Can government lock down the telecom supply chain?
- By Derek B. Johnson, Mark Rockwell
- May 17, 2019
On May 15, the White House issued an executive order declaring foreign supply chain threats to the U.S. telecommunications system a national emergency and giving the Commerce secretary power to prohibit transactions involving information communications technology or services that are "designed, developed, manufactured, or supplied by persons owned by or controlled by or subject to the jurisdiction or direction of a foreign adversary."
While the order does not mention Huawei, the administration has been mulling the measure for more than a year as a way to address years-long national security concerns around the Chinese telecom giant, as well as similar threats from companies or entities that the U.S. government believes could pose an undue risk to telecommunications critical infrastructure.
In a more direct blow, Commerce also placed Huawei and its affiliates on the Bureau of Industry and Security's Entity List, meaning American companies must obtain a special license to sell Huawei products. Those license requests can be denied on national security grounds.
The feeling in the Senate is much the same.
At a May 14 Senate Judiciary Committee hearing on the developing 5G market and potential threats from Chinese companies, Sen. Lindsey Graham (R-S.C.) said, "We're telling the world, 'If you buy Chinese 5G stuff, you're not doing business with us.'"
"Every nation should think long and hard" about opening up their telecommunications infrastructure to potential data theft and espionage from Chinese-made 5G network equipment, committee Ranking Member Sen. Dianne Feinstein (D-Calif.) said.
The senators and U.S. cybersecurity experts are concerned about the installation of Huawei and ZTE equipment -- not only in U.S. telecomm infrastructure, even though U.S. carriers have vowed not to use it -- but in the telecom infrastructure of European allies.
U.S. officials believe the administration's actions will significantly hamper Huawei's ability to compete in a global race to implement 5G telecommunication networks, something those officials have told allies and businesses would represent an unacceptable risk to national security.
The U.S. believes that domestic laws in countries like China and Russia legally compel local businesses to aid intelligence agencies and perhaps even facilitate espionage. Huawei and other foreign companies have repeatedly denied that this is the case and demanded that the U.S. provide evidence showing they are working in tandem with their governments.
Meanwhile, ongoing work at the federal Information Communications Technology (ICT) Supply Chain Task Force will help to inform Commerce Department regulations designed to crack down on foreign-directed threats to the U.S. telecommunications supply chain, according to a Department of Homeland Security official.
Bob Kolasky, director of the National Risk Management Center at DHS and co-chair of the ICT Supply Chain Task Force, said the group's work mapping out national critical functions -- services so vital they would disrupt the American way of life if shut down or compromised -- will underpin new rules governing when to ban transactions or sales involving foreign-made telecommunications equipment. Those efforts and the Commerce regulations are pursuant to the new White House executive order on supply chain security.
"Where are there functions that we absolutely have to have assurance that they're going to function, that the integrity and availability of the functions are going to be there, and how do the supply chains work and where are there common elements where it makes sense to deploy additional authorities?" Kolasky said at a May 16 supply chain conference hosted by the U.S. Chamber of Commerce. "And those recommendations, that assessment, will inform how the secretary of Commerce [develops new regulations.]"
This report is a combination of two articles that were first posted to FCW, a sibling site to GCN.
Derek B. Johnson is a former senior staff writer at FCW.
Mark Rockwell is a senior staff writer at FCW, whose beat focuses on acquisition, the Department of Homeland Security and the Department of Energy.
Before joining FCW, Rockwell was Washington correspondent for Government Security News, where he covered all aspects of homeland security from IT to detection dogs and border security. Over the last 25 years in Washington as a reporter, editor and correspondent, he has covered an increasingly wide array of high-tech issues for publications like Communications Week, Internet Week, Fiber Optics News, tele.com magazine and Wireless Week.
Rockwell received a Jesse H. Neal Award for his work covering telecommunications issues, and is a graduate of James Madison University.
Click here for previous articles by Rockwell.
Contact him at [email protected] or follow him on Twitter at @MRockwell4.