Google's reported interest in laying a new trans-Pacific underwater fiber optic cable is the most prominent sign that, after a six-year hiatus, companies are starting to build massive conduits for internet data.

After the market collapsed in 2001, telcos stopped laying new cables. With a glut of capacity on the market, Google bought "dark fiber" – unused fiber-optic cable connections – at discount rates. Google won't disclose how much fiber capacity it owns, but experts concur that it is a significant amount.

Now, with internet usage surging, telcos and assorted consortia are once again investing in undersea infrastructure.

While Google would not offer specifics on the U.S.-to-Asia connection, known at this point as Unity, it did confirm its interest in undersea cable, saying in a statement that "additional infrastructure for the internet is good for users and there are a number of proposals to add a Pacific submarine cable."

Indeed, all indications are that we're on the verge of some very large investments, both in terms of new cables and upgrades, says Eric Schoonover, a senior analyst at TeleGeography.

His research firm notes that trans-Pacific cable is particularly prized at the moment for two reasons: The dearth of existing undersea cable in the region and the huge swell in bandwidth demand coming out of Asia.

Although the four existing trans-Pacific cables provide an average 3.3 terabits per second of capacity each, cable owners have increasingly been scrambling to meet the upsurge in demand from places like Japan and China, Schoonover says.

Internet traffic along this route alone increased 41 percent between mid-2006 and mid-2007, according to TeleGeography. By contrast, eight cables currently cross the Atlantic, and demand there has not outrun capacity yet.

Google representatives say that the move has nothing to do with competing directly with telecommunications companies. As with Google's investments in dark fiber, the company plans on using the excess bandwidth simply to connect to datacenters and to peering points, expanding its capacity to transmit its own data, not other people's traffic.

Schoonover says that explanation makes sense.

"The reason I would tend to believe Google…is [because] this is not a great business," he says. "There's not a lot of money in it, to tell you the truth, and the wholesale players in the sub-sea market are selling on razor-thin margins."

Emphasizing this point, Schoonover says that past precedent has dictated that prices will eventually come down. "You add markets with new supply, and the price is bound to come down. There's even a risk of it collapsing," he says, as it did in 2000.

And it is for this reason that Google's undersea cable plans are probably limited to the trans-Pacific route ... for now.