Cisco CEO warns Obama NSA 'load stations' threaten the entire tech industry

Cisco's John Chambers has told Obama why the NSA's national security efforts may do more harm than good.
Written by Liam Tung, Contributing Writer

Cisco's CEO John Chambers has asked US president Barack Obama to consider new rules preventing agencies hijacking networking equipment at it moves through the supply chain — or risk undermining confidence in the multi-billion dollar US technology sector.

In a letter dated 15 May and published by Re/code on Sunday, Chambers responded to claims in a new book by journalist Glenn Greenwald that the National Security Agency (NSA) used "load stations" to implant spy beacons on servers and networking gear shipping from the US to particular customers. News reports included an image purportedly of staff from the NSA's Tailored Access Operations unwrapping a Cisco box.

Chambers, who said Cisco doesn't work with the government to weaken its own products, believes the intercepts pose a threat to trade and jobs across the US tech sector, and may leave its position in the industry "impaired".

"We ship out products from locations inside, as well as outside the United States, and if these allegations are true, these actions will undermine confidence in our industry and the ability of technology companies to deliver products globally," Chambers warned.

The letter comes as Cisco and other US tech companies face difficulties growing their businesses in developing economies. Ahead of its third quarter report, Cisco noted that its business in emerging markets declined overall by seven percent, with Brazil, Russia, India, and China collectively down 13 per cent.

As noted by ZDNet's Larry Dignan last week, the NSA's attacks on the supply chain threatens to harm international sales, push manufacturing outside the US, cost jobs, kill trust in US technology and the supply chain; and may ultimately cost the US its technology leadership.

To restore trust in US tech companies, Chambers wants the president to write a new code of conduct that strike a better balance between national security and companies’ abilities to meet customers' expectations of privacy.

"We simply cannot operate this way, our customers trust us to be able to deliver to their doorsteps products that meet the highest standards of integrity and security. That is why we need standards of conduct," Chambers wrote.

Chambers' letter followed a list of suggestions for surveillance reform aired last week by Cisco's general counsel Mark Chandler, which included that government agencies require a court order to withhold newly-discovered flaws from vendors. Governments should also not interfere with companies lawfully trying to deliver internet infrastructure to customers, he said.

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