Yesterday the House Intelligence Committee released a report on whether Chinese telecommunication firms Huawei and ZTE should have greater access to the U.S. market. As you could probably guess, the answer was no. The report got some pretty good fanfare.
Anywho, here’s the actual report.
Via the executive summary:
The House Permanent Select Committee on Intelligence (herein referred to as “the Committee”) initiated this investigation in November 2011 to inquire into the counterintelligence and security threat posed by Chinese telecommunications companies doing business in the United States. Prior to initiating the formal investigation, the Committee performed a preliminary review of the issue, which confirmed significant gaps in available information about the Chinese telecommunications sector, the histories and operations of specific companies operating in the United States, and those companies’ potential ties to the Chinese state. Most importantly, that preliminary review highlighted the potential security threat posed by Chinese telecommunications companies with potential ties to the Chinese government or military. In particular, to the extent these companies are influenced by the state, or provide Chinese intelligence services access to telecommunication networks, the opportunity exists for further economic and foreign espionage by a foreign nation-state already known to be a major perpetrator of cyber espionage.
. . .
In sum, the Committee finds that the companies failed to provide evidence that would satisfy any fair and full investigation.
. . .
Based on this investigation, the Committee provides the following recommendations:
Recommendation 1: The United States should view with suspicion the continued penetration of the U.S. telecommunications market by Chinese telecommunications companies.. . .
Recommendation 2: Private-sector entities in the United States are strongly encouraged to consider the long-term security risks associated with doing business with either ZTE or Huawei for equipment or services. U.S. network providers and systems developers are strongly encouraged to seek other vendors for their projects. Based on available classified and unclassified information, Huawei and ZTE cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and to our systems.
. . .
Recommendation 5: Committees of jurisdiction in the U.S. Congress should consider potential legislation to better address the risk posed by telecommunications companies with nation-state ties or otherwise not clearly trusted to build critical infrastructure. Such legislation could include increasing information sharing among private sector entities, and an expanded role for the CFIUS process to include purchasing agreements.
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