Commerce Department probed carriers over Chinese equipment security concerns

The U.S. Department of Commerce pressed dozens carriers, software and IT companies--including Verizon Communications (NYSE:VZ) and AT&T (NYSE:T)--earlier this year to provide the government with information on foreign-made hardware and software on their networks in an effort to sniff out Chinese spying, according to a Bloomberg report.

The existence of the probe is the latest piece of evidence that the federal government is hardening its stance against Chinese vendors Huawei and ZTE, which have come under ever-increasing scrutiny as potential risks to national security. The Commerce Department sent a survey to carriers in April asking for a detailed accounting of network equipment as well as security-related incidents including the discovery of "unauthorized electronic hardware" or equipment that can duplicate or redirect data, according to a copy of the survey reviewed by Bloomberg.

AT&T and the Commerce Department declined to comment, and Verizon acknowledged it received the survey but declined to comment further, according to the Bloomberg.

In addition to the broad scope of the survey, it also marks an intensification of the Obama administration's efforts to guard against potential Chinese cyber-attacks. Lawmakers have contended that Huawei and ZTE have connections to the Chinese government and military, charges that the two companies have repeatedly and vehemently denied.

According to the report, the survey asked the carriers for detailed information on equipment including optical-transmission components, transceivers and base-station controllers. The information was to be shared with the Defense Department in an attempt to allow the government to better understand which companies were building which parts of the nation's communications infrastructure. Companies that refused to respond to the survey could face criminal penalties under the Cold War-era Defense Production Act, the report said. 

That particular aspect of the government's probe drew a rebuke from the CTIA, which argued that the administration was violating a tradition of carriers voluntarily giving information to the government. "We are deeply concerned by the lack of information regarding how this data is going to be used and shared," the CTIA and U.S. Telecom Association wrote in a June 8 letter to then-Secretary of Commerce Gary Locke. "Our concerns are exacerbated by the fact that the department has chosen to direct the disclosure of this data pursuant to an assertion of authority under the Defense Production Act." Locke is now the U.S. ambassador to China.

The disclosure of the Commerce Department survey comes weeks after a powerful House intelligence committee launched an investigation into whether the increased presence of Huawei and ZTE in the U.S. infrastructure market will provide "the Chinese government an opportunity for greater foreign espionage." In a joint statement released last month, Reps. Mike Rogers (R.-Mich.), chairman of the House Permanent Select Committee on Intelligence, and Dutch Ruppersberger (D.-Md.), the panel's top Democrat, said that a preliminary review of the issue "suggests that the threat to the supply chain constitutes a rising national security concern of the highest priority."

For more:
- see this Bloomberg article

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