09 october 2012

Chinese telecom presence in Canada: security threat?



A US government intelligence committee has just come out with very stern and direct warnings about economic and security threats posed by dealing with Chinese telecommunication companies.  The concerns are contained in a report following an 11-month investigation into Huawei Technologies Ltd and ZTE Corp. 

Both the US and Australia have banned Huawei from participating in major telecommunications projects, and have also warned against installing telecom components from the company

In Canada, security agencies have also been sounding warnings about potential threats posed by Huawei, ZTE, and other Chinese companies.
Huawei  already does business in Canada with Bell, Telus, Sasktel and Wind mobile. The Chinese company is working out a possible deal for a secure network for the federal government.

Huawei has long argued there is no evidence to link it with hacking or any espionage efforts, and both  Huawei and ZTE reject any such allegations

RCI’s Marc Montgomery spoke with Michel Juneau-Katsuya about these concerns.  Mr Juneau-Katsuya is a former senior intelligence officer and manager with Canada’s security agency CSIS with over 30 years expertise in intelligence information.  He is now the CEO of The Northgate Group, a security consulting firm.

(CBC video)

On a US network TV current affairs show this past weekend, the intelligence committee chairman said U.S. companies considering purchases from Huawei should “find another vendor if you care about your intellectual property; if you care about your consumers’ privacy and you care about the national security of the United States of America,”

A classified annex in the report provides “significantly more information adding to the committee’s concerns. The information cannot be shared publicly without risking U.S. national security.”

Huawei and ZTE are rapidly becoming “dominant global players” in the telecommunications market, the report said. It noted that telecoms are intertwined with computerized controls for electric power grids; banking and finance systems; gas, oil and water systems and rail and shipping.

In Canada, Huawei is already doing business with Bell, Telus, and Wind mobile, and is working out a possible deal for a secure network for the federal government. Interestingly, according to a story in the Toronto Sun newspaper, Ontario gave Huawei $6.5 million in taxpayer grants to help set up operations in Ottawa and Markham.

Canadian security and intelligence expert Michel Juneau- Katsuya, CEO of the Northgate Group, says in spite of recent federal government claims, we are far behind in developing security systems.  He adds, that both government officials at all levels, and business people, should be very aware of the concerns being raised by Canada’s spy agency, CSIS (Canadian Security Intelligence Service) and internationally, and act accordingly.

Intelligence expert Michel Juneau-Katsuya,former senior agent and manager at CSIS, now CEO of Northgate Group, a security risk-assessment agency.

In terms of economics and intellectual property, there are strong indications that the collapse of the once international Canadian Giant Telecom, was due to its dealings with Huawei.  Mr. Juneau-Katusya also says that corporate espionage is costing Canada billions of dollars a year.  He adds that in terms of state security, telecom systems around the world are all linked, and seemingly “secure” systems can be used to access other systems through various “back doors” built into hardware and software.  He notes that Canada’s allies may become increasingly wary of sharing information or including Canada in delicate economic or security discussions because ofthis.

Such security concerns are echoed by professor David Skillicron at the school of computing at Queen’s University in Kingston, Ontario. He says,"If you buy equipment or software that's essentially produced by the government of another country, then you have no control over what that software or hardware might be doing that you can't see,"  Thomas Dean a professor in the department of electrical and computer engineering at Queens adds, “ You can hide things in software. You can hide things in hardware. Hardware components can do all sorts of things. They can record things. They can transmit things. They can also be a back door for disabling" parts of a system.”

Mr. Juneau-Katsuya says, various infrastructure systems throughout North America are subject to regular “pings”, traced to foreign hackers, usually coming from China. These are thought to be tests to see if they can get into the systems, like electrical, water, and transportation grids, and be able to override and control them. This would be very dangerous in a conflict situation.

The US intelligence committee noted that Huawei and ZTE are not the only companies presenting a risk to infrastructure, but are the biggest Chinese firms trying to market critical network equipment to the US. The report adds. Beijing has the “means, opportunity and motive” to use them to its own ends, it added.
(MM with notes from CBC news

CBC NEWS May 17, 2012, "how telecom systems can be compromised

CBC NEWS  Oct 09 2012 “China firms pose security risk, US panel warns”

TORONTO SUN newspaper Oct 08 2012   “Ontario linked to controversial Chinese firm”

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