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Huawei and ZTE Network Security Threats

Level 9

Have you heard about Huawei and ZTE? An October 8, 2012 Reuters article, U.S. lawmakers seek to block China Huawei, ZTE U.S. inroads, states that the U.S. House of Representatives Intelligence Committee has recommended “U.S. telecommunications operators…not do business with China's top network equipment makers because potential Chinese state influence on the companies poses a security threat.” The Intelligence Committee issued this statement in a report based on nearly a year’s worth of investigating U.S. complaints about Huawei and ZTE telecommunications equipment.

This recommendation applies to networking hardware and software used in large-scale networks. Not individual telephones, which Huawei and ZTE also make. According to the Intelligence Committee’s report, companies that used Huawei equipment say Huawei routers performed a number of strange behaviors – such as sending large data packs to China late at night.

Huawei and ZTE are two of the largest network hardware companies in the world. Huawei is the second largest network hardware company in the world. ZTE is the fifth largest. To get the full story on just how significant this possible economic espionage case is, read the original Reuters article.

This situation strikes me as incredibly important for a number of reasons. For starters, what does this mean for U.S.-China relations and existing agreements? How will these allegations change the global market, if at all? And what about U.S. companies already using Huawei and ZTE equipment? Do they ditch what they have and start over? Is there a penalty for not doing so? Do these companies even want to keep their equipment?

I’m really curious to get your opinions on this situation – so tell me folks, what do you think? And what do you think the end results will be? Based on the results (and even the allegations) of this case, do you think we’ll see any changes in the way we do networking?