NSA's Lucky Break: How the U.S. Became Switchboard to the World

From Wired.com:

A lucky coincidence of economics is responsible for routing much of the world's internet and telephone traffic through switching points in the United States, where, under legislation introduced this week, the U.S. National Security Agency will be free to continue tapping it.

Leading House Democrats introduced the so-called RESTORE Act (.pdf) Tuesday that allows the nation's spies to maintain permanent eavesdropping stations inside United States switching centers. Telecom and internet experts interviewed by Wired News say the bill will give the NSA legal access to a torrent of foreign phone calls and internet traffic that travels through American soil on its way someplace else.

But contrary to recent assertions by Bush administration officials, the proportion of international traffic entering the United States is dropping, not increasing, experts say.

International phone and internet traffic flows through the United States largely because of pricing models established more than 100 years ago in the International Telecommunication Union to handle international phone calls. Under those ITU tariffs, smaller and developing countries charge higher fees to accept calls than the U.S.-based carriers do, which can make it cheaper to route phone calls through the United States than directly to a neighboring country.

"Carriers shop around for the best price for termination," says Stephan Beckert, the research director at Telegeography, a communications-traffic research firm.

The United States, where the internet was invented, was also home to the first internet backbone. Combine that architectural advantage with the pricing disparity inherited from the phone networks, and the United States quickly became the center of cyberspace as the internet gained international penetration in the 1990s.

In those early days, internet traffic from one Asian country often bounced through the first West Coast internet-exchange point, the San Jose-based MAE West, says Bill Woodcock, the research director for Packet Clearing House, which helps create packet-exchange points around the world.

While nobody outside the intelligence community knows the exact volume of international telephone and internet traffic that crosses U.S. borders, experts agree that it bounces off a handful of key telephone switches and perhaps a dozen IXPs in coastal cities near undersea fiber-optic cable landings, particularly Miami, Los Angeles, New York and the San Francisco Bay Area.

Miami sees most of the internet traffic between South America and the rest of the world, including traffic passing from one South American country to another, says Bill Manning, the managing partner of ep.net. "Basically they backhaul to the United States, do the switch and haul it back down since (it's) cheaper than crossing their international borders."

And some internet traffic traveling from Asia to Europe still crosses the entire breadth of the United States, entering in Los Angeles and exiting in New York, says Woodcock.

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