update A Telstra official allegedly implied that Optus, using Huawei gear in its bid for the roll-out of the National Broadband Network (NBN) in 2008, would pose a national security risk, according to a leaked confidential US Embassy cable from Wikileaks.
The 2008 cable from the US Embassy in Canberra outed today refers to allegations made in a 2008 article in The Australian, and said that in an embassy meeting with Telstra officials, it was implied that the Chinese network vendor might pose a risk if it was charged with rolling out the national infrastructure because of alleged links with the Chinese People's Liberation Army.
"There is speculation that Telstra leaked this story, coming so soon after Telstra's bid was disqualified; a Telstra official told econoff in mid November that Optus would use Huawei, and implied that would be a security risk for Australia," the cable stated.
The cable referred to Telstra being excluded from initial bidding for the NBN project in 2008, before the government ultimately decided to not award any party the tender, instead opting to embark on the $35.9 billion project on its own.
According to the cable, the embassy also had a meeting with the attorney-general's cybersecurity branch director Lionel Markey, who admitted that there would be "contention" about NBN components.
"[The department] is consulting with a range of Australian government agencies, including the Defence Signals Directorate (DSD) and the Australian Security Intelligence Organisation (ASIO). Although he could not confirm whether or not Huawei was included in Optus' bid due to strict [government] guidelines concerning disclosure of information related to the NBN tender process, Markey said the [government] was well aware of issues related to Huawei," the cable stated, adding that the government would consult the US for more information.
Telstra also uses a number of Huawei consumer devices, such as the Telstra 3G Hotspot and T-Touch Tab.
The telco declined to comment when contacted by ZDNet Australia.
In a statement, Huawei Australia spokesperson Luke Coleman said the company works with all the major Australian telcos.
"Huawei's record speaks for itself — we're working with all major Australian operators, including Telstra, and we're the number-one builder of fibre broadband networks around the world with deployments in the UK, Singapore, Malaysia, the UAE and Brunei."
In an earlier classified cable on Telstra's exclusion, also published today, the Canberra Embassy said that the government's rejection of Telstra's "bare-bones" bid for the NBN project was a "a watershed moment in Australia's telecommunications history."
Telstra too big for AFACT
Another leaked cable to appear on Wikileaks today revealed why the Australian Federation Against Copyright Theft (AFACT) targeted iiNet for its piracy case in 2008. In a meeting with US Ambassador to Australia, Robert McCallum, the president for Asia Pacific of the Motion Picture Association, Mike Ellis, said that iiNet was big enough to be noticed, but not as big as Telstra, which would be able to fight back.
"It was clear Ellis did not want to begin by tangling with Telstra, Australia's former telecom monopoly and still-dominant player in telephony and internet, and a company with the financial resources and demonstrated willingness to fight hard and dirty, in court and out. Ellis also said iiNet users had a particularly high copyright violation rate, and that its management has been consistently unhelpful on copyright infringements," the cable stated.
The US Embassy said that it would monitor the case, which is now set to go before the High Court, to see whether the case "spawns a 'giant American bullies vs. little Aussie battlers' sequel"
Updated at 2:56pm 30 August 2011: added comment from Huawei