Huawei fears further blocks

Urges legislative caution on national security reforms.

Huawei has warned against proposed legislation that could preclude companies from participating in public and private networking projects throughout Australia.

Huawei Australia chairman, Admiral John Lord, told a joint parliamentary committee hearing today that proposals to change national security and telecommunications legislation could block the vendor, or potentially others, from selling to Australian government and businesses if implemented incorrectly.

The parliamentary committee is currently investigated a raft of national security reforms, that include proposals obliging telcos and ISPs to keep telecommunications metadata for up to two years.

However, another proposal could see the Australian Government gain greater control on the potential design and procurement decisions on both public and private networks.

"Our concern lies that if in the future, there were some legislation that said that if Australia decided that some country is not a friendly country, that some companies may be precluded without even assessing what their status is, whether they can provide the best product, whether they can contribute to Australia," Lord said.

A discussion paper released by the Attorney-General's Department for the committee's reference indicated a potential to "intervene in the market to educate and assist [service providers] to maintain a minimum level of security" and ensure "the integrity and security of Australia's national telecommunications infrastructure".

Admiral Lord said elements of the proposal had the potential to be interpreted broadly.

"There is an opportunity there for legislation to be used wrongly and to limit the participation of competition," he said.

"Huawei does not support a prescriptive or permissions-based approach ... we believe that if Australia went down that route, that is significantly different to any other international legislation concerning competition in the industry, when you preclude a company purely on country of origin in legislation."

His comments were supported by John Stanton, chief executive of telco representative body Communications Alliance, who later told the committee hearing that "any scheme that mandated Government controls over network design or procurement decisions would not be appropriate".

Huawei has continued to make headlines for several years over allegations of ties to the Chinese Government and potential backdoors in its equipment for use by overseas spying.

Although its equipment is heavily used by Optus and Vodafone locally, the company was blocked from tendering directly in the National Broadband Network by the Australian Government, based on advice given by ASIO.

Admiral Lord said Huawei respected the decision but the company was "not given a chance to answer any concerns that may have led to that decision".

"The actual reasons that we were not included in the NBN, we do not know," he said.

The company has since courted the likes of Admiral Lord, former foreign minister Alexander Downer and former Victorian premier John Brumby to lead the vendor's Australian board.

Among other topics, the company was grilled by the parliamentary committee on its alleged "charm offensive", and how much it had paid to send Australian dignitaries, including state and federal politicians, to the company's headquarters in Shenzhen.

Two-pronged attack

The committee hearing Friday was one of two that Huawei executives were required to front this week.

The vendor also was grilled overnight in the US, where its executives — and executives for its Chinese rival ZTE — faced a congressional hearing on cybersecurity in an attempt to dispel ongoing concerns around use of their network equipment by US telcos.

Both companies reportedly attempted to shed notions of government ownership or close ties in China, as well as denying any existence of government control or backdoors in their equipment.

"Would ZTE grant China's government access to ZTE telecom infrastructure equipment for a cyber attack?" ZTE's senior vice president for North America and Europe, Zhu Jinyun, testified, according to Bloomberg.

"Let me answer emphatically: No!"

Charles Ding, a corporate senior vice president from Huawei said the ongoing concerns were
"unsubstantiated" and "non-specific", and testified that the Chinese Government "has no influence over Huawei's daily operations, investment decisions, profit distributions, or staffing".

"There are no backdoors in any of Huawei's equipment," Ding said, BusinessWeek reported.

"Huawei would never do that."

Australian independent MP Andrew Wilkie similarly asked Admiral Lord whether the company had ever built in back doors or devices for intelligence use "at the request of any government in the world".

"No, and in saying no Mr Wilkie, but we will comply with every country's law and regulations and we're well aware of ISPs are sometimes required by a Government to give access to their systems," Admiral Lord said.

"That is an ISP level and not a manufacture level, we provide to ISPs that may be required to give Government access."

Huawei and ZTE were criticised by the US committee as being uncooperative with its questions and calls for evidence.