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December 18, 2013

Major Tech Firms Buying Up Internet Infrastructure

The days of telecom companies ruling the Internet backbone may be coming to an end as key players like Google and Facebook expand efforts to invest in infrastructure.

Much to the dismay of major telecom corporations, companies that got their start thanks to the success of the web are now investing time and money into the fiber optic lines that span the globe and connect users.

As the Wall Street Journal reports, companies like Amazon, Microsoft, Facebook and Google are striking deals and funding projects to enhance Internet bandwidth and speed.

Google, for example, now controls more than 100,000 miles of fiber-optic cable around the world – more than twice the size of the network operated by Sprint Corporation. Facebook also owns new dark fiber cables throughout Europe and is only going to expand its reach.

The news is bittersweet for telecom companies who, without investments from other sources, probably couldn’t keep up with the soaring demands for Internet from around the world.

“On one hand, the projects are bringing a fresh source of investment to an industry dogged for more than a decade by falling prices and excess capacity,” Says the Wall Street Journal. “But the industry is already grappling with the concern that it will be reduced to “dumb pipes”—simple conduits for valuable traffic. The current trend, they fear, could downgrade companies even further to mere builders of those pipes.”

Google is one company that has undoubtedly helped with this problem. The technology giant has invested hundreds of millions of dollars and laid thousands of miles worth of cables. According to the Journal, it’s also ” aggressively acquiring contracts for bandwidth, often presenting prewritten contracts and eschewing protracted negotiations.”

Microsoft, it reports, is also expanding its cloud-computing services that require its own fiber networks. The same goes for Amazon.

But, times are changing, points out Michael Murphy, president of Newton, Mass., telecom consulting service NEF Inc., and companies like Amazon and Google will only continue to invest to help their companies grow.

“If you’ve got enough money and enough bandwidth requirements,” he told the Journal, “at some point it makes sense just to build it.”


Megan Abraham is a staff writer for SiteProNews.