On Banning Huawei, ZTE

Ok, enough people have asked me my thoughts on this subject that I will chime in. US lawmakers last week released a report recommending that Huawei and ZTE be banned from the market, which was quickly supported by Canada and a few others. I’m rather skeptical of the whole thing for the following reasons:

• It’s an election season, and hence it’s China-bashing time. There are few groups the US Congress can be sure have a lower approval rating than themselves, and are hence good for a quick national security scare to distract with.
• Forgive me, but the US Congress knows about as much about a router as it does about the internet’s construction from a series of tubes.  These are the guys that were pushing SOPA/PIPA after all.
• The whole idea of sending out routers with backdoors for spying or kill switches seems so utterly stupid. If you’re of my generation, you remember a Bugs Bunny and Daffy Duck cartoon where they are outdoing each other with magic tricks in front of an audience. Daffy wins by doing a trick he can only do once: literally blowing himself up. For Huawei and China, playing games with router back doors would be a trick one can only do once. Forever.  Get caught and it’s all gone.
• People have a silly impression of the Chinese leadership. What do they want? In practical terms, look at Bo Xi Lai and his overseas billions. Such things in China come from surreptitiously owning big pieces of large companies, like Huawei via sweetheart deals by family and friends. That is what most of these supposed military connections come from at their source. Using Huawei or ZTE in this way would kill the golden goose.
• To understand Chinese military influences on a company like Huawei or ZTE, you follow the money not the data. Power certainly resides in the military, but those who wield it have been for decades now doing so primarily to increase their own wealth and commercial power.  They’re not Dr. Evil, they’re Gordon Gecko.  Who benefits from greater market penetration by Huawei and ZTE? And do they benefit from threatening that by playing James Bond games with the equipment they sell? No.
• Spying on the US is so much easier than trying to sift through an 8Tbps stream of video, tweets, and Facebook status updates. And it’s probably much easier to find a hack for routers already widespread in the internet that will do what you want than to convince everyone to buy them.

When it comes down to it, this whole thing has always been about commercial interests. Huawei disrupts wherever it goes, underpricing everyone to gain marketshare and engaging in some rather naked commercial spying/copying. Hence, nobody wants them in, and the security question is just a way to do that without looking protectionist.  And nobody wants to talk about the patent system, which is just a legal morass that can’t do the job and can’t be fixed.

Nevertheless, the valid argument for keeping out Huawei would come from the fair trade and intellectual property point of view. Calling them a security threat is a cop out that is little more than a resurgence of the ‘Yellow Peril’ scaremongering a century later.  I can only hope that after the campaigns are over, lawmakers will turn their attention back to the domestic issues the US faces yet has been paralyzed to act on for so long.

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