Hard News by Russell Brown


The Huawei Question

One thing I hadn't ever expected to hear is a Green Party MP demanding that New Zealand jumps when the Australian federal security agency says "jump". But that's basically what Gareth Hughes was saying today on  Morning Report.

Hughes and his co-leader Russel Norman (with Labour's Clare Curran playing tag-along) are demanding that the Chinese company Huawei should be investigated and its Ultra-Fast Broadband contracts reviewed in the wake of the Australian government blocking the Chinese company Huawei from bidding on contracts for its National Broadband Network on advice from the ASIO.

For a start, we should do something almost no news coverage has done and establish what Huawei's stake is in the UFB rollout. To my knowledge, the company has won two contracts with local fibre companies. The first, granted late last year, is to build Ultra-fast Fibre's network in the Waikato, Taranaki and Whanganui. The second, granted last month, is with Enable Services' fibre network in Canterbury.

Huawei was always a strong contender for at least some of the UFB work in New Zealand. It's been working with British Telecom on the UK's huge fibre rollout for the past five years, and is also the key vendor for Singapore's government fibre project. It built 2 Degrees' New Zealand mobile network and is a major supplier to Vodafone in New Zealand and Australia. It's to build the new submarine fibreoptic cable between Australia and Singapore and its marine division will conduct surveying and installation for the forthcoming trans-Tasman fibre cable.

It has not, as you may have heard on Morning Report today, been "banned from doing business in the States". It has 700 employees in California and commissions billions of dollars of work from American companies. Its customers do not, however, include the US federal government, which has also blocked at least four acqusition deals with US companies in recent years. Whether the principal motivation is a concern about security or simple economic nationalism is a matter of debate.

The New York Times reported this week that the US security company Symantec withdrew from a four-year joint venture with Huawei in order to stay in the good books with its own government. Symantec apparently feared that doing business with Huawei would limit its own access to official information. A more relevant case is the exclusion of Huawei from bidding on the construction of a secure wireless network for American emergency services. (Although it's a given that whoever builds the network, most of the hardware will be made by Chinese companies.)

If the fear is that Huawei is somehow connected with malicious hacking attacks against US companies, then Symantec's move makes some sense, if only to protect its existing US government business. It's plausible that Huawei could be leaned on to share information provided to Symantec. But I'm not aware of any actual evidence connecting Huawei's products and the attacks.

Unlike most large Chinese companies, Huawei isn't a state enterprise -- it's actually 98.5% owned by its employees (which, with $32 billion in annual turnover, presumably makes it the largest employee-owned company in the world). The most often-cited connection between the company and the Chinese government is that its founder and CEO, Ren Zhengfei, is a former engineer in the People's Liberation Army, at the rank of major. He established the company in 1988.

Paul Buchanan told Radio New Zealand this morning that China was interested in accessing our part of the Echelon spy network, which monitors satellite communications in conjunction with the US and Australia. I'm not sure how it could achieve that aim by helping install consumer fibre in Christchurch and Hamilton.

Green Party leader Russel Norman went further than that today, when he told Glenn 'Wammo' Williams that he would "never" have a Huawei modem in his house:

Could Huawei really be installing individual snooping devices in individual homes? I suppose it's within the realm of possibilities that every single piece of consumer kit sold by Huawei contains a back door that no one has ever found. But no country bans the sale of such equipment.

Many such claims have been made against US companies in the past. There is indeed good evidence that US agencies started snooping via encryption machines made by the Swiss company Crypto AG 60 years ago. And this year, dubious claims were made that Apple, RIM and Nokia had agreed to install a back door for the Indian government in their products, which was supposedly used to intercept US government communications, using Symantec software to transfer the data. As The Register put it:

Rumors of governments getting backdoor access to software are as old as the hills - the NSA getting access to Windows 95 in exchange for monopoly control of PCs story lasted until the DOJ case started - and on the face of it there's nothing to suggest that this isn't merely a ruse. There would be considerable technical problems with using Symantec as a distribution system, for example. The subject matter also seems just a little too juicy for this El Reg hack.

When pressed on the nature of any threat to New Zealand, Norman said this to Wammo:

I can't really go into it to be honest. Because I'm on the intelligence and security committee, I have to rely on what's publicly available when I give comment about this. It's actually illegal for me to talk about what goes on in the committee. And I'm not sure that there's any public information about what their targets are in New Zealand.

Well, he's pretty clearly implying that he has heard something through his role on the committee -- probably via the US-China Economic and Security Review Commission, which seems to have supplied the ASIO with its information. That agency is probably as interested in US economic interests in the Pacific as it is security. Perhaps our government needs to say something more robust than we've heard so far from the hapless Amy Adams, if only to corral the wilder conspiracy theories. It may be that there are genuine security concerns. It may be that fanning public fear about large Chinese companies is a guaranteed win in New Zealand right now. It might be a bit of both.

I'm sure some of you out there will be better grounded in these issues than I am. I'd be interested to hear your thoughts.

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