Light Reading
Germany cancels an ISP networking deal with Verizon Germany as part of its post-Snowden overhaul. Are other US deals also in danger?

Verizon's German Deal Could Be Just the First to Fall

Mitch Wagner
6/26/2014
50%
50%

In the first direct fallout for US telecom of the Edward Snowden NSA spying revelations, Germany has canceled a contract with Verizon that covered Internet access and other business services for some of its agencies and transferred that business to Deutsche Telekom AG (NYSE: DT).

Multiple news agencies have reported the decision, following a statement from the German Interior Ministry today, that said the Ministry's internal communications overhaul led to the decision to terminate the Verizon Communications Inc. (NYSE: VZ) deal. That overhaul was prompted by the revelations that the US National Security Agency was requiring US telecom companies to turn over calling records and had access to their networks.

The move by the Germans could be the beginning of a general effort by foreign governments to either take away business from US carriers or prevent them from bidding on future business. This has been an industry concern, not just for telecom service providers but for the broader US tech industry, since Snowden's disclosures led to revelations of information sharing by private companies with the NSA.

For its part, Verizon is stressing the fact that its German subsidiary, which held the government contract, is a German company playing by the rules of that country. That apparently was not enough to prevent the loss of the contract, even though the government agencies being served did not include German security agencies.

Verizon provided Internet services to German government departments, with the current contract due to run out next year, according to a report on BBC.com. The European nation was angered by allegations that the US bugged Chancellor Angela Merkel's phone. Germany announced an investigation earlier this month into those accusations, leveled by Edward Snowden.

While there were no suggestions Verizon was involved in spying on Merkel, the controversy put pressure on US technology companies doing business in Germany, says the BBC:

German Interior Ministry spokesman Tobias Plate said: "There are indications that Verizon is legally required to provide certain things to the NSA, and that's one of the reasons the cooperation with Verizon won't continue".

"Furthermore, the ties revealed between foreign intelligence agencies and firms in the wake of the US National Security Agency affair, show that the German government needs a very high level of security for its critical networks," he said.

Verizon provided Internet services to multiple German government departments, but not security agencies, Plate said, according to the AP, which says "Germany had been reconsidering those contracts for some time." The Snowden revelations increased the heat. Says the AP:

Berlin has also proposed building more secure networks in Europe to avoid having to rely on American Internet companies that manage much of the electronic traffic circulating the globe.

The German government provides details in a written statement, via Google Translate: Government communications is based on two nework infrastructures, "IVBB (Information Network Berlin-Bonn) and IFMGA / BVN (Information Federal Administration / Federal Administrative network) and the federal-state interconnection network (Germany online infrastructure - DOI)." Verizon provides connectivity services for IVBB.

The demands of the network, security considerations such as Trojans, and the NSA revelations, place particularly high demands on the safety of the government's "critical communications infrastructure," the statement says.

Against this background, currently there is a reorganization of information and communication structures of the covenant, which goes beyond a mere modernization of the existing networks.

One of the aims of the reorganization is increased security.

Germany's decision is "one of the most concrete signs yet that disclosures about U.S. spying were hurting American technology companies overseas," according to The Wall Street Journal.

After the Snowden revelations, "Berlin subsequently demanded talks with Washington on a 'no-spy' deal, but these collapsed after the United States appeared unwilling to give the assurances Germany wanted," according to Reuters.

The German goverment said Deutsche Telekom, which will replace Verizon, "was already responsible for the most sensitive communications between ministries or between the government and German intelligence agencies."

Detlef Eppig, head of Verizon's German unit Verizon Germany, told Reuters Thursday:

Verizon Germany is a German company and we comply with German law.

Verizon did not receive any demands from Washington in 2013 for data stored in other countries, the company said.

"The U.S. government cannot compel us to produce our customers' data stored in data centres outside the U.S., and if it attempts to do so, we would challenge that attempt in a court," it added.

The firm declined to comment on whether there had been requests in previous years.

— Carol Wilson, Editor-at-Large, Light Reading and Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to wagner@lightreading.com.

(4)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
6/27/2014 | 2:22:59 PM
Re: Symbolic gesture
There have been various studies showing reluctance to do business with American cloud providers post-Snowden. But it's been difficult to prove definitive harm, and point at specific examples of lost business. Mostly, companies and government's don't say why they didn't award business to one company. Germany is a rare exception here. 
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
6/27/2014 | 2:21:20 PM
Re: Symbolic gesture
Not just a symbolic gesture. Germany is using its money to make its opinions known.
Carol Wilson
50%
50%
Carol Wilson,
User Rank: Blogger
6/27/2014 | 9:56:38 AM
Re: Symbolic gesture
I wouldn't be surprised to see a cascade of similar announcements -- that's assuming US carriers have actually gotten much business from European governments. The bigger impact could be European businesses using this as a reason to avoid multinationals that are based in the US. 
DOShea
50%
50%
DOShea,
User Rank: Blogger
6/26/2014 | 9:39:06 PM
Symbolic gesture
This seems like a highly publicized symbolic gesture, a message sent from the German government to the US government and its telco partners (unfortunately, the best way to describe the telcos' involvement). I wonder now if we're going to see a series of other similar moves elsewhere in the world.
Educational Resources
sponsor supplied content
Educational Resources Archive
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Custom TV
Distributed Access Architectures – 2

10|21|14   |   8:51:00 AM   |   (0) comments


ARRIS CTO Network Solutions Tom Cloonan discusses why many if not most MSOs will continue with integrated CCAP, while addressing why some are also looking at two futuristic, distributed access architectures: Remote PHY and Remote CCAP.
LRTV Custom TV
Distributed Access Architectures – 1

10|21|14   |   9:01   |   (0) comments


SCTE Sr. Director of Engineering Dean Stoneback discusses the pros and cons of distributed access architecture (DAA) and its various forms, which range from basic Remote PHY to full CMTS functionality in the node.
LRTV Custom TV
The WiFi Road to Riches – 2

10|21|14   |   3:58   |   (0) comments


ARRIS Senior Solution Architect Eli Baruch talks about how MSOs can enable public and community WiFi through 1) outdoor access points, 2) businesses seeking to offer WiFi to customers, and 3) residential WiFi gateway extensions.
LRTV Custom TV
The WiFi Road to Riches – 1

10|21|14   |   10:15   |   (0) comments


SCTE Director of Advanced Technologies Steve Harris discusses WiFi deployments, drivers, challenges and advances, including 802.11ac, carrier-grade WiFi, community WiFi, Hotspot 2.0, Passpoint, WiFi-First and voice-over-WiFi.
LRTV Custom TV
Advantech Accelerates 100G Traffic Handling

10|17|14   |   7:56   |   (0) comments


Paul Stevens from Advantech explains why handling 100GbE needs a whole new platform design approach and how Advantech is addressing the needs of equipment providers and carriers to give them the flexibility and performance they will need for SDN and NFV deployment.
LRTV Huawei Video Resource Center
Holland's Imtech Traffic & Infra Discusses Huawei's ICT Solution and Services

10|16|14   |   4:49   |   (0) comments


Dimitry Theebe is from the business unit at Imtech Traffic & Infra which delivers communications solutions for transportations. His partnershp with Huawei began about a years ago. In this video, Theebe speaks more about this partnership and what he hopes to accomplish with Huawei.
LRTV Huawei Video Resource Center
Huawei's Comprehensive Storage Solutions Vital for SVR

10|16|14   |   6:16   |   (0) comments


SVR Information Technology provides cloud services for academic and special sectors. With Huawei's support, SVR and Yildiz Technical University has established Turkey's largest and most advanced High Performance Computing system. CSO Ismail Cem Aslan talks about what he hopes Huawei's OceanStor storage system will bring for him.
LRTV Huawei Video Resource Center
Mexico's Servitron's Impression of Huawei at CCW 2014

10|16|14   |   6:35   |   (0) comments


Servitron is a network operator in Mexico that has been in the trunking industry for the past 20 years. Its COO, Ing. Ragnar Trillo O., explains at Critical Communications World 2014 that his company has been interested in the long-term evolution of LTE technology and its adoption for TETRA.
LRTV Huawei Video Resource Center
Building a Better Dubai

10|16|14   |   2:06   |   (0) comments


Abdulla Ahmed Al Falasi is the director of commercial affairs, a telecommunications coordinator for the government of Dubai. Their areas of service span across multiple industries, including police, safety, shopping malls and more. In this video, Abdulla talks about his department's work with Huawei.
LRTV Huawei Video Resource Center
Huawei Lights Up Malaysia Partner Maju Nusa

10|16|14   |   1:59   |   (0) comments


Malaysia's Maju Nusa is an enterprise partner to Huawei in networking, route switches and telco equipment. At this year's Critical Communications World in Singapore, CTO Pushpender Singh talks about what Huawei's eLTE solutions mean to his company and for Malaysia.
LRTV Custom TV
Evolving From HFC to FTTH Networks

10|15|14   |   2:19   |   (0) comments


Cisco's Todd McCrum delves into the future of cable's HFC plant, examining how DOCSIS 3.1 and advanced video compression will extend its life and how the IP video transition will usher in GPON and EPON over FTTH.
LRTV Custom TV
Exploring the Future of Cable Access

10|15|14   |   6:23   |   (0) comments


Cisco's Brett Wingo looks at where cable access architectures are heading, discussing the impact of DOCSIS 3.1, CCAP, Remote PHY, SDN, virtualization of cable networks and related technologies.
Upcoming Live Events
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
WhoIsHostingThis.com presents six of the world's most extreme WiFi hotspots, enabling the most epic selfies you can imagine.
Hot Topics
Forget the Internet, Brace for Skynet
Stephen Saunders, 10/15/2014
HBO Will Go OTT in 2015
Mari Silbey, Independent Technology Editor, 10/15/2014
Google: Carriers & Cloud Providers Need to Cooperate
Mitch Wagner, West Coast Bureau Chief, Light Reading, 10/16/2014
Could Data Be the New 'Currency'?
Ray Le Maistre, Editor-in-chief, 10/16/2014
iPad Air 2 Lets Users Switch Carriers Any Time
Mitch Wagner, West Coast Bureau Chief, Light Reading, 10/17/2014
Like Us on Facebook
Twitter Feed