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Tuesday, December 17, 2013

Tech Giants Invest In Internet Infrastructure

Google, Facebook and other major technology companies are boosting their efforts to control Internet transmission networks. They’re building private fiber-optic cables across the world, rivaling telecom companies like Verizon and Sprint.

According to the Wall Street Journal, Google began to build its network in 2008, long before the National Security Agency data mining scandal broke.

Tech executives say they’re building their own cable fiber networks to keep costs down and improve services as online traffic continues to grow.

The Wall Street Journal’s Jason Bellini joins Here & Now’s Robin Young to discuss the infrastructure investments.

Guest

Transcript

ROBIN YOUNG, HOST:

From NPR and WBUR Boston, I'm Robin Young. This is HERE AND NOW.

Google, Amazon, Facebook, Microsoft are expanding to build their own Internet infrastructure, and this is being watched closely by the telephone companies who now sell these services to the tech giants. Wall Street Journal reporter Jason Bellini has been following this story. He joins us every Tuesday.

And, Jason, explain more about what this means for people who aren't thinking much about infrastructure. What kinds of things are companies like Google wanting to do that they didn't do previously? And we know Google started expanding in this way in 2008.

JASON BELLINI: That's right, Robin. Well, right now, we really don't have to think about it that much, as the end user. This is really about corporate giants and their strategies, and a shifting balance of power between the largest Internet companies - we're talking about Microsoft, Google, Facebook - and their relationship with the traditional carriers of their content, these telecom companies.

And now, you've got Google, that's been putting hundreds of miles, thousands of miles of undersea cables. Right now, it's just dark fiber, which means that there's nothing going through much of that fiber, but they're getting themselves ready so that they can be able to be their own service provider.

YOUNG: Yeah. And these are the cables that were owned previously by phone companies. And your paper writes that this is raising tensions with telecom companies about just who runs and owns the Web.

BELLINI: Well, that's exactly right. I mean, from the telecoms' perspective, this means a potential loss of big customers. And it really does upend the traditional model in which these telecom companies charge firms - like Google, and like all the others, Netflix - based on the volume of their use, rather than signing long-term leases for the entire fiber lines.

But you've got Google, Facebook and the rest, and they see the consumption that we're doing right now of video, of photos, these types of activities that take massive amounts of bandwidth, and so they're gearing up to own their own property so they don't have to rely on the telecoms anymore and they can set the price themselves.

And they're also really driving towards getting themselves lines into Asia. That's where they see enormous growth opportunity. The number of Internet users in India doubled to 200 million in just the past two years. And they know that these are really data-hungry parts of the world.

YOUNG: Well, does anything - any of this have anything to do with government surveillance? We know some of these top tech companies met with President Obama today, asking him to back off on some of the surveillance of domestic American information that uses their services to gather information. And phone companies, we know, have court orders to cooperate with the government. And right now, Google might be tied to a Verizon, for instance. Is this about separating themselves so that they can avoid government surveillance?

BELLINI: Well, none of these companies that are putting their own fiber have said on the record that that's what this is about. And indeed, some of this work began long before this NSA scandal came to light. And, you know, as you pointed out, that it's downstream in the back - under the ocean, places where we don't know that NSA was able to tap into data from companies like Google, not at the source itself.

And so this potentially could take them off of that grid that's now being used by the NSA. But how that would work, what the NSA's next move would be, that's really too soon to tell.

YOUNG: Well - and what does it mean for the user, people like me who do not think about cables? What does it mean?

BELLINI: Well, you know, what it really is about these days is how much we're going to be paying for our Internet consumption. And the prices have been going up, and most service providers now put caps on how much data you get and how much they charge for that. So Google itself is trying to get in the game by laying down fiber that could go to your home.

Now, there are only three cities - Austin, Provo, Utah, and one other - I can't remember - that they now - oh, Kansas City - where there's Google fiber now available. But you've got to imagine that they're making wider plans than that, and they're offering people the possibility of getting data that's 100 times faster and cheaper. So that, of course, could really upend this industry.

YOUNG: Jason Bellini, of The Wall Street Journal, thanks, as always.

BELLINI: Thank you.

YOUNG: It's HERE AND NOW. Transcript provided by NPR, Copyright NPR.


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