Only buy Huawei or ZTE if you like being SPIED ON - US politicos

bealtine

http://www.theregister.co.uk/2012/10/08/huawei_zte_should_be_banned_us/

Huawei and ZTE, China's top makers of telecoms kit, should be locked out of the US market because their technology poses a security risk, a US House of Representatives group said today.

The Intelligence Committee believes there is a threat of Chinese state influence on the two companies that would make them a liability in the American telecommunications market, and that businesses need to be aware of the potential for espionage.

The committee came to its conclusions following an 11-month investigation, during which ZTE and Huawei defended themselves and answered the government's questions.

Charles Ding, corporate senior VP for Huawei, told the committee that his company was an independent enterprise and wasn't influenced by the Chinese government.

"Huawei is entirely owned by its employees. No third party - including government institutions - has any ownership interest in Huawei," he said. "Huawei’s success has not been based on favouritism or subsidisation by the Chinese government."

Zhu Jinyun, senior VP for North America and Europe at ZTE, insisted that the company was the "most transparent publicly owned telecoms company in China".

"The committee’s central question has been: would ZTE grant China’s government access to ZTE telecom infrastructure equipment for a cyber attack?" he explained. "Let me answer emphatically: no! China’s government has never made such a request. We expect the Chinese government never to make such a request of ZTE. If such a request were made, ZTE would be bound by US law."

Both Huawei and ZTE have consistently denied that they are a threat to the US's cyber security, while the American authorities have given every impression of having found the pair of firms guilty even before the investigation concluded. Allegations against the Chinese firms have ranged from enabling espionage attacks to receiving government subsidies so they can undercut the competition.

The Intelligence Committee's report claims that the companies didn't hand over all the documents requested, including information about their relationships and regulatory interaction with the Chinese government.

“As this report shows, we have serious concerns about Huawei and ZTE, and their connection to the communist government of China," committee chairman Mike Rogers said. "China is known to be the major perpetrator of cyber espionage, and Huawei and ZTE failed to alleviate serious concerns throughout this important investigation. American businesses should use other vendors.”

The panel is planning to forward allegations it received from industry experts, and current and former employees of Huawei, to the Justice Department and the Department of Homeland Security, the draft said. The committee is also calling on the Committee on Foreign Investments to block acquisitions, takeovers or mergers involving Huawei and ZTE.

According to the report, there are security risks linked to the companies' equipment and services, but detailed evidence of these risks were not given in the unclassified version made public today. ®

jaydoxx

what sort of cold war bull**** is this? I mean is this actually for real?

bealtine

[QUOTE=jaydoxx; I mean is this actually for real?[/QUOTE]

It's a very real concern in the minds of the US politicians, see this:

http://online.wsj.com/article/SB10000872396390443615804578041931689859530.html

jaydoxx

Can't read the full article I'm afraid:\

I'll wait for the report on monday but I have a feeling it'll be utter tripe!

bealtine

http://www.theregister.co.uk/2012/10/11/cisco_marketing_vs_huawei/

Lawmakers aren't the only ones who have been pushing to block Chinese networking companies, including Huawei and ZTE, from bidding on US telecom contracts. According to The Washington Post, some of the strongest pressure has come from the Chinese firms' US-based competitors, in particular Cisco.

The networking giant has been lobbying its telecoms customers to shun Chinese vendors as far back as September 2011, the Post reports, citing a "remarkable" Cisco marketing document leaked by anonymous source.

Titled "Huawei & National Security," the seven-page document makes the case that the Chinese vendor is not to be trusted, and that its networking products could be used as tools of international espionage.

"Despite denials, Huawei has struggled to de-link itself from China's People's Liberation Army and the Chinese government," the document is quoted as saying.

At the time the document was distributed, Cisco was singing a somewhat different tune publicly. In a September 15, 2011 blog post, Keith Goodwin, then VP of Cisco's Worldwide Partner Organization, wrote that "healthy competition makes [Cisco] stronger," calling out Huawei by name alongside other competing firms.

"Each of our competitors brings its strengths, innovations, and programs to address a variety of customer and partner needs," Goodwin wrote.

But during Cisco's November 2011 earnings call, CEO John Chambers revealed that the networking giant was much more willing to play hardball with the Chinese competition than Goodwin's comments suggested.

"We have to take on Huawei in China," Chambers told financial analysts during the call. "Huawei will always compete with us on price, and they will be our toughest competitor going out four to five years."

Noting that Huawei had recently launched a reseller channel program in the US, Chambers said Cisco planned to "make it hard on them" in its home market.

It's not unusual for rivals to talk tough, particularly in highly competitive markets such as networking. But in this case, it seems Cisco's brand of hardball went much further than competing on price, to include a marketing campaign designed to stoke fears that Chinese companies could threaten US security.

That's assuming the purported marketing document is genuine, of course. When contacted by The Register for comment, Cisco spokesman John Earnhardt would only reply, "We've asked for a copy of this [document] from the Post for authentication, so we don't have it to share. Sorry can't help right now."

During recent Congressional hearings, however, lawmakers used language very similar to that found in the leaked document to explain why doing business with Huawei and ZTE could be detrimental to US interests.

"Throughout the investigation, Huawei consistently denied having any links to the Chinese government," reads the US Congress House Intelligence Committee report, adding that many analysts continue to believe otherwise.

For its part, Huawei has denied being involved in any spying activities, saying, We have never damaged any nation or had the intent to steal any national intelligence, enterprise secrets or breach personal privacy and we will never support or tolerate such activities."

In a statement issued earlier this week, the Chinese firm accused the Congressional investigation of having "a predetermined outcome," saying, "We have to suspect that the only purpose of such a report is to impede competition and obstruct Chinese ICT companies from entering the US market."

Whether or not that's true, it's likely that the House Intelligence Committee findings will seriously impact Huawei's ability to expand its presence in the US – and no one, it seems, will be happier than Cisco. ®

Slutmonkey57b

Just as well American tech companies don't open the door to allow the us government to spy using their equipment.

Chuck Stone

US telecoms kit makers will be delighted that the US is putting down this digital insurrection.

watty

Most Cisco stuff is made in China.

So how is US gear more secure, everything is outsourced.

Capt'n Midnight

No surprise really. India has already cut back on Chinese kit.
In the past the US has used a lot of Israeli kit that was allegedly phoning home.

It's a be seen to be tough on China PR thing.

If you want secure comms you have to have your own layers of encryption on top of everything else.

Even then you would have to pump lots of noise into the mix to Obfuscate traffic analysis. - During WW1 (nearly 100 years ago) the French weren't always able to decrypt German traffic, but they were able to put down an artillery barrage on the area where most of the traffic was coming from on the basis that it was probably headquarters.

And Cisco have been fooled into shipping fake Chinese kit in the past.

Amalgam

The UK had issues years before the US started ranting, I think Huawei were blocked from an infrastructure project that would have covered emergency response and police communications.

Huawei make a lot of backbone equipment for telecoms etc.. just in case someone thinks it starts and ends with phones and 3G modems. Huge company.

Amalgam

Just to add, I think this is a load of cobblers on the US governments side. A sign of the future for tech and trade in general, where a broken patent system and political xenophobia will be used as an almost de facto trade embargo 'filter'.

jaydoxx

That article is exactly what I thought it would be. If there was any evidence to suggest this to be true we would have access to it. I don't believe the chinese spying programmes are going unnoticed by the CIA, this story is pure baloney IMO