NSA Scandal May Help Build Cyber-Barriers

[Commentary] The smooth flow of online communication and commerce between Europe and the US is at risk of interruption, thanks in part to naked opportunism on the part of European telecommunications giants. If the governments involved fail to keep online barriers between the continents low, the Internet’s potential to be an engine of global economic growth will be constrained. The snooping scandal at the National Security Agency may help Deutsche Telekom, the largest provider of high-speed Internet access and wireless services in Germany, grow even bigger.

T-Systems International GmbH, the company’s 29,000-employee-strong distribution arm for information-technology solutions, has been losing money selling systems-integration and data-processing services. Now, in response to customers’ loss of trust in American services, Reinhard Clemens, T-Systems’ chief executive officer, says he wants to refocus the company on providing cloud services. Deutsche Telekom has also proposed to help Europe avoid NSA surveillance by creating “Schengen area routing,” a network for the 26 European countries that have agreed to remove passport controls at their borders. Deutsche Telekom undoubtedly thinks that it will be able to collect fees from network operators in other countries that want their customers’ data to reach Deutsche Telekom’s customers -- and that the company has the market power to raise those tolls ever higher. With hundreds of lobbyists in Berlin, Deutsche Telekom can see to it that if any German legislator is asked what to do about the NSA problem, he or she will respond with “Secure routing of traffic.” Surely this secure Schengen area routing would be even smoother if Deutsche Telekom owned more of the telecommunications operators involved.

[Dec 27]