[LINK] Chinese spy fears on broadband frontrunner

[Bernard Robertson-Dunn]

<brd>
Life's never simple, especially in government ICT procurement.
</brd>

Chinese spy fears on broadband frontrunner
Cameron Stewart
December 18, 2008
Australian IT
http://www.australianit.news.com.au/story/0,24897,24817536-15306,00.html

National security concerns about Chinese espionage could threaten the 
new frontrunner for Australia's $15 billion publicly backed national 
broadband network.

Security agencies will closely examine the bid lodged by Singtel Optus, 
which is believed to propose the involvement of Chinese 
telecommunications equipment-maker Huawei Technologies to help build its 
network.

Huawei was the subject of a US congressional investigation on national 
security grounds this year after legislators expressed concern about its 
links to the Chinese military and intelligence apparatus. The concerns 
led Huawei to withdraw from its joint $US2.2billion ($3.3billion) bid to 
buy a stake in US internet router and networking giant 3Com.

Optus emerged this week as the surprise frontrunner for the national 
broadband network tender when the Government excluded Telstra from the 
tender process after its bid failed to meet some of the project's stated 
requirements.

Huawei, the shadowy company based in Shenzen and founded by former 
People's Liberation Army officer and Communist Party member Ren 
Zhengfei, has triggered debate in the US, Britain and India about 
whether it is a legitimate international telecom player or a company 
bent on doing Beijing's bidding.

Intelligence agency concerns about Chinese cyber-espionage prompted 
India to scrap a planned $US60 million Huawei investment in its telecom 
in 2005.

Britain granted the company a $US140 million contract in that same year 
to build part of British Telecom's 21st Century Network.

Many mainstream global telecommunications companies, including Singtel 
Optus, already have close links with Huawei. Optus last month gave the 
Government its 900-page bid for the new national broadband network, 
which is understood to propose Huawei as one of several vendors to set 
up the network.

A spokeswoman for Optus confirmed the company had been working with 
Huawei as part of trials for the network, but would neither confirm nor 
deny Huawei was part of last month's final bid.

"We are not releasing the names of any potential vendors we may be 
working with on NBN," she said. "Huawei is a significant vendor partner 
of Optus and we are working with them in our test lab."

A spokesman for Huawei Australia did not return The Australian's calls 
but the company, the largest networking and telecommunications equipment 
supplier in China, has previously denied links with the Chinese 
government or with the PLA.

The national security statement released by Kevin Rudd this month warned 
of the growing danger of cyber-espionage by foreign countries, saying 
Australia would take new measures to protect against hackers. The 
federal Government has said it will investigate the national security 
implications of the remaining bids from Optus, Acacia and Axia.

"The Attorney-General's Department will co-ordinate an assessment of the 
national security implications of the proposals in consultation with 
national security and law enforcement agencies," the Government's 
Request for Proposals states.

An eight-person expert panel is assessing the bids and will recommend a 
winner late next month.
However, a study by global think tank the Rand Corporation states: 
"Huawei maintains deep ties with the Chinese military, which serves as a 
multi-faceted role as an important customer, as well as Huawei's 
political patron and research and development partner."

The conservative US think tank the Heritage Foundation claimed in a 
paper this year that the PLA had direct access to Huawei's training and 
technology infrastructure.

Huawei set up a regional head office in Sydney in June 2004. Its 
Australian division employs 100 staff and reported a 66.5 per cent rise 
in revenue to $70 million last year.

It is a key vendor in constructing Optus's 3G mobile network in rural 
areas, and is supplying hardware to Queensland electricity utility 
Powerlink for a network launch.

-- 
 
Regards
brd

Bernard Robertson-Dunn
Canberra Australia
brd at iimetro.com.au