Chinese spying suspicions

Network equipment manufacturers (NEMs) Huawei and ZTE also faced a political battle this year. An October 2012 report from the U.S. House Permanent Select Committee on Intelligence called into question the possible security threat created if companies in the US and abroad were to use Huawei and ZTE’s gear to build out networks, and demanded information about the companies’ business practices.

“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,” stated the report.

“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.”

Following the publication of its report, the House of Representatives called on US telcos to avoid using Huawei and ZTE’s equipment. Meanwhile, Australia has banned Huawei from working on its National Broadband Network (NBN), and Canada and the European Union opened similar investigations into possible spying by China through back-door access built into Huawei and ZTE gear. Little did any of these governments know, however, that concerns over Chinese spying would be eclipsed by the US government’s own practices or that Huawei would publicly announce its exit from the US market as not to interfere with US-Chinese relations.

US spying confirmed

Enter Edward Snowden. Whistle-blower, former National Security Agency contractor, traitor—no matter how you choose to describe him, he brought the world’s attention to the doorstep of American CSPs when he released a flood of NSA documents detailing the US government’s snooping on even the most mundane email and voice communications via a program called PRISM.

“I understand that I will be made to suffer for my actions,” he wrote in a letter sent to the UK’s The Guardian along with his first batch of leaked documents. However, “I will be satisfied if the federation of secret law, unequal pardon and irresistible executive powers that rule the world that I love are revealed even for an instant.”

If there were any question about CSPs’ cooperation with the US government in spying on its citizens, on June 10, one day after The Guardian revealed Snowden’s identity, federal law enforcement descended on Lavabit, the encrypted-email service based in Texas that Snowden used to transmit the NSA’s documents. Less than two months later, reportedly under pressure from the government to divulge information about its customers, Lavabit voluntarily closed up shop.

The revelations about US spying have also prompted the international community to find ways to avoid prying eyes in America. Brazil’s president, Dilma Rousseff, is looking for an alternative to US-based internet services, including a subsea fiber-optic cable that connects South America to Europe, thus bypassing the United States, according to the Indian newspaper The Hindu. Rousseff is also reportedly trying to compel companies such as Facebook and Google to store all Brazilian customer data inside the country’s borders.

German chancellor Angela Merkel recently accused the US of intercepting her mobile-phone communications. An article published in October in the German magazine Der Spiegel alleges that the US has been spying on Merkel’s phone since 2002, three years before she was elected chancellor. 

Ironically, one month earlier the German CSP Deutsche Telekom (DT) released its new secure smartphone, the SiMKo3, nicknamed the “Merkelphone” because it’s been approved to transmit classified information from the German government. DT is also marketing new email services under the label “Made in Germany,” the implication being that all transmitted data will be safely protected from the NSA and the US government’s jurisdiction.

As more and more of daily life is documented online, politics will inevitably become further intertwined with the day-to-day activities of the telecommunications industry. And as the industry’s technology evolves to reveal exploding amounts of data, the more valuable the access to that information becomes. Never has the business of telecommunications been more politically charged, nor has it been more vital to governments and corporations alike. CSPs are consolidating power and influence each and every time a user goes online—and wherever power is being consolidated, politicians can’t help but try to get in on the act.