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 :)