The House Intelligence Committee recommends the US government, and companies, not use Huawei gear, citing spy concerns and the company's failure to explain a Communist Party committee inside its corporate structure. RAW DATA: The full Intelligence Comm
UPDATE Oct 9: Our government should seriously consider the "damning findings" of the US House of Representatives' Intelligence Committee report into Chinese telecommunications giant Huawei, the Greens say.
Huawei is one of several component suppliers for the $1.35 billion Ultrafast Broadband (UFB) rollout and the $300 million Rural Broadband Initiative (RBI), contacts it landed in the wake of enthusiastic backing from Prime Minister John Key.
After a year-long investigation, the committee – led by Republican Congressman Mike Rogers – recommends the US government, and companies, not use Huawei gear, citing spy concerns.
It has also recommended US firms be blocked from mergers or acquisitions involving Huawei, or a second Chinese telecommunications gear maker, ZTE.
RAW DATA: The Intelligence Committee's report (PDF)
LATEST: Huawei, Adams hit back
The US government has already taken a hard line. In 2008 it blocked Huawei's $US2.2 billion bid (with Bain Capital) to by US company 3Com, and earlier this year it pressured Symantec to drop a multi-billion partnership with Huawei by threatening to block access to lucrative federal contracts).
The new report ramps up the rhetoric, labeling Huawei and ZTE a "national security threat".
It says Huawei might be be guilty of bribery and corruption, discriminatory behaviour and copyright infringement (involving the patents of US company Cisco) and recommends that US network providers and system developers be “strongly encouraged to seek other vendors for their projects”.
The committee claims, according to a New York Times report, that it "obtained internal documents from former employees of Huawei that show it supplies services to a 'cyberwarfare' unit in the People’s Liberation Army". Links with a signals intelligence unit are alleged.
The report in itself does not bar Huawei from doing business in the US. But it makes it like Congress' Committee on Foreign Investment will put any proposed Huawei deals under the microscope, diminishing the likelihood that US phone companies, or corporates buying network gear or services, will want try to engage the Chinese company, according to the Wall Street Journal.
Congressman Rogers told the Wall Street Journal the report's findings were "alarming". He would forward a copy to the FBI, where he used to serve as a special agent.
Some, New Zealand It security insider Selwyn Pellett, see legitimate security concerns over Huawei and close ties with the Chinese government and military.
But in the US media, a number of commentators have noted a trend toward gratuitous China bashing, and trade protectionism, in the run-up to the November elections.
Appearing before the committee, officials from Huawei and ZTE said alleged back doors were actually software flaws and not intentional vulnerabilities. The companies have vigorously denied all spying accusations, and say they should be judged by their track record in the international market.
But in its report, the committee says Huawei did not fully co-operate with its investigation.
At one point it notes:
Huawei admits that the Chinese Communist Party maintains a Party Committee within the company, but it failed to explain what that Committee does on behalf of the Party or which individuals compose the Committee.
Here, the Greens are suspicious.
“The [NZ] government should review using Huawei on broadband rollout in order to protect our economy, information and intellectual property from cyber-attack,” ICT spokesperson Gareth Hughes says.
“Despite the Australian government and the US House of Representatives both taking steps to minimise the risk of Huawei operating in their countries, our government is doing nothing to ensure the integrity of our telecommunications infrastructure.
“The New Zealand taxpayer shouldn't be giving Huawei hundreds of millions of dollars to make it easier for Beijing to potentially spy on us.
“The government was irresponsible to dismiss legitimate concerns about Huawei in March, when Australia blocked the company from being involved in their fibre rollout.
“It’s unlikely that John Key and his spy agencies would know something both the US and Australia governments don't and it is now prudent to review our relationship with Huawei in light of this new information.”
Huawei electronics, management services and fibre is being used by Ultrafast Fibre (which won areas including Hamilton, Tauranga, Wanganui, New Plymouth in the UFB rollout), and Enable, holds the UFB contract for Christchurch.
Chorus is using some Huawei gear as part of the Rural Broadband Initiative contract it won in a joint bid with Vodafone (like 2degrees, Vodafone also uses Huawei gear on its own network).
ICT Minister Amy Adams has previously said the government is monitoring the situation, but has no security concerns about any of the equipment suppliers involved in the rural or urban fibre rollouts.
Early iin the UFB, Labour criticised Huawei from a different tack, asking if the Chinese company had compromised Crown Fibre Holdings by offering contract work to board member Murray Milner.
A spokesman for Huawei NZ said he was waiting on a global statement from the company, which was expected around 3pm today [UPDATE: It was released early. Read it here.]
ICT Minister Amy Adams could not immediately be reached for comment.
Don't buy Huawei gear - key US congressman warns business, govt
Oct 7: Huawei has been labelled a corporate and national security threat by a key US lawmaker and former FBI agent.
The US Congress' House Permanent Select Committee on Intelligence has been investigating the Chinese smartphone and telecommunications gear maker for the past year.
It will release a report on Monday (Tuesday NZ time).
Tonight US time, US network CBS will screen a 60 Minutes interview with the committee's chairman, Michigan Republican congressman Mike Rogers, a former special agent with the Federal Bureau of Investigation - a government agency that has visited at least one potential Huawei customer, CBS claims.
CBS today previewed snippets of the interview on its website and things are looking bad for the Chinese company.
"If I were an American company today...and you are looking at Huawei, I would find another vendor if you care about your intellectual property, if you care about your consumers' privacy, and you care about the national security of the United States of America," Mr Rogers said in an interview with CBS' Steve Kroft.
According to CBS, the committee believes allowing Huawei to build and maintain large swaths of America's telecommunications infrastructure opens a door for the Chinese government to spy on the U.S. government and engage in industrial espionage.
At hearings before the committee in Washington DC, Huawei officials have denied spying, and denied government control (NZ technology industry veteran Selwyn Pellett has detailed for NBR his encounters with Huawei in Beijing, which indicated the company works closely with the government and military).
Huawei NZ has also rejected claims around security issues and pointed to the company's commercial track record and repeat businesss.
The New Zealand government says it is monitoring events, but has no concerns about any company involved with the Ultrafast Broadband (UFB) rollout, for which Huawei is one of several component and fibre suppliers.
In the US in 2008, Huawei was blocked by Congress in its bid to buy US networking company 3Com (in a $US2.2 billion joint bid with US company Bain Capital. 3Com was later sold to HP for a lower price; cynics saw protectionism at work).
And earlier this year, security software maker Symantec dissolved a multi-billion alliance with Huawei, under what the New York Times called US government pressure.
In March, the Australian government blocked Huawei from bidding on its National Broadband Network, citing security concerns, and opened an investigation into a proposed Perth-to-Singapore Huawei cable.
NZ govt happy to boost Huawei
While a number of US and Australian politicians have taken an aggressive stance toward Huawei, here the National-led government has boosted the company.
This year, NZTE helped broker a deal for Rakon to supply components to Huawei.
In 2010, then ICT Minister Steven Joyce led a trade mission to China (including 2degrees, one of Huawei's largest NZ customers) which included a visit to Huawei.
And in July 2010, fresh from meeting Huawei executives at the Shanghai World Expo, Prime Minister John Key told Q&A’s Guyon Espiner that the Chinese telco giant should be a leading contender to supply gear to companies building New Zealand’s $1.35 billion Ultrafast Broadband (UFB) fibre network.
"At the end of the day from New Zealand's perspective I mean we're looking for value for money," Mr Key said. "So let's take ultrafast broadband. They've got a lot of expertise in that area, Huawei is a big player, they're bigger round the world, they've got a huge partnership in the United Kingdom, for instance."
