Govt banned Huawei from NBN bids

Govt banned Huawei from NBN bids

Summary: The government has reportedly banned Chinese-owned Huawei from tendering for National Broadband Network (NBN) contracts, with the office of Attorney-General Nicola Roxon issuing a statement saying the government needed to protect the integrity of Australia's information infrastructure.

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update The government has reportedly banned Chinese-owned Huawei from tendering for National Broadband Network (NBN) contracts, with the office of Attorney-General Nicola Roxon issuing a statement saying the government needed to protect the integrity of Australia's information infrastructure.

The Australian Financial Review has quoted sources saying that Huawei had been told late last year not to bother tendering for any NBN supply contracts because the company wouldn't succeed.

When queried on the ban, the attorney-general's office issued a statement to ZDNet Australia that provided justification for such action:

The National Broadband Network (NBN) is the largest nation-building project in Australian history, and it will become the backbone of Australia's information infrastructure.

As such, and as a strategic and significant government investment, we have a responsibility to do our utmost to protect its integrity and that of the information carried on it.

This is consistent with the government's practice for ensuring the security and resilience of Australia's critical infrastructure more broadly.

NBN Co pointed out that it runs procurement processes for its requirements and then announces the outcomes, but couldn't comment further on the issue because it didn't discuss the details of tenders.

Huawei has long been under media scrutiny because of its Chinese heritage. It has been accused of links to the People's Liberation Army (PLA) because its chief executive Ren Zhengfei served in it, raising fears that backdoors might lurk in the vendor's kit.

Huawei's Australian CEO Guo Fulin responded to these accusations in 2009 with a fiery letter.

"The articles falsely accuse Huawei of engaging in espionage activities and offer no proof to support this charge ... your readers should know that Huawei is 100 per cent employee-owned and no governments or government agencies have any involvement or ownership in our operations," he said, adding Huawei had a policy of employee localisation in Australia.

In the hopes of clearing the air over the allegations of links with the PLA, Huawei said it approached the Australian Security Intelligence Organisation (ASIO) in 2009 to lay its cards on the table.

On Monday, the Australian Financial Review reported that the government banned Huawei for the NBN on the basis of ASIO advice, although NBN Co itself had reportedly approved Huawei to be a bidder for NBN tenders.

Huawei's local director of corporate and public affairs, Jeremy Mitchell, also went on the record in 2010 to point out that the company boasted 45 of the top 50 global telco operators as partners.

"It's upsetting and disappointing that these sort of faceless accusations get made, but we know that those in the telecom industry know us, they know our reputation and, as I said, you know, you don't get to the position that we get — number one in fixed networks across the globe — unless you deliver," he said.

However, Huawei's Mitchell was understanding of the government's stance in an interview with Sky News this weekend, a transcript of which Huawei provided to ZDNet Australia as comment on the matter.

"We understand that this is a very sensitive area for governments all around the world. What we say is: governments around the world don't have the answers by themselves, we ourselves don't have the answers by ourselves, we need to work together. This is one of the biggest threats governments are facing as more and more important information come on these networks, and we've got to work together," he said.

"This is a whole new area for [Australia]. As we look at the Asian Century, we're not used to privately owned Chinese companies, we're not used to companies coming from China that are leading in technology and also global — 70 per cent of our work is outside of China."

The ban was a set back and the company was disappointed, but it was looking to put measures into place that would help the government see it as a partner for the NBN, he concluded.

Huawei holds contracts with multiple telecommunications providers in Australia. It has been conducting long-term evolution trials with Telstra, it has just signed a long-term evolution contract with Optus for the Newcastle region, adding that to a contract it has for the telco's regional network, and Huawei also has scored a massive network revamp deal with Vodafone.

China as a nation has historically been accused of being the origin of many cyber attacks; for example, in 2010, Google revealed that it and other companies had been hit by attacks that originated in China, with some targeting Gmail users who were human rights activists. As a result, the search giant said it would stop censoring its web results in China and could end up exiting that market altogether.

In a report to US Congress last year, titled "Foreign Spies Stealing US Economic Secrets in Cyberspace", the US Office of the National Counterintelligence Executive (ONCIX) also pointed the finger at Chinese actors as being "the world's most active and persistent perpetrators of economic espionage".

"We judge that the governments of China and Russia will remain aggressive and capable collectors of sensitive US economic information and technologies, particularly in cyberspace," the report said.

Updated at 7.32am, 26 March 2012: added comment from Huawei and NBN Co, and information about ASIO

Topics: NBN, Broadband, Security, China

Suzanne Tindal

About Suzanne Tindal

Suzanne Tindal cut her teeth at ZDNet.com.au as the site's telecommunications reporter, a role that saw her break some of the biggest stories associated with the National Broadband Network process. She then turned her attention to all matters in government and corporate ICT circles. Now she's taking on the whole gamut as news editor for the site.

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Talkback

16 comments
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  • I would not trust any of the American companies either. If the Government is that worried then this is a good reason to kick start local design and manufacturing.
    frank0-3f91e
    • Yes good point.
      I was surprised when I read that John Brumby was on the board of Huawei. Aparently they had the go ahead but ASIO gave them the chop. I wonder where all the hardware is coming from anyway, probably China. Why couldn't they just write a backdoor in the firmware.
      clive49
    • i agree with u
      Eric21-6dae2
  • Alexander Downer is on the board of Huawei Australia too - he was on the radio this morning having a whinge about the decision. I would imagine that information about the organisational links of Huawei is a pretty active target for the relevant customers of Australian intelligence collection agencies, and to be frank, we have no idea what they've found which formed the basis of the advice from ONA.
    scotartt
  • Telstra expressed its security concerns in the early days of the proposed dismemberment of the iconic network but unfortunately if fell on the deaf ears of both shades of the powers that be.

    Changing horses in mid stream is typical of bureaucrats and could well lead to the erosion of our Telecommunications security.

    Huawei should be viewed in the same light as other equipment providers and debugging must be universal including for for home grown suppliers.
    Vasso Massonic
    • Indeed Vasso...

      Telstra certainly did loudly criticise Huawei and their possible espionage links, when Optus were suggesting a FTTN partnership with Huawei (iirc).

      Now one guess who Telstra's LTE partner is?
      Beta-9f71a
  • Since it is NBN
    Better safe than sorry!
    abey1
  • Considering that much networking equipment is made in China, why single out that company. Also I understand many telco's have already installed Huawei equipment, probably ISP's as well. The horse has left the stable and died of old age on this one.
    Knowledge Expert
    • They must have their reasons.

      After all the NBN is just one big commie plot and being so, surely Huawei would be most welcome by this loony left gubmint otherwise, eh?

      *sarcasm*
      Beta-9f71a
      • Sorry I dont quite understand your point. Do you mean NBN is part of a "commie" plot? That is a serious matter. If Huawei were able to use the equipment to access internet users accounts, that could help Sen Conroy's filter. In that case you would expect Huawei to be welcomed, although perhaps we will see a the government change their mind and allow Huawei.
        Knowledge Expert
        • Which part of *sarcasm* do you not grasp...?

          Oh sorry, you actually believe such things...LOL!
          Beta-9f71a
          • It is a serious matter you raise. What evidence do you have that communist governments are intending to use the NBN to spy on the Australian people. What is being done to stop this infiltration?
            Knowledge Expert
  • What a load of old cods wallop!
    Has ASIO never heard of encryption? Any sensitive data transmitted on the NBN would & should be encrypted!
    Is NBN providing it's Network to DOD? Wouldn't surprise me if it was! although DOD is supposed to have it's own secure Network? SOOO it would be using encryption on a VPN..wouldn't it???

    If the CIA can reverse engineer hardware & software, I'm assuming ASIO can do the same? Then again, since I suspect ASIO just rides the camel's back (uses or conscripts it from others) for most of their IT infrastructure, maybe they don't know what hardware & software encryption is all about, or maybe they use it without operatives understanding it!
    If they do understand encryption & use it! why bother banning or preventing NBN Co from buying any Huawei equipment. Other manufacturers can do the same.

    Come on guys, it's 2012. If the Chinese want any sensitive info, they will obtain it anyway. The Australian Huawei management must report to their Chinese head office, to imply otherwise it a nonsense, so what's the big deal? ASIO has their head up it's proverbial if it's not watching the interchange between Huawie's Chinese & Australian offices.

    Banning it's use for the NBN, especially if it's the best & least expensive is such a waste of time. I'd suspect the Yanks, & any of the IT equipment manufactured in the USA, & especially the CIA, of spying just as much! It's way past 1984! To think banning anything, especially on the Internet, in this day & age, will stop espionage, is childish in the extreme, & so like bureaucratic mentality.
    Huntsman.ks
  • Why is it so?
    Manasy
  • I think two points that are missed by the other comments is that while data loss is an issue the arguably greater issues are the handing over of a detailed infrastructure map to a foreign entity and giving them the associated ‘keys’ to that infrastructure. Losing secrets is one thing having our information/telecommunications network compromised at the wrong time is devastating.
    T_mcmahon
  • I think two points that are missed by the other comments is that while data loss is an issue the arguably greater issues are the handing over of a detailed infrastructure map to a foreign entity and giving them the associated ‘keys’ to that infrastructure. Losing secrets is one thing having our information/telecommunications network compromised at the wrong time is devastating.
    T_mcmahon