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Following security concerns from US officials, it has been announced that Google and Facebook have scrapped plans for a giant subsea cable from Los Angeles to Hong Kong.
The Pacific Light Cable Network (PLCN) was first announced in 2016, with backing from Google, Facebook and other companies including Pacific Light Data Communication and TE SubCom.
The PLCN is a high-capacity fiber-optic undersea cable running for approximately 12,800km under the Pacific Ocean between Hong Kong and Los Angeles. In 2016, Google said that the PLCN would have an estimated capacity of 120TB per second, making it the highest capacity trans-Pacific route.
“In other words, PLCN will provide enough capacity for Hong Kong to have 80m concurrent HD video conference calls with Los Angeles,” the company said at the time.
The 12,800 km long cable has already been laid, costing hundreds of millions of dollars. However it needs permission from the US Federal Communications Commission (FCC) in order to operate.
Breakdown of plans
A US government committee, known as Team Telecom, raised concerns about Dr. Peng Telecom and Media Group’s involvement, citing its "relationship with Chinese intelligence and security services".
While Google and Facebook can be considered the most high-profile stakeholders, much of the cable’s fiber optics belong to Pacific Light Data Communication, which is owned by Dr. Peng Telecom.
In light of these concerns and the delays they were causing, Google sought permission from the FCC to activate only the self-owned portions of the subsea cable network in February 2020, effectively cutting Pacific Light Data Communication from the project.
In April of this year, Google were awarded temporary authority for construction and testing. The FCC said it would allow the company to operate the segment of cable between the US and Taiwan – but not Hong Kong – for six months, pending a final disposition of the license application.
However, as tensions between the US and China continue to grow, it became increasingly likely that US officials would reject the use of the cable on the grounds of national security.
What’s happening now?
While the special temporary authority wasn’t due to expire until the end of September, Bloomberg reported a few weeks ago that Google and Facebook have dumped their original plans for a subsea cable between the US and Hong Kong.
Instead, the companies submitted a revised proposal that incorporates the links to Taiwan and the Philippines, but crucially leaves out Hong Kong-based Pacific Light Data Communication.
A spokesperson for Google told the BBC: “We can confirm that the original application for the PLCN cable system has been withdrawn, and a revised application for the US-Taiwan and US-Philippines portions of the system has been submitted.
“We continue to work through established channels to obtain cable landing licenses for our undersea cables.”
While the fight to use the PLCN drags on, Google also announced in July of this year that it is building another subsea cable, named the ‘Grace Hopper’ cable, connecting the UK, US and Spain.
The cable marks Google’s first investment in a private subsea cable route to the UK and its first ever route to Spain. Today, 98pc of international internet traffic is carried around the world by subsea cables.
HMD Global, the maker of Nokia brand phones, announced it has raised USD 280 million in new financing from investors including Google, Qualcomm and Nokia. The money will go to strengthening its product offering, including 5G devices and new services, and expanding in new markets, such as Brazil, India and Africa.
The company announced four areas where it plans to invest. First, is affordable 5G smartphones, "with an emphasis on strong partnerships with US carriers".
Second, HMD Global will further transition to digital-first offerings as part of a new post-COVID reality, as well as more consumers buying their phones from internet sellers.
Third, the company plans to expand its presence in key growth markets. This includes the recently introduced operations in Brazil, as well as Africa and India.
Fourth, the investment will help the business strengthen its position beyond hardware and into a "holistic mobile service provider".
This year alone, HMD Global launched its international data roaming service HMD Connect, enhanced its mobile cybersecurity capabilities with the acquisition of Valona Labs assets, and started developing its own software, security and services with a new research and development centre in Tampere, Finland.
It last raised external funds with a USD 100 million round in mid-2018. HMD first started selling Nokia phones in 2016 and has since expanded to 91 markets and shipped over 240 million phones.
Google parent Alphabet has reported a slowdown in first-quarter revenue growth, as the Covid-19 pandemic led to a drop in advertising on the search engine from March. Revenues rose 13 percent year-on-year to USD 41.2 billion, down from 17 percent annual growth a year earlier and in Q4.
The US giant exceeded dim earnings expectations, showing higher revenue and profits despite a coronavirus-induced slowdown in its core advertising operations. Alphabet shares leapt more than eight percent in after-hours trades following release of earnings figures that eased fears the pandemic would stall the internet firm's income engine.
Alphabet reported a profit of $6.8 billion in the first three months of the year, up nearly three percent from last year, on revenue that grew 13 percent to $41 billion. The Silicon Valley giant, the first of the big technology firms to report quarterly results, offered a mixed picture: a strong start to the year followed by an abrupt slowdown in advertising in March and some tentative signs the worst may be over.
Chief financial officer Ruth Porat pointed to "very early signs of recovery in commercial search behavior by users" but added that "it is not clear how durable or monetizable this behavior will be."
Still, the report showed one of the major tech firms weathering the crisis and seeing some hopeful signs in advertising, which represents the lion's share of Alphabet revenue and is closely tied to economic conditions.
"In a quarter of bad news, this was really good news," said analyst Rob Enderle of Enderle Group, who predicted improvement in the digital ad market in May and June.
Baird analyst Colin Sebastian expected the current quarter to be "the bottom" of an online advertising trough at Alphabet, while noting growth in its YouTube and cloud computing revenues.
"This is probably exactly what technology needed at a time when many suspected FANG/Tech could be rolling over," Mark Newton of Newton Advisors said in a tweet, referring to the acronym for the big tech firms Facebook, Amazon, Netflix and Google.
Alphabet executives remained cautious in their outlook, noting that the company is cutting back on hiring, marketing, office expansion and other expenses while continuing to invest in promising long-term trends like companies moving more aggressively to services hosted in the internet cloud.
"It is now clear that once the emergency has passed, the world will not look the same," Alphabet-Google chief Sundar Pichai said during an earnings call.
"Some social norms will change, and many businesses are speaking to us looking to reinvent their operations."
Google services, data centers, and software capabilities are positioned to help with trends in online education, healthcare, entertainment, and shopping likely to continue after the pandemic has ended, according to Pichai.
Overall ad revenues for Google rose 10 percent for the quarter despite the pandemic's worsening in March.
YouTube's ad revenue was up about a third to $4 billion as people turned to online entertainment while they hunkered down at home to avoid the coronavirus.
The pandemic has disrupted operations at tech powerhouses known themselves for disrupting traditional business models.
Fewer people are buying new smartphones; more people are online and using social platforms but online advertising is slumping; cloud computing needs are growing; and more consumers are relying on delivery of essential goods from Amazon.
Along with other tech firms, Google has been highlighting its role in helping consumers and authorities in the battle against COVID-19.
Pichai said that "we've marshaled our resources" to assist people during the crisis.
"Given the depth of the challenges so many are facing, it's a huge privilege to be able to help at this time," he said.
Google has teamed up with longtime rival Apple to develop technology for coronavirus smartphone "contact tracing" by allowing devices from the two platforms to communicate and indicate when people have crossed paths with an infected person.
YouTube said it began adding fact-check panels to search results in the US for videos on hot-topic claims shown to be bogus.
The report showed revenue rose 26 percent to $170 million for Alphabet's "other bets" which include the Waymo self-driving car project, Wing drone delivery and Verily life sciences. But these "moonshot" projects produced a collective operating loss of $1.1 billion.
Orange proceeded to land Google’s transatlantic Dunant cable in Saint-Hilaire-de-Riez, in the Vendée region of France, first and terrestrial stage of the laying of this cable.
This new 6,600 km long submarine cable linking the United States to France, posed by the company SubCom and scheduled to come into service before the end of 2020, is the result of a project combining Orange and Google. The Europe-United States axis is one of the most important submarine routes in the world with a need for connectivity that doubles every second year. Dunant will help to meet the explosion in Internet usage and guarantee ever more efficient connections for Orange and Google customers.
As the “Landing Party” and owner of the French part of the cable, Orange has completely refurbished the historic station in Saint-Hilaire-de-Riez, which was no longer in use, to house the terminal equipment for the Dunant system. This area is a strategic location, close to the main connectivity hubs on this side of the Atlantic. From this landing station, Orange is deploying terrestrial optical fibers in France between Saint-Hilaire-de-Riez and Paris to route its traffic on the Dunant cable to the capital's major data centers and will also provide service to the rest of Europe and major international data centers.
With this deployment, Orange will benefit from two pairs of optical fibers with a capacity of up to 30Tbp/s each, enough to transfer a 1GB video in 30 microseconds. Orange will thus be able to meet the massive growth in demand for data and content exchanged between Europe and the United States for several years to come.
Dunant will be the first submarine cable to connect the United States to France in more than 15 years and will be designed to combine the most advanced technologies from the world's various equipment suppliers. The cable will therefore be able to keep pace with innovation in optical transmission technologies and maintain its performance at the highest level for many years to come.
As a major investor in more than 40 submarine cables, Orange is committed to developing the quality of service of its global network. This new transatlantic project is one of the Group's many operations aimed at providing high-quality services to support its customers in their various uses.
Google’s parent company, Alphabet, reported its fourth-quarter and full-year financial results. The company’s revenue grew from $39.3 billion in 2018 to $46.1 billion in 2019. The firm’s net income also expanded from $8.9 billion to $10.7 billion over the same time frame.
However, the figures, when compared to expectation, were mixed. Alphabet missed revenue expectations in the fourth quarter despite stellar growth at YouTube and in the cloud, earnings figures showed.
Detailing its cloud computing and YouTube revenues for the first time, Alphabet reported that profits rose 19 percent from a year ago in the quarter to nearly $10.7 billion as revenues increased 17 percent to $46 billion.
The company said its cloud computing services took in $2.6 billion in revenue during the last three-month period, up more than 50 percent and nearly $9 billion for the year.
Alphabet and Google chief executive Sundar Pichai touted YouTube as a revenue star at the company, with ad revenue reaching $15 billion last year in an increase of about 36 percent from 2018. YouTube music and television premium services now have more than 20 million paid subscribers, according to Pichai.
Despite assurances by executives that Alphabet sees plenty of money-making potential ahead and is investing to capitalize on long-term trends, Alphabet shares slipped more than four percent in after-market trades that followed release of the earnings figures.
The California tech giant, which dominates online search and makes the Android mobile operating system, has been working to reduce its dependence on the digital advertising which delivers most of its cash.
"Our investments in deep computer science, including artificial intelligence, ambient computing and cloud computing, provide a strong base for continued growth and new opportunities across Alphabet," said Pichai.
Chief financial officer Ruth Porat said Alphabet will ramp-up hiring this year. Much of that will be engineering talent for its cloud division which competes with cloud market-leaders Amazon and Microsoft.
"We are leaning into investing for long-term growth," Porat said. "That has been a key principle here and continues to be," she added.
Google advertising took in the majority of revenue at $38 billion in the quarter, and more than 80 percent of its annual revenues of $162 billion. Colin Sebastian, an analyst at Baird, said the earnings report showed "a deceleration" in growth for Google, which may have been due to the impact of fewer holiday shopping days.
Analyst Nicole Perrin at eMarketer said the results highlight the significance of YouTube, the popular video service for which Alphabet had not up to now disclosed financial data.
"This is something investors have been looking for, but the information should also give advertisers valuable information about the importance of YouTube as a digital ad vehicle," Perrin said.
"YouTube is growing strongly according to this report, and revenues are above where eMarketer had thought they were."
Google founders Larry Page and Sergey Brin have announced they are stepping down from top roles at the online giant's parent company, Alphabet.
Huawei's upcoming flagship Mate 30 smartphone will launch next month without key Google apps, creating a challenge for the Chinese tech giant hit by US sanctions.
A French consumer rights group said that it has launched a class action lawsuit against US tech giant Google for violating the EU's strict data privacy laws.
The Australian Competition and Consumer Commission (ACCC) called for new regulations on Facebook, Google and other tech behemoths which could have far-reaching ramifications on their money-making procedures and their ability to choose which content consumers would consume.
The country’s competition watchdog devised some recommendations which, if confirmed, would be among the most restrictive towards tech giants. These recommendations were created in an effort to limit the power of these tech giants due to global concerns of their influence and various other issues such as anti-trust, privacy abuse and the role they play in spreading discriminatory content and misinforming the public.
The ACCC plans to issue its final report by the end of June, following its 18-month inquiry into the issue. This report is expected to comprise of various proposals pertaining to controls that will be imposed on tech giants which handle a large quantity of personal data to use for marketing purposes such as the use of algorithms to coordinate which advertisements to display to customers, which tailored search results will appear and other tailored content.
In the lengthy preliminary report which was issued in December last year, the ACCC raised concerns about the market power of tech companies like Facebook and Google and how their operations are characterized by a “lack of transparency”, especially with regards to the use of our data.
The report, which was initiated by the conservative government, read,: “We are at a critical point in considering the impact of digital platforms on society.” It also shed some light on the impact the tech giants had on Australia’s new industry.
In fact, it was found that since 2014, two tech titans were receiving a huge fraction of the revenues generated from digital advertising which resulted in the number of newspapers and online journalists falling by over 20 per cent.
“While the ACCC recognizes their significant benefits to consumers and business, there are important questions to be asked about the role the global digital platforms play in the supply of news and journalism in Australia,” read the report.
The competition watchdog stated that it wanted to make sure the big firms did not “favor their own business interests, through their marketing power and presence across multiple markets”.
“There are also issues with the role of digital platforms in determining what news and information is accessed by Australians, how this information is provided, and its range and reliability.”
Rod Sims, ACCC chairman, stated that regulatory authorities In the UK, Europe and the U.S. were monitoring the outcome of their inquiry very closely as they are all still in the process of determining their policies regarding the issue.
Many are of the belief that the ACCC’s recommendations are impractical and a little radical.
Prime Minister Scott Morrison’s government has already begun to take action against the growing influence of Big Tech. This includes enabling criminal penalties for social media execs which allow the spread of violent or hateful content on their platforms.
Head of DIGI, the lobbying group formed by various tech behemoths to deal with the regulator, Sunit Bose, said, “We obviously need really clear rules for the internet that protect privacy, safety, the economic and social benefits of technology while also protecting competition and innovations.”
She also argued that the Australian regulator’s recommendations would hurt Big Tech, as well as start-ups and smaller companies that lack the resources to deal with the new regulations.
“the prospect of having to disclose such sensitive information will serve as a deterrent to global digital companies and start-ups initiating or expanding their operation in Australia,” she said.
US tech giant Google has appealed an EU fine of 1.49 billion euros ($1.69 billion) for unfair practices through misuse of its dominant position, a source close to the case said.