Dismantling public values, one data center at the time

Are the Nordic states too reliant on tech giants to sustain the critical communication infrastructures of the welfare state? This was the question that gathered Nordic government officials, policy makers, media industry and scholars last week in Stockholm. The discussion exposed how the Nordic states are letting go of values and infrastructure resources that are dear to the welfare state – from shared access to public resources to democratic values and universal access to communication and electricity – while intensifying digitalization and dependencies on Silicon Valley companies. The meeting also made apparent the need to create different relations between data giants, local municipalities, and basic societal infrastructure. Big Tech data center developments are exemplary of the problems that these dynamics generate, and the societal stakes at them.

A decade ago the Swedish government stated that “we are open for business” and welcomed Big Tech companies to build their data infrastructures in the country. Today, the Nordics host some of the largest data center facilities in Europe. Just think of Google and their largest European data center in Hamina, Finland or Amazon Web Service’s data center complex stretching across three towns in the county of Sörmland in Sweden – in Katrineholm, Västerås and Eskilstuna.

These establishments have been possible because of the well developed and affordable infrastructure networks in the Nordics. Electricity, water, and communications are equally open and affordable for businesses and citizens. This is a quality and public value that has been an essential part of the idea of building the welfare state and the Folkhemmet.

The infrastructural properties of the Folkhemmet are often taken for granted, and not in need of protection. Yet, the public values of openness, affordability of connection and universal access to infrastructure can make societies susceptible to developments that not only undermine public values, but can create problems that we are not prepared to handle. While Big Tech leverages existing public infrastructures, the promises of progress might turn out to be limiting of local development.If we do not take this seriously, tomorrow we might not have lost only public values of the welfare state, but also access to much of the basic infrastructures which we rely on – like electricity, local economies and the trust in our own institutions.

Pressured electricity grids and the limits of local development in the global backyard of AI

When politicians in the Nordics welcomed Big Tech for business, they hoped that Googles, Microsofts, Amazons and alike would bring jobs, wealth and brand value to struggling municipalities. This was also connected to the hope that they would reinforce the image of Sweden, Finland and Denmark as global tech leaders, and boost their position as the most digitalised countries in the world — something that we, in the Nordics take very much pride in. But instead of boosting this position, the Nordics are turning into the next Big Cheap processing place for the global digital economies. If China remains the place of cheap labor for Silicon Valley innovations, the Nordic countries are today the source of cheap land and cheap renewable electricity for machines needed to produce the new business of Sillicon Valley around data processing and AI. This development brings completely new problems that we are not ready to handle.

In Sweden, Microsoft, Amazon and Facebook have claimed very high amounts of the capacity of electric grids to power the computers in their data centers. These grid capacities are much higher than actual use or need. The energy industry jargon calls this practice “air bookings” (luftbokningar). This means that a lot of the available capacity of a regional electricity grid is reserved by one actor who does not make use of it but keeps the booking indefinitely in order to enable its own further growth in a situation that the whole society needs more energy and particularly green electricity. It also means that the grid capacities reserved by Big Tech are someone else’s lost opportunity to connect to the grid. The immediate problem is that the Big Tech capacity reservations prevent development projects by local municipalities, industries, and households to come to fruition, and practically eliminate competitors — through curtailing access to electricity — and putting Big Tech companies in a position of informal monopolies over the available capacities in a grid in those regions where their data centers are establsihed. These two examples make the point:

– In Skåne, Microsoft booked so much electricity from the grid in the Malmö region that the local Swedish bread company Pågen could no longer build a bread baking factory in the area and had to expand elsewhere.

– In Sörmland, Amazon Web Services has reserved 1/4 of the capacity of the grid in the area of Katrineholm and is currently preventing other data center actors and more job-intense industries to come and establish their businesses. Today, AWS is the largest consumer of electricity in the region, followed – and not closely — by the largest chicken slaughter house in Sweden that slaughters 200 000 chicken per day.1

The “air bookings” and scale of grid capacity reservations has created instabilities in the power grid, the prospect of power cuts for households and the prioritisation for vital service provision in case of shortage of capacity or grid overload. In effect, both Microsoft and AWS are currently engaged in projects to build new power lines and diesel backup generators in order to secure even more access to electricity and grid capacities, entering in conflicts with local farmers and climate-concerned citizens. The scale of their diesel constructions is also huge – AWS are currently planning for building a 600 MW diesel generator in Katrineholm, which is a fossil fuel driven industrial complex with the capacity of a nuclear power production factory.2 This happens while other companies in Sweden are struggling to get on to the grid at all, and while municipalities such as Uppsala can not develop public transport electrification projects because of shortages of grid capacity.

Are we ready to lose local companies, businesses, and non-digital industries in favour of providing storage space and substantial parts of the available electricity to Big Tech giants? Is this trade-off the best and most needed one in light of current developments? And are we ready to pay more for electricity, or face conflicts with citizens about land use because data companies have vacuumed the available electricity and destabilized electric grids built over many years to cater to all citizens?

Evading publicity, dismantling trust

Another Nordic value that is compromised is publicness and trust. Big Tech corporations keep their operation secret. Driven by fear that they might choose another place to build their data centers, we in the Nordics have allowed them to create and normalize a climate of industrial secrecy within a tradition of openness that has taken decades to build. These companies are unapproachable and largely disconnected from the places in which they are built. They refuse to talk to researchers or the public but instead communicate through press releases and YouTube videos, through the platforms that they own. This is perhaps the only industry in Sweden where the public cannot easily know how many people work for them, how much grid, fiber optic and other capacities are they using, or what kind of operations happen in these facilities. They also have the courage to lie about their operations – such as when Microsoft admitted in public that they lied in their official planning documents in Staffanstorp that they would build a conventional wearhouse and not a large scale industrial data center in order to avoid environmental assessment and bypass other construction regulations. “Stock exchange” was their explanation as to why they lied.

This culture of industrial secrecy and lying is unprecedented and strange in a Nordic context where all other industries are expected to operate in a climate of honesty, openness and publicness about their operations – for the common good.

The question that we have to ask is – Why do we have such low expectations of Big Tech to keep up with Nordic values? And why do we fear that they might not choose us if we start to expect more of them? In a curious way, these companies are relieved from obligations, while they benefit from state subsidies and public infrastructure.

So, where to go from here?

We need governing bodies and regulations that can set the limit to data center infrastructures – in scale, size, and public resource consumption. We also need to assess carefully where it is possible and desirable to create data centers with least harms to grids, environment, and community access. It is crucial that data centers do not jeopardize local development opportunities. This requires putting media policies and telecom regulations in conversation with urban and regional development planning policies, and evaluating the impacts of large scale data center and telecom infrastructure on regional development, while regulating them via telecom or other legislation/directives.

We also need to create a code of obligations for these industries to align their operations with Nordic values of publicness. As a society, we could also have greater demands to having a share of their computing power or fibre optic infrastructures for local public uses.

In conclusion: Rather than bending to Big Tech values and modes of operation – act fast, break down things and then move on – we should bend them to comply with our Nordic, public values, if they are to operate in the region. This will be a positive step not just for us, but it could also be transformative for these companies, potentially bringing much wider positive effects.

Links

• Event page for the symposium about the public value of communication infrastructures in the Nordics (All streams are available via this link, and are stored in a data center like those described above)
• News article about the Swedish bread company Pågen that could not build a bread baking factory (In Swedish)
• New article about the largest chicken slaughter house in Sweden (In Swedish)
• Part of the YouTube stream from the event

Notes

Thanks to Flora Mary Bartlett for gathering this data
Thanks to Harald Rohracher for this comparison

Acknowledgements

Many thanks to Minna Ruckenstein and Flora Mary Bartlett for constructive feedback and edits on the text; as well as to the Reimagine ADM project colleagues for their input. Thanks to Helle Sjøvaag for the invitation to be part of the panel in Stockholm.