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BloombergBusinessweek October 14, 2019W
henhediscoveredthatthe ship’s
underwaterplowwasstuckatthe
bottomoftheArcticOcean, 50 miles
off Alaska’s coast, Frank Cuccio
thoughtof Ernest Shackleton.In
October1915,theBritishexplorerwas
forcedtomakea desperateescape
fromtheAntarcticafterpackiceandfloescrushedhisship,
theEndurance. ThevesselCucciowasaboard,theIledeBatz,
hadbeenlayingfiber-opticcablealongtheinhospitableroute
knownastheNorthwestPassage.ButtheIledeBatz’s 55-ton
excavator,whichhadbeencuttinga trenchforthecable,had
dugtoodeepinthehard-clayseabed.If theydidn’tunclenchit
fast,theoceansurroundingthemwouldsoonfreeze.“Irealized
wedon’thavetimetofoolaround,orwe’regoingtogettrapped
ina Shackletonsituation,”Cucciorecalls.“Theweatherwas
gettinguglier,andothershipshadbeengoneforweeks.”
CuccioworkedforQuintillionSubseaHoldingsLLC,a tele-
communicationsstartupinAnchoragethatwastryingtobuild
a trans-Arcticdatacableit saidwouldimprovewebspeedsfor
muchoftheplanet.Thisideacaptivatedthepublic,butby
thetimetheIledeBatz’s plowgotstuck,inSeptember2017,
thecompanywasstruggling.Co-founderElizabethPiercehad
resignedaschiefexecutiveofficertwomonthsearlieramid
allegationsoffraud.
Piercehadraisedmorethan$270millionfrominvestors,
who’dbeenimpressedbyherabilitytosignupmajortelecom
servicescontracts.Theproblemwasthatthepeopleonthe
othersideofthosedealsdidn’trememberagreeingtopayso
much—or,insomecases,agreeingtoanythingatall.Aninternal
investigationandsubsequentfederalcourtcasewouldeven-
tuallyrevealforgedsignaturesoncontractsworthmorethan
$1billion.Ina statementaboutthecontroversy,a Quintillion
spokesmansaid,“TheallegedactionsofMs.Piercearenot“The dream of a Northwest Passage makes sense
on paper. But it’s so hard to get funding”
aligned with how Quintillion conducts business. Quintillion
has been cooperating fully with the authorities.” Pierce,
through her lawyer, declined to comment.
The company resolved the Ile de Batz crisis, coordinat-
ing with Cuccio and dozens of partner engineers and divers
to hoist the plow from the depths. But it’s unclear whether
Quintillion’s business will find momentum again. Pierce is
serving a five-year prison sentence after pleading guilty to
one count of wire fraud and eight counts of aggravated iden-
tity theft. The U.S. Department of Justice has said it believes
nearly all the investment capital she secured was acquired
fraudulently. The company is trying to repair its reputation
while planning the extension of its internet pipeline from
Asia to Europe. “I don’t care what Elizabeth’s original plan
was,” says George Tronsrue, the interim CEO. “Short of theheadlinesshegrabbedwithherbadbehavior,she’sirrelevant
to Quintillion’s future.”
Much of Pierce’s behavior, though, wasn’t so different
from that of other tech founders and CEOs who promised vast
rewards right over the horizon. A Bloomberg Businessweek
review of hundreds of pages of court documents, as well as
interviews with three dozen people familiar with Pierce’s
Quintillion fraud, suggest that her ability to conjure up a
Shackleton-esque vision of achieving the impossible proved as
captivating as her forged signatures. “Elizabeth was so com-
mitted to making Quintillion successful that she just dreamt all
this shit up,” says a former company executive, who, like many
sources, spoke on the condition of anonymity for fear of retalia-
tion. “The question is not why Elizabeth did it, but rather, how
did she think she’d get away with it?”Arctic fiber has been an entrepreneurial fantasy for decades.
Soaring demand for broadband helped drive companies, includ-
ing Google, Facebook, and Amazon.com, to spend tons on high-
speed underwater cables that keep customers watching Netflix
and YouTube with minimal delay. But many of those lines run in
parallel in the Atlantic and Pacific along well-established ocean
routes, leaving the world’s internet vulnerable to earthquakes,
sabotage, and other disasters both natural and human-made. A
trans-Arctic route would help protect against that while offering
a shorter path, potentially making internet speeds much faster.
From Quintillion’s inception in 2012, Pierce focused her
ambitionsonherhomestateofAlaska.Thestate’ssatellite
internetwasslowandexpensive.Inthelower48,connections
approaching 1 gigabitpersecondhoveraround$70a month.
Rural Alaska customers could pay double that for dial-up
speeds. “If you wanted to watch Game of Thrones, you’d be
better off getting a friend to record it on a CD and mail it,” says
Quintillion engineer Daniel Kerschbaum.In theory, this meant a big opening, particularly as cli-
mate change warmed open more paths for construction in the
Arctic. Pierce and her co-founders, who all had experience
working at Alaskan telecom companies, figured they could
develop faster, fiber-based broadband and then sell it whole-
sale to local internet service providers. The team spent most
of 2013 conducting research, assessing environmental con-
cerns, and negotiating cable routes with indigenous tribes.
Even without completing any intercontinental routes, wir-
ing Alaska for fiber would end up requiring 14 ships and 275
government permits and right-of-way authorizations. “The
dream of a Northwest Passage makes sense on paper,” says
Tim Stronge, vice president for research at the consulting
company TeleGeography. “But it’s so hard to get funding.”
After Pierce met a Canadian father-son entrepreneur