15 February 2014

U.S./SOUTH KOREA COMMUNICATIONS WON’T USE HUAWEI GEAR; FEAR EQUIP COULD BE USED FOR SPYING

By ADAM ENTOUS
February 14, 2014

http://online.wsj.com/news/ articles/ SB1000142405270230370430457938 1742601220138#printMode

SEOUL-South Korea has addressed U.S. concerns about letting a Chinese telecommunications company develop the country’s advanced wireless network by agreeing to route sensitive U.S. and South Korean communications over separate networks, U.S. officials said.

The quiet U.S. lobbying campaign against China’s Huawei Technologies Co. in South Korea followed a similar U.S. push to dissuade another close ally-Australia-from using the company in building critical telecommunications networks.

In meetings with their South Korean counterparts in recent months, senior U.S. officials pointed to what Washington sees as a risk that Huawei’s equipment could be used for spying on communications among the close partners, as well as compromise secure networks used by American military personnel and intelligence officers in South Korea, U.S. officials said.

To address these security concerns, South Korea decided to make changes to the project so that sensitive South Korean government communications won’t pass through Huawei equipment, said U.S. officials briefed on the discussions.

Likewise, Huawei gear won’t be used or connected to U.S. military bases in South Korea in a move meant to protect American communications, the officials said.

The Pentagon was concerned the equipment could be used to intercept military-to-military communications and launched a review of how the telecommunications deal would affect U.S. forces in South Korea, officials said.

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U.S. officials have sought to air their concerns about Huawei privately with the South Korean government rather than publicly because the Obama administration didn’t want to be seen as trying to influence the commercial decisions of a key ally.

U.S. officials said the South Korean government had concerns of their own about the implications of using Huawei, prompting the changes.

“While the United States has expressed concerns in the past, these decisions were made by the Republic of Korea and the Republic of Korea alone,” said State Department spokeswoman Jennifer Psaki.

South Korean authorities, including the presidential office, the defense ministry, the communications ministry and the nation’s spy agency, all declined to comment.

“The ministry has little to say about this case because it is not involved in what can be confidential and private business information,” said an official handling the issue at the communications ministry.

The Chinese company has denied U.S. charges and declined to comment on any changes by South Korea to address U.S. and South Korean security concerns.

“Huawei cannot speak to any such seemingly-political arrangements. However, from a technology and network-integrity perspective, Huawei can reaffirm that its gear is globally-deployed, proven and trusted, connecting almost one-third of the world’s population,” said William Plummer, vice president of external affairs at Huawei Technologies.

In 2011, the U.S. excluded Huawei from taking part in the building of a U.S. wireless network for emergency responders, citing national-security concerns.

In 2012, Australia blocked a Huawei unit from competing for contracts linked to the country’s broadband network.

U.S. concerns over Huawei’s expansion have added to rising tensions with China. U.S. military and intelligence officials have long warned China poses a cyberespionage threat to U.S. defense systems and companies.

U.S. officials said the South Korea telecommunications network was of particular concern to Washington because of the presence of U.S. forces there to help defend the country againstNorth Korea.

U.S. Secretary of State John Kerry visited South Korea on Thursday, seeking to reassure anxious allies in the region worried about North Korea’s nuclear program and China’s growing military clout.

Mr. Kerry arrived in Beijing on Friday for meetings with Chinese leaders on issues expected to range from North Korea to cybersecurity.

The U.S.’s own aggressive espionage activities have come under increased global scrutiny because of leaks by National Security Agency contractor Edward Snowden.

U.S. officials and lawmakers had said that their concerns centered on plans by South Korea to use Huawei in building the country’s advanced long-term evolution network nationwide.

The Chinese government and Huawei say U.S. concerns about the company’s activities are unfounded.

Huawei charges less than many of its global competitors, making it an attractive business choice and complicating the U.S. pitch on national-security grounds.

Two U.S. senators, Senate Foreign Relations Committee Chairman Robert Menendez of New Jersey and Senate Intelligence Committee Chairman Dianne Feinstein of California, raised concerns about the South Korean deal in a November letter to Mr. Kerry, Defense Secretary Chuck Hagel and Director of National Intelligence James Clapper.

In the letter, the lawmakers said the choice of Huawei to “develop and/or supply the Republic of Korea’s advanced LTE telecommunications backbone raise serious questions and potential security concerns.”

-Kwanwoo Jun contributed to this article

Write to Adam Entous at adam.entous@wsj.com

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