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Telecom Gear: Link security with the go-local policy
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Col (Dr) P K Vasudeva | Date:18 May , 2013 0 Comments
Col (Dr) P K Vasudeva
Col (Dr) P K Vasudeva is a defence analyst and commentator.

The National Security Council (NSC) has backed the proposed policy of Department of Telecom (DoT) to encourage local manufacturing of telecom gear against the backdrop security concerns, because India has all the knowhow and expertise on information technology.

Chinese firms have been accused of stealing intellectual property on a massive scale.

Citing a report from the Intelligence Bureau, which has warned against Chinese equipment manufacturers, the NSC has said that the best way to deal with the issue was to make sure that India speeds up the process for establishing manufacturing facilities within the country for which a large number of Indian IT giants like TCS, Infosys, Wipro, Cognizant Technology solutions, HCL Technologies, IBM India and so on are waiting to produce foolproof and secure IT equipment.

“There are IB reports on Chinese telecom majors such as Huawei Technologies and ZTE Corporation being part of the Chinese People’s Liberation Army (PLA) 863 programme of 1986,” the NSC said in a paper titled ‘Security implications of foreign equipment in critical infrastructure’. “Huawei in fact is one of the biggest vendors in Pakistan. This heightens security concerns,” the paper added.

A former People’s Liberation Army engineer started Huawei. ZTE was set up by state-owned enterprises associated with China’s ministry of Aerospace. Both Huawei and ZTE are privately held Companies, but are rumoured to have high-level Communist Party members on their boards. They have denied the charges.

Critics of the Chinese telecom equipment manufacturers argue that companies’ predatory pricing policy is only possible due to government subsidies. The firms have been accused of stealing intellectual property on a massive scale.

China has been pinpointed as the epicentre of an increasing number of cyber attacks on sensitive institutions worldwide.

These companies are suspected to be a conduit for China to gather information on foreign states and companies through malicious code or backdoors in hardware. China has been pinpointed as the epicentre of an increasing number of cyber attacks on sensitive institutions worldwide.

Indian law enforcement agencies have been expressing concern over the widespread use of imported equipment, especially from China. The primary fear is that Chinese agencies can embed spyware into these equipment which would not only allow them to snoop into conversations but also get the ability to shut down telecom networks in India. Companies including Huawei and ZTE have repeatedly denied the allegations of being spies for the Chinese government.

In the latest development to highlight the sensitive terrain that the United States and China are navigating on economic issues, a House committee issued a blistering bipartisan report recently that accused two of China’s largest telecommunications companies of being arms of the government that had stolen intellectual property from American companies and could potentially spy on Americans.

The House Intelligence Committee said that after a yearlong investigation it had come to the conclusion that the Chinese businesses, Huawei Technologies and ZTE Inc were a national security threat because of their attempts to extract sensitive information from American companies and their loyalties to the Chinese government.

…the US and Australia, have blocked the Chinese vendors from supplying equipment, it may not be practical for India to impose any ban on any international player as it could lead to creation of monopolistic cartels in the market.

The companies sell telecommunications equipment needed to create and operate wireless networks, like the ones used by Verizon Wireless and AT&T. Many of the major suppliers of the equipment are based outside the United States, creating concerns here about the security of communications.  Those concerns are most acute about Huawei and ZTE because of their close ties to the Chinese government, which the committee said has heavily subsidized the companies. Allowing the Chinese companies to do business in the United States, the report said, would give the Chinese government the ability to easily intercept communications and could allow it to start online attacks on critical infrastructure, like dams and power grids.

President Obama has also taken a tougher stance on China recently. Late last month, Mr. Obama, through the Committee on Foreign Investment, ordered a Chinese company to divest itself of interests in four wind farm projects near a Navy base in Oregon where drone aircraft training takes place. It was the first time a president had blocked such a deal in 22 years.

The Obama administration has also filed a case at the World Trade Organization (WTO) in Geneva accusing China of unfairly subsidizing its exports of autos and auto parts, the ninth trade action the administration has brought against China.

It has come to light that internal documents from former employees of Huawei that had supplied services to a “cyberwarfare” unit in the People’s Liberation Army.

The United States government, the report said, should go through the Committee on Foreign Investment in the United States, an interagency panel that reviews the national security implications of foreign investments, to carry out its recommendations. It also said that committee should block any mergers and acquisitions involving the Chinese companies and American businesses.

In the course of the investigation, the House committee said it had uncovered evidence of economic espionage — and that they planned to hand over the evidence to the F.B.I.

The national security cannot be compromised in view of the China’s established capabilities of effective cyber warfare will be a great threat to DoT’s secure communications.

Former and current employees for Huawei, the report said, told investigators for the committee that the company had committed “potential violations” in the United States related to immigration, bribery, corruption and copyright infringement.

NSC said that though a number of countries, including the US and Australia, have blocked the Chinese vendors from supplying equipment, it may not be practical for India to impose any ban on any international player as it could lead to creation of monopolistic cartels in the market. Instead, it has proposed a two-pronged approach to deal with the issue including encouraging domestic manufacture of telecom equipment and strengthening measures to test and certify equipment to mitigate security vulnerabilities. This is in line with the DoT’s proposed policy that makes it mandatory for equipment suppliers to set up local manufacturing units.

According to DoT, the law enforcing agencies will be able to screen equipment for spyware if it is made in the country. But under this policy, even the European and American vendors will be forced to set up manufacturing facilities in India.

The Commerce Ministry has, therefore, raised objections on grounds that the policy would not conform to international trade treaties. The Prime Minister’s Office had also asked DoT to explain how it proposes to link security concerns with the go-local policy. This is despite the fact that the NSC falls under the PMO’s purview.

Unfortunately, the commerce ministry, PMO, DoT and NSC are not on the same grid as far as the national security is concerned. A NSC meeting should be held to take a uniform decision keeping in view the national security concerns of IB, NSC and DoT. The national security cannot be compromised in view of the China’s established capabilities of effective cyber warfare will be a great threat to DoT’s secure communications.

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The views expressed are of the author and do not necessarily represent the opinions or policies of the Indian Defence Review.

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