast Internet access to the 1,700 people in Svalbard's capital, Longyearbyen. The twin cables run 800 miles along the bed of the Arctic Ocean, at depths reaching almost 10,000 feet. That makes them some of the deepest plowed cables in the world, and the only known undersea cables beneath ice.

The project's $50 million tab is being paid by Norsk Romsenter Eiendom AS, a wholly owned subsidiary of the Norwegian Space Center (NSC). What for? At 78 degrees north, Svalbard's proximity to the North Pole makes it ideal for collecting satellite data: From Svalbard's satellite station, the NSC can view all 14 daily circuits of polar-orbiting satellites. The NSC has been supplying NASA with satellite data since 1999. Now, rather than waiting for satellites to relay weather information to NASA and other customers, the NSC can send transmissions, via its undersea cables, at speeds approaching real time--up to 1,280 gigabits per second.

Networking Svalbard is a personal triumph for Rolf Skaar, the 62-year-old CEO at NSC's Oslo headquarters. "The original plan was to install one cable, but because we found ourselves in a buyer's market, we were able to purchase two," he says. "We had to seize the moment while the telecom market was depressed. But we also had to plow and lay the cables quickly--after the ice had gone but before the autumn gales set in." That allowed a construction window of just six months.

Since its discovery in 1596, Svalbard has been doggedly exploited for its natural resources by Norwegian and Russian mining companies. Mining remains the central activity, but research and science are growing in importance. Longyearbyen--named after a Boston industrialist who first mined coal there 100 years ago--is now home to an Arctic studies university, which is attracting hotels and restaurants.

Perhaps that's just the beginning. Local leaders hope their newfound connectivity will make Svalbard a prime business destination. Telenor Svalbard, the local telecom supplier, talks of piping high-speed Internet access, up to 30 digital TV stations, and movies-on-demand to 980 homes around the island. "We'll pay for the running of the cable, but we couldn't have brought that to Svalbard on our own," says CEO Vejard Gjerde, who hopes business customers will be able to buy bandwidth of up to 155 megabits a second. (Average bandwidth for corporate customers on the mainland is about one megabit.) "We want to make Longyearbyen a technological showcase and attract businesses," Gjerde says. "I don't know of anyone who's been to Svalbard who hasn't wanted to come back."

Of course, corporate settlers would have to reckon with polar bears that weigh up to 1,500 pounds and can sprint at more than 20 miles per hour. And nearly two-thirds of Svalbard's 24,000 square miles are occupied by glaciers. While the tail end of the Gulf Stream makes it relatively warm, temperatures in the short summer of 24-hour daylight rise only a few degrees above freezing.

On the other hand, relocating workers could enjoy the Northern Lights, three national parks, and all that fantastic scenery. Thanks to a 1920 treaty that gave more than 40 countries equal rights to exploit Svalbard's resources, the archipelago has its own income tax laws and corporations pay a flat rate tax of 10%. A lack of ozone means Svalbard is an excellent place to get a suntan. And the connectivity? Well, the connectivity will be just fine, all year round.

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