Huawei voices dismay at Australia network exclusion

The Australian unit of Huawei Technologies Co. said Monday it hopes to play a role in building the country's high-speed Internet project but is disappointed by a government decision to exclude the Chinese company from the 36 billion Australian dolla (US$37.6 billion) National Broadband Network over reported concerns about cyberattacks from China. "Huawei's business in Australia is not reliant on the NBN [National Broadband Network]," said Jeremy Mitchell, the company's corporate affairs director in Australia, in a statement. "While we're obviously disappointed by the decision, Huawei will continue to be open and transparent and work to find ways of providing assurance around the security of our technology," Huawei said in a separate statement. "While network security is an issue for all vendors, the real risk is missing out on the innovation China has to offer." The Australian Financial Review newspaper reported over the weekend that federal government officials late last year told Huawei not to bother bidding for supply contracts for the network, Australia's largest infrastructure project, which aims to connect 93% of Australian homes and businesses to the Internet with optical fiber. Last year, Australian media reported that computers used by Prime Minister Julia Gillard, then foreign minister Kevin Rudd and several other government ministers were hacked, allegedly by Chinese intelligence services. The government declined to comment on the reports at the time. A U.S. intelligence report released in November concluded that hackers operating from China—both government-affiliated and private-sector—are the world's most "active and persistent" perpetrators of industrial spying. The report cited a number of Chinese attacks, including one targeting Google GOOG -0.54% Inc.; the theft of data from global energy companies; and theft of proprietary data such as client lists and acquisition plans at other companies. Late last year, the U.S. Congress launched an investigation into whether Huawei and other Chinese telecommunications companies pose a potential national-security threat as they expand in the U.S. The probe aimed to examine how Chinese companies are supplying components of U.S. telecom systems and the security threats that activity may pose. It also aimed to look at the intelligence-collection capabilities that access to U.S. systems would provide a foreign government. The office of Australia's attorney general, Nicola Roxon, in a statement Sunday didn't specify that Huawei was barred from bidding on the NBN, saying only that the project is set to become the backbone of Australia's information infrastructure. "As such, and as a strategic and significant government investment, we have a responsibility to do our utmost to protect its integrity and that of the information carried on it," a spokesman said in the statement. "This is consistent with the government's practice for ensuring the security and resilience of Australia's critical infrastructure more broadly." Huawei says in a fact sheet that it established a headquarters in Australia in 2004, employs 800 people and has a localized board, which includes former Australian foreign minister Alexander Downer and Victoria state premier John Brumby.