China’s Huawei remains a lightning rod for controversy.
For almost a decade, U.S. security officials have been warning that sales of Huawei products to U.S. telecom companies would open a pipeline into the United States for Chinese spies. And for years, Huawei has vehemently argued against those concerns.
The situation is particularly noteworthy considering Huawei is the world’s largest wireless network equipment vendor, and it counts a significant number of customers among the smaller wireless operators in the United States.
In recent months though, it appears that opposition to Huawei—both in the United States and globally—has gained momentum. In the United States, the FCC took action against network equipment sales by Huawei, the Commerce Department briefly banned products from Huawei’s smaller Chinese peer ZTE, and AT&T, Verizon and others dropped plans to sell phones from Huawei. And that’s all on top of the Trump administration’s tariffs against Chinese products.
Actions and statements against Huawei and ZTE have come from almost all levels of the U.S. government. In its lengthy filing on the threat posed by foreign telecom equipment suppliers, the FCC laid out a document trail that stretched from Congress’ 2018 National Defense Authorization Act (that in part banned the Department of Defense from using equipment from Huawei and ZTE) to a White House executive order from on the topic from 2017, a Presidential policy directive from 2013 and a report from the U.S. Government Accountability Office from 2013.
But much of the current opposition to Huawei and ZTE can be traced back to a 2012 report on the topic by the Permanent Select Committee on Intelligence for the U.S. House of Representatives, authored by Mike Rogers and Dutch Ruppersberger. That report helped set the groundwork for much of today’s challenges against Huawei and ZTE.
What’s more, the authors of that report haven’t backed off their initial findings.
“Our concerns remain as strong as they were six years ago when we published our report,” the two wrote in in the Wall Street Journal in May, adding that “the U.S. should be doing more to guarantee that China isn’t listening in to American phone conversations.”
Rogers, for his part, most recently raised the issue again during a media event held by a new nonprofit organization called “Protect America’s Wireless.” The organization is working to block the proposed merger between Sprint and T-Mobile on national security concerns, although Rogers spend much of his time at the event laying out his case against Huawei and ZTE in general. Rogers—a former U.S. representative who previously chaired the House Intelligence Committee and who is currently a CNN national security commentator—only acknowledged the proposed Sprint and T-Mobile merger in relation to Sprint’s parent company SoftBank, which has purchased equipment from Huawei.
Below are Rogers’ lightly edited comments on Huawei, ZTE and the threat Chinese equipment companies pose to U.S. national security. In response to Rogers’ comments, a Huawei representative said: “Huawei’s products and solutions are sold in 170 countries worldwide serving 46 of the top 50 global operators and meet the highest standards of security, privacy and engineering in every country we operate globally including the U.S. We remain committed to openness and transparency in everything we do and want to reiterate that no government has ever asked us compromise the security or integrity of any of our networks or devices. Huawei is an employee-owned company and will continue to develop its global business through a significant commitment to innovation and R&D as well as to delivering technology that helps our customers succeed.”
Here is Rogers’ case against Huawei:
One of the reasons that I got interested in the Huawei-ZTE issue, and concerns surrounding our national security, was when I was on the [House] Intelligence Committee back in 2004. There was pretty high-profile theft of Cisco intellectual property, their router products. Cisco came out of that whole thing saying that Huawei had stolen source code, command interfaces and copyrighted manuals. So that got us interested.
It certainly got me interested in taking a tougher look at what were they doing, what were they up to. Was this just a more standard fare of Chinese companies affiliated with the Chinese government stealing intellectual property, or was it something more nefarious?
Over time our intelligence services were certainly sending up layers of caution. [Since then] we've found more and more examples of behavior that certainly wouldn't pass muster in the United States. It wasn't the behavior of a good international commercial citizen, for sure.
By 2012 I had become chairman [of the committee], and Dutch Ruppersberger and I decided that we were going to launch an investigation and focus intelligence resources on trying to determine who they are and what they were doing at some depth, given that we had all of this information out there.
That report was pretty damning, candidly, and for good reasons. There were clear ties to the Chinese government. Their behavior in the marketplace was not anything that anyone would associate with free market enterprise. And there were examples along the way – there was an unclassified report and a classified report, and obviously I can't talk about the findings of the classified report – but it was concerning enough that the activity that you see today I think in the United States government reflects that classified version of it.
The Australians have come out and banned Huawei and ZTE from participating in their 5G buildout. Why this is important, I think, even from this discussion, is that we have to understand that there's an ecosystem that the Chinese government is using to accumulate data.
I think they want to have data dominance, by their own words, by 2025. That 'Made in China 2025?' It's all part of the same process. There's an ecosystem that they use that includes Huawei and ZTE to accomplish their aim of stealing intellectual property and being able to conduct the espionage efforts, both on U.S. companies and allied companies all around the world. You see bits and pieces of that.
By the way, it's certainly part of the [Chinese] national security law that anybody that handles data in China that's a Chinese company or a partner of a Chinese company, must provide that information to the Chinese government. We're setting example and example and example of that. The most recent was China Telecom – which, by the way, uses Huawei and ZTE gear – which diverted traffic, it's hard to hide, and they got caught diverting traffic. And that included traffic from U.S. contractors and other governments of interest and financial institutions here in the United States and Canada, through Beijing.
[The Chinese government] was able to copy all of that data, go about any decryption that they needed to do, and send it back in a very short order of time. Meaning, that there was not much latency in that particular operation. That doesn't happen by itself. It happens in an ecosystem and a decision-making system that all works in concert with each other.
Huawei and ZTE are a big part of that.
The report came out in 2012. In 2014, they continued their activities in a way that was constraining, especially when it comes to intellectual property theft, by stealing components of Tappy, a robot designed to act like a human to test smartphone devices as it would relate to quality and durability. This was a T-Mobile exercise. They called it Tappy because it was supposed to simulate a human hand to tap the phone in ways that they could get data to find out how they could improve the development of those phones. They not only stole the surrounding information, they actually broke off a piece of the robot and took it with them. This shows you how aggressive they are about stealing intellectual property that they need, that they're going to turn around and commercialize and use against North American economic interests and our allies' economic interests.
Sun Microsystems is another great example of this ecosystem. There has been lots of public reporting, including from Bloomberg, about the fact that the Chinese government shows up and their intelligence services say, ‘We're going to apply these chips in the firmware. We're going to deliver them out, and we're going to target them at companies of interest.’ Again, all of this works together. If you can do that, then you can coordinate with Huawei and ZTE how you might move data and other things.
Even if you're saying that they can't operate in the U.S. government system, there are other ways that they can get information from the United States, and until we address that, I think we all need to be concerned about their orchestrated level of effort, maybe in the Chinese Intelligence Services, which is why Australia has come out and banned them.
That's why Great Britain came out in the summer and found that even with their center that tests Huawei gear, they found that products that they were introducing in their markets, certain products, didn't have a binary equivalent, meaning that the equipment and the source code that they sent to the British testing facility didn't match the equipment that was ending up being placed and operated in the network. That was a clear violation of what they said they wouldn't do.
Even Canada’s Security Intelligence Service director, Ward Elcock, came out and warned against Huawei gear especially in the 5G buildout. Even in that case, where they hijacked that data, their point of presence, namely their routers and network switches and multiplexers, that Huawei and ZTE gear, helps China Telecom accomplish its goal.
They all, again, work together in an ecosystem that is very coordinated. It's not like the U.S. system where the private sector does its thing and the government sector does its thing. It is all coordinated in a way that we would be absolutely naive not to pay attention about companies with serious connections with Huawei and ZTE, as they're building out in other places around the world and what that would mean to the threat to our systems and our intellectual property here in the United States.