Mark Goldberg

On trust and telecommunications

It was said that the late Paul Reichmann (the head of Olympia and York, once the world’s largest real estate development company) would seal deals with a handshake. It was well known that his business partners could trust his word.

Today, business is rarely that simple. We live in a world where lawyers create terms and conditions for ‘clickwrap’ agreements prior to logging into the WiFi network at a local coffee shop with legalese that no one reads and few understand. While I can understand why these agreements came to exist, it seems to me that it is too bad there isn’t more common sense being applied.

In exchange for some web services, we give our personal information and trust it will be somewhat safeguarded, even though it seems the biggest companies in the world have betrayed that trust over and over again. In some cases, private information was compromised by outside attacks on vulnerable systems with naive levels of security measures. In other cases, the corporate culture has been to exploit user information, pushing (or breaking) the limits of what is legally or ethically permitted.

We no longer have business relationships sealed by a simple handshake, with the implicit understanding that both parties will ‘do the right thing’.

At a recent seminar I attended, a speaker from IDC in Herzliya said there are two kinds of databases in the world: those that have been hacked, and those that don’t know they have been hacked. It is a little extreme, but it expresses a message that should raise the level of alertness among consumers and corporations alike.

In this environment, how do we assess levels of trust for suppliers of technology and services? It is easy to let feelings and prejudices get in the way of facts.

Huawei has been under considerable scrutiny for the past year, as Western governments assess levels of comfort with the company supplying 5G network equipment. Huawei has provided Canadian service providers with advanced technologies and helped discipline pricing from other companies. For that reason, a number of Canadian service providers want to keep Huawei among their approved technology suppliers.

I had the opportunity to attend the Huawei Analyst Summit in Shenzhen last week. Huawei’s emergence on the telecom technology scene is a fascinating story, as is the growth of the Shenzhen region. Less than 40 years ago, the area was largely rural and like most of China, poverty stricken and there wasn’t a single phone line in the region. The area is now a booming metropolis, home to 12.5 million people, 40,000 of whom work on the Huawei headquarters campus. In just over 30 years, Huawei grew from a 6-person reseller of Mitel telecom gear, to become the world’s largest supplier of telecommunications equipment, with revenues exceeding US$100B.

At the Huawei Analyst Summit, participants were told one third of the world’s mobile traffic is carried on Huawei gear; the company supplies 400 LTE networks around the world, covering 140 national capitals. Huawei has contracts for more than 40 5G networks with 70,000 sites operational.

In Canada, Huawei has a significant presence, including more than 1100 employees and about $200M per year in R&D spending. The company is in the process of increasing its Canadian workforce with 200 additional people expected to join its Canadian research centres. Huawei has been encouraging companies and countries to take a closer look at its software development processes and Huawei has built cyber security transparency centres in a number of countries to facilitate such scrutiny; a transparency centre in Germany was opened just a month ago. The United States is no longer demanding that Huawei be banned from Germany; it had previously threatened to limit sharing of intelligence with Germany unless Huawei was excluded from the country’s 5G networks. CNET reports “Senior US officials are ‘highly satisfied’ with Germany’s regulations setting strict 5G security standards.”

Speaking last week at the Huawei Analyst Summit about cyber security concerns, Huawei’s rotating Chairman, Ken Hu warned, “If an issue is politicized, the discussion will be moved away from facts and onto feelings.” He is right. The issue is too important to let politics get in the way of good policy, to allow old prejudices to cloud a dispassionate assessment.

Canada needs to carefully explore the measures taken by Germany and other allies that can provide assurance to national (and international) intelligence and security agencies to confirm our networks are safeguarded.

Perhaps the next Huawei Cyber Security Transparency Centre should be located in Ottawa.

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