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How Secret Partners Expand NSA's Surveillance Dragnet
Advocatus Diaboli (1627651) writes It has already been widely reported that the NSA works closely with eavesdropping agencies in the United Kingdom, Canada, New Zealand, and Australia as part of the so-called Five Eyes surveillance alliance. But the latest Snowden documents show that a number of other countries, described by the NSA as "third-party partners," are playing an increasingly important role – by secretly allowing the NSA to install surveillance equipment on their fiber-optic cables. The NSA documents state that under RAMPART-A, foreign partners "provide access to cables and host U.S. equipment." This allows the agency to covertly tap into "congestion points around the world" where it says it can intercept the content of phone calls, faxes, e-mails, internet chats, data from virtual private networks, and calls made using Voice over IP software like Skype.
Skype is indeed encrypted, but I think it'd be a fairly safe bet that the NSA has the keys/access to a backdoor/some other method by which they can easily decrypt such calls. Especially in the years since Skype was acquired by Microsoft.
Proprietary "encryption" means the private entity (Skype) can decrypt it. As you might know, Skype is owned by Microsoft, which is a US corporation. Consequently, the NSA has access to all Skype communications.