The House Select Committee on Intelligence voted Thursday to approve a report that recommends U.S. companies and the government avoid doing business with China's two largest manufacturers of telecom equipment due to potential security risks. The panel gave voice approval to the report, which concludes a year-long investigation and confirms many of officials' fears about Huawei and ZTE, arguing they "cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and our systems." The report recommends that U.S. networking companies seek alternate vendors, since Chinese products might include security holes or back doors that can later be exploited, and recommends the government block any attempts by Huawei or ZTE to merge or acquire American companies.
Huawei and ZTE have repeatedly encountered resistance from the government as they try to expand into the American telecom market, and have previously had takeover bids for U.S. companies rejected by U.S. officials, who argue the companies cannot be trusted because of their alleged ties to the Chinese Communist Party and the People's Liberation Army. Ranking Member Dutch Ruppersberger, D-Md., said Huawei and ZTE were less forthcoming with U.S. officials than the Indian government, but said even viewing the companies' software access codes wouldn't have been enough to dismiss concerns. The bottom line is that China — and in particular Chinese telecom companies — remain a long way from being trusted in the international market, unlike some of its Asian counterparts and despite the country's dominance in technology manufacturing. U.S. policymakers could soon be joined by the E.U., which is weighing whether to investigate Huawei and ZTE on the grounds they broke trade laws. As far as American lawmakers are concerned, switches, routers, and other critical pieces of network infrastructure are one class of goods that shouldn't be stamped "Made in China."
Violence in Media Debate Pits Tech vs. Gun Lobby: While they have been largely silent since the tragedy in Newtown, Conn., gun lobbyists have been quietly working behind the scenes to place the blame with broader cultural influences rather than the availability of assault weapons and other gun control issues. Their approach has them at odds with video game makers and other tech companies, which argue no study has proven a connection between entertainment and real-life violence. Some lawmakers, including Democratic Sens. Joe Manchin and Jay Rockefeller of West Virginia, have blamed video games for exposing young people to violence at a young age. But the Supreme Court ruled last year that a California law banning the sale of violent video games to minors was unconstitutional, noting the obscenity exception to the First Amendment applies only to pornographic content. Op-Ed: Tech Trade Group Argues 2013 Will be Year of Mobile Tech in Congress. Senate Passes Netflix-backed Privacy Changes: The Senate voted Thursday to approve a bill (HR 6671) that would allow video rental companies to obtain consent to share consumers' rental history online on an ongoing basis. Previously rental companies were required to obtain affirmative consent every time they shared a consumers' rental history, a remnant of the 1988 Video Privacy Protection Act passed in the wake of of the confirmation battle over recently-deceased Supreme Court nominee Robert Bork. The online video sharing company Netflix lobbied heavily for the legislation, which will now head to President Obama's desk for a signature after it passed the House on Tuesday by voice vote. Some privacy advocates have criticized the changes, arguing the VPPA is one of the nation's strongest privacy laws and shouldn't be weakened to appease a single company. Wyden Introduces Data Cap Legislation: Sen. Ron Wyden, D-Ore., introduced a bill on Thursday that would institute industry-wide data measurement standards for Internet service providers, in hopes of ensuring that data caps are used by ISPs to manage their networks rather than simply raise revenue. ISPs and wireless carriers have begun shifting from unlimited data usage on both traditional and wireless broadband to a metered program, where consumers must pay if they exceed monthly bandwidth limits. The shift has taken place even as consumers increasingly look to stream video and other content online, which requires much more download capacity than traditional Web surfing. Critics argue the ISPs are raising rates despite being wildly profitable, and are therefore simply price-gouging consumers. Wyden's bill would attempt to ensure the caps are in place to lessen network congestion, by instructing the FCC to establish standards as to how they are used and managed. His bill would also look to ensure ISPs can't discriminate against any content, similar to the Net neutrality rules instituted by the FCC and currently under challenge from the wireless companies in federal court. This post was updated at 1:56 p.m.