Huawei Network Security Becomes Issue in Sprint Softbank Merger

By Wayne Rash  |  Posted 2013-03-31

Huawei Network Security Becomes Issue in Sprint Softbank Merger

To say that government officials in Washington, D.C., are paranoid about Chinese spies would be incorrect. After all, as the saying goes, it's not paranoia if they really are out to get you. This is very much the situation in Washington, and it explains a lot about why a number of government agencies and members of Congress are insisting that Softbank and Sprint not use equipment from Chinese manufacturer Huawei when their merger goes through.

The pending agreement, which was reported in The New York Times March 28, makes it clear that approval of the merger hinges on meeting national security concerns. For its part, Softbank has reported that it has already excluded Huawei from wireless networks it builds in Japan. Sprint does not use Huawei in its own networks, but does in its Clearwire subsidiary. Sprint has agreed to replace the existing Huawei telecom equipment at Clearwire.

So what's fueling this heightened level of concern in Washington? The fact is that the Chinese government is already doing everything it can to infiltrate its spies into every walk of life in this region. There are restaurants in Washington's Chinatown that are owned indirectly by the Chinese government and are used as places to gather information as well as to serve as conduits for infiltration. These places, which have been raided by immigration agents on several occasions, serve as safe houses for Chinese staying in the U.S. illegally.

On March 25, a Chinese national was sentenced to prison for stealing secret navigation technology used in cruise missiles, drones and smart bombs. A few days before that, another Chinese national was caught at Washington Dulles International Airport by the Department of Homeland Security and the FBI while trying to flee the U.S. with his luggage stuffed with hard drives and flash drives containing secret rocket and other weapons technology stolen from NASA, where he worked as a contractor. The same person had been suspected of illegally taking technology secrets to China on previous trips. This time, he was leaving with a one-way ticket.

A few months before that, an FBI sting caught Chinese spies in action trying to steal secrets in the Pentagon parking lot. A tape of the operation was broadcast on the CBS news program "60 Minutes," and resulted in prison time for the Chinese spy involved and for his American counterpart.

The Chinese intelligence effort seems to spare nothing in its efforts to penetrate the U.S. government. National Journal reporter Bruce Stokes told Washingtonian magazine that Chinese intelligence services impersonated him by spoofing his email.

Huawei Network Security Becomes Issue in Sprint Softbank Merger

Then they tried to insert cyber-warfare malware into computers at the State Department. Apparently the Chinese picked Stokes as a reporter whose email was likely to be opened by State Department officials.

In an environment like this, the level of suspicion by counter-intelligence officials in Washington is no surprise. Couple that with a number of incidents in which Hauwei telecom equipment has been shown to be sending information to servers in China along with the continuing concern in Congress, and you can understand why it looks like Huawei and fellow Chinese telecommunications equipment manufacturer ZTE are lucky to be doing business in the U.S. at all. This concern isn't limited to the U.S. The U.K. and Australia both restrict the operations of Huawei and ZTE.

Huawei, as you would expect, denies that the company has ever done anything to compromise the security of its customers. Unfortunately, those same customers have developed plenty of evidence to the contrary. The actions of these companies belie their words, and it's clear that both are working as agents for the Chinese intelligence services.

The real question now isn't whether Hauwei and ZTE are risks to national security. The questions is, rather, how great is the risk? How much data has already been stolen? As was the case of the Chinese spy fleeing the country after stealing data from NASA, it's not uncommon for data theft to be happening on a continuing basis for a long time before it's discovered. Some previous data breaches have gone on for years.

This question needs to be aimed at Clearwire, especially. How sure is Clearwire that its Huawei telecom equipment hasn't been quietly siphoning data off to China? How certain is Clearwire that its telecom equipment isn't providing Chinese hackers an easily accessible back door into the U.S. telecom infrastructure? Fortunately, we have Sprint's word that it will replace the Clearwire gear before it completes the Softbank merger.

But there's an obvious question that follows from here. Should Chinese telecom equipment be banned from the U.S. entirely? Or there's the next question, which is whether equipment made in China, from iPhones to televisions, can be certified to be free of Chinese spyware. I don't know the answer to that last one.

Is Apple completely confident that there's not some Chinese spyware code quietly lying in wait inside every iPhone? I hope so, but I don't think I'm paranoid to wonder about it.

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