Citing cyber-security concerns, Japan-based corporation Softbank has agreed with US officials to phase out and replace telecommunications equipment manufactured by Chinese companies with close ties to Beijing.
Looking to gain US approval for their recent acquisition of US-based network service provider Sprint Nextel, Softbank will allow US law enforcement officials to oversee equipment changes, including routers, servers and switches manufactured by firms Huawei and ZTE, the New York Times reported.
US Congressional representatives claim these two manufacturers aid the Chinese government in acts of cyber espionage, warning the equipment could provide network backdoors for hackers working for the People’s Liberation Army.
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In a report issued last year by the House Permanent Select Committee on Intelligence, lawmakers said Huawei could be violating US laws, citing industry experts and former employees.
“The investigation concludes that the risks associated with Huawei’s and ZTE’s provision of equipment to US critical infrastructure could undermine core US national-security interests,” the report said.
In light of such concerns, Softbank assured members of Congress that any equipment manufactured by Huawei would not be integrated into US systems. They also pledged to replace Huawei equipment used by Clearwire, a cellular firm Sprint Nextel is attempting to acquire.
Mike Rogers (R-Mich.), author of the controversial Cyber Intelligence Sharing and Protection Act, recently met with Softbank officials, who promised they would not use networking and infrastructure equipment manufactured by Huawei.
“I have met with SoftBank and Sprint regarding this merger and was assured they would not integrate Huawei into the Sprint network and would take mitigation efforts to replace Huawei equipment in the Clearwire network,” Rogers said in a statement on Thursday.
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The cooperation between Softbank and the United States government is a worrying development for Huawei, the world’s largest manufacturer of telecommunications equipment.
“If government approval of the transaction is somehow contingent on an agreement to restrict purchase of equipment from any vendor based on the flag of heritage, then it is a sad day for free and open global trade, and it does nothing to secure the network,” Huawei spokesman William Plummer told the Washington Post.
“Everyone is global, and every company faces the same cyber-challenges.”
IT security firm Mandiant reported in February the exploits of a unit in the People’s Liberation Army, claiming the group is actively engaged in breaching security and stealing information from 141 corporations around the globe.
“They’re responsible for so many different intrusions and they have a very broad level of access,” said Mandiant's managing director of threat intelligence at the time.
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The Obama administration, meanwhile, is ramping up efforts to defend against cyberattacks, adding 13 offensive cyber warfare “teams.”
"Let me be clear, this defend-the-nation team is not a defensive team; this is an offensive team that the Department of Defense would use to defend the nation if it were attacked in cyberspace," National Security Administration Director Gen. Keith Alexander told the Senate Armed Serviced Committee this month.
Part of the effort to protect against cyber attacks is the Cyber Intelligence Sharing and Protection Act, which would allow government agencies to share internet traffic information with technology companies to keep private corporations better informed of looming threats against digital infrastructure, much like the agreement between Softbank and the US government.