Snowden Heat Burns Verizon In Germany

June 27th, 2014 by · 5 Comments

Is it a symbolic move or the start of a pattern? With yesterdays’s news came the most direct response from a European government to the telecommunications industry in the wake of the NSA/Snowden revelations. Verizon’s German subsidiary has lost a contract for internet access and other services with the German government over the issue, with reports about German sources tying it directly to fears over further potential spying.

For its part, Verizon says its subsidiary operates under German law and has, well, nothing to do with any of this. But they are aware, as are we all, how hard it is to prove such a thing in the murky world of espionage. Once suspicions are raised, they tend to hang around.  The downside of being an industry giant associated with one country, like Verizon or AT&T, is that in situations like this you have a big target on your back whether you did anything or not.

In China, even minor international events have sometimes resulted in protests against corporations associated with a country that has offended. The French supermarket chain Carrefour once got boycotted in Beijing for a week over a slight of sorts that had nothing to do with them, and that ongoing dispute over that island between Japan, Taiwan, and China has resulted in random attacks on Japanese-made cars. The European response to the Snowden affair makes at least a bit more sense than those, but it’s still more of a symbol than an actual security measure.

Was this a one-time European warning shot off the US telecommunications industry’s bow? Or was it the start of a flood of similar contract cancellations? Actually, I’m thinking it may be the former. The possible repercussions of a full blown trade war in the telecommunications world don’t bear thinking of. There’s too much interconnection to untangle, too many things to break along the way, and not enough actual security to gain by it.

US-based carriers and tech giants have spent quite a bit of effort over the past year trying to reassure global customer bases that they can in fact be trusted with the data they carry. Some of that has been through upgrades and some of it through a shift in operational attitude.  But whether it was lost via their own actions, by the nefarious deeds of the NSA, or by the traitorous leaks of Snowden, the damage is what it is.  Reputation is an easy thing to lose, and a hard thing to rebuild.

And that loss of reputation that their European competitors now have an arrow in their quiver that for now is hard to defend against when going after or defending deals like the one Verizon lost yesterday. European companies generally aren’t subject to whatever laws or unwritten patriotic pressure by the NSA or any other US source, and hence can be trusted more when it comes to suspicions of future US spying. That doesn’t cover spying by anyone else, nor perhaps is it much more than a fig leaf when it comes to a determined effort by would-be spies.  But it may still be effective enough to win more deals than they would have otherwise, at least for a year or two.


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Categories: ILECs, PTTs · Security

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5 Comments So Far

  • Anonymous says:

    Although it was, most likely, symbolic, it’s a meaningful rebuke.

    That said, Verizon (the US version) will find a way for the US Gov’t to keep them whole for the lost revenue. With the blessing of the WH and the House and Senate committees overseeing the NSA’s Hoovering of its citizens and the world’s private data, Verizon will simply raise the price for those services. And “[w]e the people” will pay the tab because we keep reelecting the very individuals that created and sustain the specter of the boogie man.

  • “the traitorous leaks of Snowden”? I liked your writing for it’s technical accuracy. Hopefully this was just a slip.

    • Anonymous says:

      regardless what you think of him, or the hyperventilating overreactions to his revelations, the term traitor is definitionally and technically quite accurate… so whats the issue?

    • Rob Powell says:

      FWIW, I was being purposefully hyperbolic. Any time I use the word nefarious in the prior sentence, that’s probably going to be the case. 🙂

  • Anonymous says:

    Faulting VZ for taking and bilking from the US gov’t every penny it can extract for its role in collecting, storing and transferring US citizens personal and private data is like blaming World Cup soccer players for taking dives to elicit penalties, earn penalty & free kicks and win opponent yellow & red cards. (Don’t hate the playa’, hate the game.)

    Lest we forget VZ, T, CMCSA, etc., owe their allegiance to their shareholders first, not American citizens. If the USG wants to provide them with another source of revenue and earnings, they should happily take it.

    Of course, the strategy of engaging in these practices did carry some risks and could have backfired on these companies had the American people expressed any outrage over the activity, voted out of office the very politicians behind the programs and held these companies accountable for their 4th amendment violations.

    Meaningful outrage hasn’t happened yet and not likely to happen any time soon. In the grand scheme of corporate risk, hitching your wagon to the American gov’t which has the largest PR machine in the world made perfect sense (or cents). The highly sophisticated surveillance industrial complex (SIC) can scare up fear in enough people with a simple credible threat whenever called upon to do so.

    The only takeaway for politicians, the NSA and the SIC from the revelations of the 4th amendment violating spying programs is the absence of any meaningful outrage. They all expected much more. Now that they know the American people don’t really mind, it’s safe to say we’ll see much more of it.

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