U.S. Blocks Huawei from Government Networks

 U.S. House of Representatives finds fault in China based networking vendors.

By Sean Michael Kerner | Posted Oct 8, 2012
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Networks are critical infrastructure today that include core components of national security. Concerns of national security have now led the U.S. Government to take an extraordinary move and specifically bar Chinese networking vendors Huawei and ZTE from U.S. government networks.

The move to block Huawei in particular comes nearly two years after the company sent an open letter to the U.S. requesting a full investigation. Huawei competes aggressively around the globe and has been identified by networking giant Cisco, as being one its biggest competitive risks.

The House Permanent Select Committee on Intelligence started its official investigation into Huawei in November of 2011 and issued its recommendations today.

"As many other countries show through their actions, the Committee believes the telecommunications sector plays a critical role in the safety and security of our nation, and is thus a target of foreign intelligence services," the report states.

It is that risk that colored the Government investigation into Huawei. The investigation did not conclusively find that there was foreign intelligence service risk from Huawei. That said, the House committee noted that it was unsatisfied with the level of cooperation and information that it received from either Huawei or ZTE.

"Neither company was willing to provide sufficient evidence to ameliorate the Committee's concerns," the report states.

The report goes on to note that neither ZTE or Huawei provided enough evidence that would satisfy any fair and full investigation.

"Although this alone does not prove wrongdoing, it factors into the Committee’s conclusions," the report stated.

Going a step further, the Committee noted that it received information that suggested that Huawei might be violating United States laws. Huawei has had legal tangles with Cisco over the years. Cisco dropped a patent lawsuit against Huaweiback in 2004 after Huawei agreed at the time to Cisco demands for product changes.

In the final analysis, the report concluded that,"risks associated with Huawei’s and ZTE’s provision of equipment to U.S. critical infrastructure could undermine core U.S. national-security interests."

As such, the committee recommended that no U.S. government systems should include equipment from Huawei or ZTE. Additionally, the report suggest that the Committee on Foreign Investment in the United States (CFIUS) should block any mergers or takeovers that involve Huawei and ZTE.

The recommendation to block Huawei from mergers with U.S. companies is not a surprise. CFIUS has been blocking activities with Huawei for years. In 2008, the U.S. Government blocked a $2.2 billion dealthat would have seen 3Com bought out by Bain Capital. At the time Huawei held a stake in 3Com which what triggered government concerns. 3Com has since been acquired by HP.  Huawei has also had joint ventures with other U.S. firms including Symantec.

Huawei did not respond to a request for comment from EnterpriseNetworkingPlanet by press time.

Sean Michael Kerner is a senior editor at InternetNews.com, the news service of the IT Business Edge Network, the network for technology professionals Follow him on Twitter @TechJournalist.

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