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Huawei decision looms over NZ

Analysis: The Huawei saga claimed its most high-profile victim yet this week, with British defence secretary Gavin Williamson sacked from Cabinet by Prime Minister Theresa May for allegedly leaking details of the government’s decision to allow Huawei into Britain’s 5G network.

This latest episode is symptomatic of the issue as a whole. While Williamson denies leaking the details of the secret meeting to the media, his motivation for doing so was clear: shoring up his credentials as a security hawk ahead of a potential bid for the Tory leadership.

Reporting on the issue has been confusing: the Financial Times pointed out that letting Huawei into the network has “snubbed and angered the United States", while the Guardian noted that Huawei being banned from the network’s core risked agitating China.

The US, which has an effective ban on the use of Huawei technology in its 5G network, is known to be lobbying heavily against the company’s participation in the networks of allies. China, where Huawei is headquartered, is obviously keen that such a ban isn’t held.

Very little, funnily enough, has been said about the technology itself and whether it is robust enough to play a part in a secure, modern 5G network.

But the British case just shows the three-dimensional chess at play in each decision. On the one hand, it's an obvious story of geopolitics and security, which ultimately asks us whether or not we trust China and the companies based there. On the other hand, every country’s domestic story is different.

The Huawei story in the UK has, like everything else, been hijacked by Brexit and Theresa May’s dogged but tenuous leadership of the Tory Party. In the US, the episode has played out against the backdrop of the country’s cooling relationship with China.

It’s not to say that each decision was not made on the merits of security - it was. But in each case, the decision was so much more than that.

Which is what makes the New Zealand case so interesting.

Spark case still open

Contrary to much reporting, New Zealand has not banned Huawei. We haven’t banned anyone and likely never will under the current legislation.

The law that governs whether or not Huawei will be allowed into the network here is the Telecommunications (Interception Capability and Security) Act, commonly known as TICSA.

The law doesn’t operate on the level of companies and for that reason it can’t simply ban Huawei. Instead, telcos like Spark, Vodafone and 2degrees submit plans for their networks to the GCSB, which then decides whether or not they meet its security requirements.

The process is long, and has several stages of potential appeal. Hundreds of applications have been made for new networks or alterations to existing ones and the GCSB has raised concerns over several. If the GCSB identifies a problem, telcos have the choice of either withdrawing the application, or working the GCSB to mitigate its concerns before resubmitting.

The process effectively depoliticises decisions over new networks. Ultimately, a telco could go through several stages of appeal for the GCSB Minister, currently Andrew Little, to make a final decision, but in reality the decision rests with the security services.

It also means that decisions are made about networks rather than companies. This doesn’t mean that companies aren’t themselves a threat - there is some evidence to suggest that the decision over the Spark network is over specific concerns about Huawei as a company - but it means that short of other action by the Government, New Zealand doesn’t actually ban companies.

The current decision over Spark’s 5G network is still open. The GCSB identified “significant national security risks” in the initial application, but Spark could still choose to work through the agency’s concerns.

Is it Huawei?

Exactly what these concerns are is a matter of some conjecture. Only the GCSB and select Spark employees with security clearance have seen the full report. Huawei has not seen the concerns raised by the GCSB because under the TICSA law, issues are dealt with between the telco and the GCSB, not technology providers. The legislation is set up this way because each network is commercially sensitive and should not be shared.

There is the strong suggestion that at least some of the “significant national security risks” identified by the GCSB were to do with Huawei as a company, rather than specific technology.

Part of this was to do with the way the GCSB’s decision was announced: in a press release, quite early into the TICSA process. The fact that Spark chose not to appeal further before going public with the GCSB’s decision suggests that whatever was uncovered was serious enough that the telco felt it had few other options. One of those concerns could be the company, Huawei, itself.

5G - a cell tower on every street corner

Huawei is a long-standing part of New Zealand’s cell networks. So far, its participation has raised eyebrows among security hawks, but little real concern.

The debate over 5G is different on two fronts: it’s simultaneously more critical to our daily lives, and more vulnerable to attack.

Conventional cellular networks can be separated into the core and peripheral parts. The core is often described as the brain of the cellular network. It’s the most vulnerable part to cyber-attack because it could potentially bring down the whole network. The periphery represents the technology in cell towers, which is slightly less of a target - if a tower goes down it doesn’t take the whole network with it.

The reason 5G is different in this regard is to do with just how critical it will become to our daily lives.

The technology is incomparably faster than 4G. Not only does it offer download speeds potentially100 times faster than 4G, but it reduces latency - the time between asking a computer do something and getting a response.

This will be a key enabler for what’s known as “the internet of things”. It will allow thousands of autonomous vehicles to take to the streets and connect everything from coffee machines to pacemakers.

This can only be achieved by operating on a higher part of the electromagnetic radio spectrum, which allows massive amounts of data to flow through it. But this brings challenges. These higher parts of the spectrum, called millimetre waves, are more difficult than parts of the spectrum used by previous networks. According to The New Yorker, everything from walls to foliage, human bodies and - most interestingly - rain, can block the waves’ passage.

The way to mitigate this is by having far more cell relay stations: every city block and building will need one. According to the same New Yorker article, 13 million towers will be needed to deliver 5G to half the American population at a cost of US$400 billion. To put that in perspective, US$400 billion is just under twice the size of New Zealand’s entire GDP.

Here too is where the core-periphery distinction gets difficult. To deliver that low latency, key parts of the core of the network are being migrated to the periphery, making them closer to the end user but also more vulnerable to hacking.

To mitigate security concerns, Huawei has said it will not play a part in the core of New Zealand’s 5G network, and the UK’s decision this week barred the company from the core of UK 5G networks. EE, a British telco, has even started ripping Huawei components out of its 4G core.

The problem with keeping sensitive companies out of the 5G core is that in 5G the core isn’t necessarily core any more.

What are people worried about?

The concerns around Huawei are inextricable from fears about the rise of China. Technically, the company is an employee-run cooperative, distinct from the Chinese state. In practice, however, security experts are concerned that in communist China, no company is truly independent of the ruling Communist Party.

There’s also the thorny issue of Chinese law, which effectively compels Huawei to turn over sensitive information to the Chinese government if it so requests. The company’s own legal advice says that Huawei’s New Zealand arm will be breaking domestic law if it does this, and would therefore be unable to comply.

However, the company has been accused of transferring sensitive information back to China. In January 2018, French newspaper Le Monde found that Huawei servers at the African Union’s headquarters in Addis Ababa in Ethiopia had been mysteriously turning on at midnight each night to transfer data to servers in Shanghai. At 2am, the servers would go quiet again, ready for another day’s work. This had allegedly continued for 1825 days in a row.

Huawei denies the data was maliciously stolen.

But an even more pressing concern isn’t about information being stolen at all - it’s about safety. This concern was raised in Australia by spy chief Mike Burgess. With 5G likely to work its way into every part of our life, hacks threaten to compromise critical infrastructure, like electricity and water supplies.

Is it Five Eyes or just a trade war?

The dispute is playing out against the backdrop of trade tensions between the US and China. Huawei is recognised as the market leader, with product that is both faster and cheaper than its nearest competitors.

It’s been suggested that security concerns raised by the United States are simply a new front in the country’s trade war with China, rather than serious concerns about security.

While the GCSB denies it was pressured into its decision, the Sydney Morning Herald has reported US allies were getting the hard word on using Huawei technology

Others have pointed out American hypocrisy on sensitive security issues. The Edward Snowdon leaks showed the US was more than happy pressuring its own companies into sharing deeply sensitive information with the government.

One person has described the issue as a litmus test for China’s role on the world stage and a referendum on how much the West really trusts the country to play by the rules. The US, for all its faults is a liberal-democratic devil its allies know. China, for all its technological wonder, is a devil we don’t.

The ultimate resolution to the Huawei question might not be about the company at all, but the leverage China chooses to exercise, and what the US can offer its allies for toeing the line.