Australia blocks Chinese-owned Huawei from bidding on national broadband plan
China’s reputation for cyber-espionage has cost the country’s largest network equipment manufacturer a shot at billions of dollars in infrastructure sales to Australia. The Australian government has moved to block Huawei from bidding on Australia’s approximately $36 billion-dollar National Broadband Network project.
The decision by Australia’s attorney general, reported March 26, was based on concerns raised by the Australian Security Intelligence Organization over the number of cyberattacks coming out of China, and that the company’s equipment would provide the Chinese government backdoors into the network.
“The National Broadband Network is the largest nation-building project in Australian history,” a spokesperson for Australian Attorney General Nicola Roxon said in a statement, “and it will become the backbone of Australia’s information infrastructure. As such, and as a strategic and significant government investment, we have a responsibility to do our utmost to protect its integrity and that of the information carried on it.”
The Australian government has cause for concern. In 2011, the computers of Australian Prime Minister Julia Gillard and then-Foreign Minister Kevin Rudd were reportedly hacked by Chinese intelligence agents. And the US defense and intelligence community have continued to warn about China’s involvement in industrial espionage.
Huawei has been alleged to have benefitted from that espionage in past: Cisco accused the company of stealing technology from Cisco, but dropped its legal claims in 2004 after Huawei stopped producing a contested product. And the US Department of Defense expressed concerns about Huawei in a 2011 report to Congress (PDF) on Chinese military and security issues, because of the company’s close ties to the People’s Liberation Army.
Those connections haven’t stopped Huawei from selling network gear elsewhere. The company has won a number of large network infrastructure supply contracts in Europe, including equipment for the deployment of LTE wireless in the UK. And Huawei has been hoping to replicate that success in Australia by bringing in local political muscle: the board of the company’s Australian subsidiary is stacked with former government officials, and chaired by the former commander of the Australian Navy, retired Rear Admiral General John Lord. The company also sponsored trips to China for members of the leadership of Australia’s Liberal Party. In fact, it was believed that Huawei was the internal favorite after the technical team for the NBN visited the company’s headquarters in Shenzen in 2010.
So the announcement has come as something of a shock to the company’s Australian executives. “This sort of whole concept of Huawei being involved in cyber warfare, presumably that would just be based on the fact that the company comes from China and everybody in China is—who’s involved with information technology is involved in cyber warfare,” said Alexander Downer, an independent director of Huawei Australia and a former Australian foreign affairs minister, told reporters for an Australian TV network. “This is just completely absurd.”