Huawei is back in the headlines. This time around the news revolves around a Cisco marketing presentation titled: “Huawei’s & National Security”.  The document dates to September 2011 and was obtained and reported on by The Washington Post; it has apparently has been used by Cisco to dissuade existing and prospective customers from using Huawei’s products due to national security issues.

“Fear of Huawei spreads globally,” the report reads. “Despite denials, Huawei has struggled to de-link itself from China’s People’s Liberation Army and the Chinese government.”

John Chambers, CEO of Cisco recently shared some thoughts regarding his company’s “toughest rival” in a discussion with the Wall St Journal:

“the Chinese company doesn’t always “play by the rules” in areas such as intellectual property protection and computer security.”

Chambers continued by stating that customers and governments “know who they can trust and where there are challenges”. The statement suggests that in light of constant cyberattacks coming from China, that not only is this a national cybersecurity issue, there are serious concerns regarding cyber-espionage. Huawei is strongly seeking to increase their market share here in the U.S., after being very successful worldwide delivering products at half the price of its competitors. Thus far, Cisco and other companies have been successful in stemming the tide of infiltration through reportedly heavy lobbying and in what now appears in Cisco’s case to be straight up warnings.

Recently a U.S. House of Representatives Intelligence Committee went so far as to label Hauwei along with ZTE as security threats.  As the troubles for both Huawei and ZTE continues,  both representatives from Huawei and China’s Commerce Ministry have denounced these reports. The Commerce Ministry stated in a report on Xinhuanet that the report is based on “subjective guesswork” and “untrue evidence”.

Huawei has emerged with a statement that highlights a 15-year long business relationship with IBM as a key role in their expanding business, ostensibly much of that business likely aligned with governments throughout the world, given IBM’s customer base.

Huawei specifically has faced issues like this before. In one case they were banned from bidding on an Australian national broadband project due to security concerns. About a year ago, the company was also prevented from building a first-responder wireless network based on similar concerns. News today from Britain has them investigating these same concerns against Huawei.  Insiders have also long discussed that the secret to Huawei’s price advantages has to do with copied code and designs within their products.

Huawei and ZTE are facing an uphill struggle gaining any ground here. The congressional report was especially damning. There are few if any Chinese based companies that are not influenced by the Chinese state in some fashion, and given the amount of evidence in depth covered in the report, there is good reason to follow the recommendations. The notion that Cisco is being rather open about this warning as well in front of customers is a further indicator of these concerns and their legitimacy.

To be clear in talking about network infrastructure equipment, there is too much potential for nefarious activity, even if a product was to ship without compromise, the potential that some future soft update or intentional design flaw could lead to compromise or intentional disruption are too great.