Google Gets Federal Approval To Operate Under Sea Cable Between US and Taiwan To Boost Network Capacity

Alphabet Inc. GOOGL GOOG owned Google has obtained federal clearance to temporarily operate a sub-sea fiber-optic cable between the United States and Taiwan.

What Happened

Google will be able to run a segment of the Pacific Light Cable Network System, which connects the U.S. to Taiwan. Google’s license will last six months and depends on the “final disposition of the license application,” according to a statement released by the Department of Justice.

Google applied for permission to operate the cable on a temporary basis on April 2, 2020. In a blog published on March 26, Urs Hölzle, Senior Vice President for Technical Infrastructure at Google, wrote, “We’ve designed our network to perform during times of high demand.

The same systems we built to handle peaks like the Cyber Monday online shopping surge, or to stream the World Cup finals, support increased traffic as people turn to Google to find news, connect with others, and get work done during this pandemic.” Hölzle said the company continues to increase capacity “wherever needed.”

Why It Matters

Increased demand resulting from the coronavirus pandemic is exerting pressure on Alphabet’s services. YouTube has been made standard definition only, for a period of one month. Outages on the Google Cloud Platform have hit services like Gmail, Snap Inc.’s SNAP run Snapchat, and others, reported CNBC.

Google is not the only company feeling the strain from increased demand made by the stay-at-home public. Others like Netflix Inc. NFLX have cut picture quality to ease pressure on internet providers. Facebook Inc. FB too is facing congestion issues, the company has cut bit rates for videos on its social network and Instagram in India, its biggest market, which is under lockdown, reported Reuters.

What Else

Stay-At-Home workers have been adopting Google’s G Suite, in particular, Google Meet, to stay connected. This has enabled Google to add a million business users in just a month, as of March.

Price Action 

On Wednesday, Alphabet class A shares traded 0.17% higher at $1,209 in the after-hours session. The shares had closed the regular session 2.07% higher at $1,207.

The company’s class C shares traded 0.34% higher at $1,214.34 in the after-hours session. The shares had closed the regular session 2% higher at $1,210.28.