<conspiracy theory>
We haven't seen posts from the CEOs of Cisco/Juniper/Dell/HP or other manufacturers of datacenter grade network equipment. Who needs Google/Facebook's "knowledge" if you've got root on all the border network gear (and SSL termination hardware)?
I know here in .au, Huawei have been excluded from the government-deployed National Broadband Network due to suspicions that the Chinese government has too much control/access to Huawei newtwork hardware.
an old time option - a few employees "compelled" to provide access and keep mouth shout.
a new time option - Larry is lying because of the gag order.
in between - Larry said "on such scale". Well, Google probably is of a bigger scale than Verizon.
Anyway, once the data is out there, it is only a matter of time and determination for a government (or any financially well backed up player) to get to it.
This scandal will be a great boost for any services involving "crypto", and probably would spring a new ones like an encrypted phone exchange/switch service, where one can see incoming and outcoming phone numbers, yet not which one connected to which :)
This was my initial assumption, that Prism referred to fiber optic prisms that are used to duplicate data with zero interference.
These can be installed at the trunk level with virtually no one knowing about it (maybe a couple of on site managers). They can handle massive data and pipe it directly to the NSA. The problem of course is you're dealing with raw data which isn't nearly as easy to work with then if you had direct access to internals.
These are already installed on every major backbone so I also don't see why they would bother to involve anyone, so there must be more to it.
ps. It would be nice if another whistleblower came out with the data on optic splitters and how the NSA uses them.
Isn't it more plausible that they're intercepting data flowing in and out of Google servers?