How the US attacked Huawei: Former CEO of DocuSign and Ariba turned diplomat Keith Krach tells his tale
- Reference: 1606366693
- News link: https://www.theregister.co.uk/2020/11/26/keith_krach_undersecretary_of_state_usa_vs_huawei/
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So says Keith Krach, the US Under Secretary of State for Economic Growth, Energy, and the Environment, who late last week spoke on a webinar hosted by the American Chamber of Commerce in Australia. The Register has obtained and viewed a video recording of the event.
Krach is a former CEO of DocuSign and SAP Ariba, and was appointed in 2019 after approaching vice president Mike Pence to share his concerns about the former company's prospects in China. He was appointed in 2019 and Secretary of State Mike Pompeo charged him with combating China's economic aggression.
"Divide and conquer" was his strategy from day one and Huawei was a particular target because it had become the de facto leader in 5G, which the US had identified as a technology that would touch on many aspects of industry and national security.
Huawei fell into our trap when they started bad-mouthing our brand
Krach's plan was to play on fear of China and trust in the US.
"It looked like Huawei was unstoppable and would run Europe's networks," he said. "We started with a strategy of addressing a long-term threat to security and other threats posed by the Chinese Communist party, rooted in trust principles.
"Trust is the Chinese Communist Party's biggest weak spot. People do not trust China."
Tech companies have scars that taught them that lesson, he said, recalling a dinner he convened in Silicon Valley attended by more than two dozen major technology CEOs from Google and other comparable companies.
"We started by asking for China horror stories and you would not believe what you heard," he said.
Even China's big trading partners don't trust it, he said, recalling how those he encountered in meetings would make it plain – often non-verbally – that they did not feel their relationship with the Middle Kingdom was comfortable.
But many had become comfortable with Huawei.
Shocking revelations from Huawei-commissioned report: Huawei is good for the UK's economy so don't ban them [1]READ MORE
"Everyone wants to go with the leader and Huawei was the leader," he said. "Leadership means momentum and Huawei had momentum."
But the US believes Huawei is an arm of China's government, enables its pervasive surveillance regime, and is also a critical part of its intelligence apparatus.
Krach's evidence for that is Chinese laws that require all companies and individuals to provide authorities with intelligence or data on request as a reason Huawei cannot be trusted. He also found Huawei's very keen 5G pricing suspicious. "Why do they give it to you or charge not much?" he asked. "So they can get your data."
And he asserted that the data can flow without backdoors or other hacks. Instead, he suggested that China can rely on regular code updates that attract little scrutiny but which are used to conduct intelligence operations.
The US set about disrupting Huawei with its export bans and the [2]Clean Networks plan, which requires local networks to be cleansed of anything Chinese in order to make them easier to trust. And once a nation or telco is trusted, access to US technology and markets becomes easier.
Krach travelled extensively and found allies at NATO and the European Commission who understood the concept and adopted it. The under secretary said European regulations that make telco directors personally liable for network equipment choices that go pear-shaped was one result of his efforts.
"We on-shored the most important 5G silicon company TSMC," he said. "We know people on the board and in two weeks they announced a plant in Arizona."
In Krach's telling of the tale, US evangelism of the Clean Networks plan was noticed by Huawei and eventually drew a critical response.
"Huawei fell into our trap when they started bad-mouthing our brand," he said, advancing a theory that the criticism legitimised Clean Networks because the US is trusted and Huawei is not. He said the Clean Networks brand will now persist because of Huawei's attacks.
Krach claimed the effect of the campaign is observable in the fact that the number of public commitments to build 5G networks based on Huawei technology has fallen from 91 to 12.
Uncle Sam passes comms act that sets aside $750m for the development of OpenRAN [3]READ MORE
"I think Huawei might have ceased to exist as we know it," he said, citing its sale of the Honor handset business and the fact that alternative 5G players welcome OpenRAN platforms because they offer opportunities for innovation rather than buying a complete stack from one vendor.
The under secretary doesn't think the job is done, partly because China has realised that whoever controls standards controls the market.
"'Category kings' win and one of the ways to get there is to facilitate the standards yourself. We did that at DocuSign and Ariba."
China's strong participation in standards processes means "the Chinese Communist Party has taken our strength and used it against us," he said. "Now we have to go above the standards with global alliances."
And part of that work will be continued criticism of China's national security law. "You just keep poking it and poking it and poking it until they change," he said.
Curiously, Krach's interlocutor on the webinar was Shekar Ayyar, executive vice president and general manager of VMware's telco and edge cloud business unit. VMware is a Clean Networks participant. ®
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[1] https://www.theregister.com/2020/11/18/huawei_report_uk_economy/
[2] https://www.theregister.com/2020/08/06/usa_clean_network_plan/
[3] https://www.theregister.com/2020/11/19/us_house_approves_usa_telecommunications_act/
[4] https://whitepapers.theregister.com/
Re: Which People ?
There's all these "acts" that require US companies to exfiltrate data outside of the US jurisdiction basically against the laws of the country the data sits in.
Cisco backdoor anybody?
The snooping uncovered by Snowden?
Privacy shield and safe harbour falling apart?
That's why governments don't trust the cloudy office stuff, for example (I know from sources that there is a lot of concern about the first point).
Re: Which People ?
That's why governments don't trust the cloudy office stuff, for example (I know from sources that there is a lot of concern about the first point).
As soon as your data are outside of the EU, they are not safe.
Problem is, we don't even know if data stored in EU datacenters are not backed up/ extracted to other locations. What secret agreements exist between GAFA and the NSA or one of the other 16 US 'intelligence' agencies? Snowden showed us the US cannot be trusted.
2 months to go
Do NOT trust Huawei.
Huawei agreed to open the code to their customers, you're right to be suspicious and demand auditing of Huawei's kit and code. This is how it should be. You should demand Cisco's code too. Why build critical infrastructure on blind trust!? WHen you build a bridge, you get a structural engineer to check the engineers calculations, you *verify*, you do not trust.
US voting machines run on bespoke software that cannot be viewed or verified. Even the owners of the companies are kept secret. You're supposed to trust the voting machine, but the voting machine company doesn't trust you.
https://www.techdirt.com/articles/20190706/17082642527/voting-machine-makers-claim-names-entities-that-own-them-are-trade-secrets.shtml
You need to verify those machines and the companies behind them. Trumps accusation of fraud in those companies is projection. Trump always projects. If he's saying theirs fraud for Democrats there, then there's fraud for Trump there. Projection.
Voting machines AGAIN voted heavily for Republican candidates! The verifiable mail-in ballots is strongly Democrat, and those ballots can be checked with a hand count, and matched. Real people making real verifiable votes. Yet the voting machine that cannot be verified (or only verified against a paper trail that could be a fresh printout), vote for Republican.
Machines vote Republican, but people vote Democrat.
Republicans screwed up this time, they needed Lindsey Graham and his buddies to call around to try to get votes discarded. Sloppy. They didn't rig the election enough. A few less mail-in votes and they would have had a plausible win.
https://edition.cnn.com/2020/11/23/politics/florida-dark-money-mystery-invs/index.html
Also see those spoiler candidates in Florida? The 3 left wing spoiler candidates actually run and funded by Republicans? Fake democrats to split the Democrat vote? Follow the money and it goes from printing company to son-of-owner to 2xRepublican PACs to a Delaware holding company.
So much effort to hide the money, but far less effort to hide that the Republicans running the spoiler candidate! Right away that tells you the money conceals a super-big crime, far bigger than Republicans running fake left-wing candidates. A real genuine crime that needed to be hidden by layers of PACs and front corps.
Russia used Delaware front companies heavily in 2016, so I bet that money was Russian. With Russia running its own political spoiler candidates to help their chosen Republican candidates.
So you use all this US kit because its a country of laws, and democracy? Rethink this. Get the code, require auditing, check it yourselves.
If Americans cannot trust Republicans to hold an election, how can you trust anything coming out of the USA!
"People trust the USA ?"
More than China? Yes.
It's not a blind trust, of course.
I see, so, back doors are a good thing now? wtf?!
They always have been, as long as you have the key.
"advancing a theory that the criticism legitimized Clean Networks because the USA is trusted and Huawei is not."
I trust both of them to spy. Does that count?
Reads like a Hollywood Movie
Slightly aged good guy says enough is enough and takes on young,fit and nasty bad guy and wins. Standard script "based on a true story".
Re: Reads like a Hollywood Movie
And like any Hollywood script, it's just bollocks for public consumption.
Why 5G ?
What's the point of 5G anyway ? A good 4G provides the necessary bandwidth for anything, including streaming films and videoconferencing, what is it that 5G will do that 4G doesn't ? This sounds like a new plot to sell more stuff that people don't need.
Re: Why 5G ?
I must admit that 5G seems like bandwidth for bandwidth's sake to me too.
The mantra is "5 is bigger than 4! When do we need it? Now! Whatever it is...!"
Give me a good mobile signal of *any type* such that, wherever the caller and receiver are in the UK, the most basic voice signal did not drop out, squeak or warble and consigns the phrase "you're breaking up" to the bin of communication history and I'd be more than happy ...
5 makes more hype-money than 4. Good 2 across the entire country would be expensive ... So all things considered, and ignoring anyone who has yet to see a 4G signal, we obviously need 5 investment as fast as possible ...
Re: Why 5G ?
"What's the point of 5G anyway ?"
I can't speak for anywhere outside of the UK, but I suspect there are probably some real world cost/logistics issues involved.
1. It will probably be cheaper for telcos to roll out 5G in the UK instead of upgrading the remaining areas of the old copper network to full fat fibre, even if it's just [1]FTTC/N as opposed to FTTP/H/B.
2. It will probably be practically easier than upgrading the old network.
Consider the financial/practical upheaval of digging up vast swathes of road/pavement areas in heavily populated locations (those who don't already have the fibre laid out), getting fibre roll out to those locations that aren't major city centres where organisations like BT/Openreach consider the fibre roll out as cost prohibitive (i.e. investment on return).
From a personal perspective; there is no real fibre option where I live even though the likes of Virgin are continuously bombarding the house with junk mail offering the next big thing in fibre internet. When enquired upon, the service isn't actually available in my area ("but it's coming soon!"), so I have to settle for the 10/4 connection I have. It's the fastest available.
Yes, that's 10 Mbits down and 4 Mbits up.
(Disclaimer: I am not a telco/network engineer, so it may be I'm completely wrong; the above is pure speculation on my part; YMMV etc, etc)
[1] https://en.wikipedia.org/wiki/Fiber_to_the_x
Re: Why 5G ?
And where is this superfast wireless data to go if you don't upgrade to fiber? Without sufficient backhaul 5g is useless.
Re: Why 5G ?
You are correct in bringing in the economics of providing infrastructure. It is quantified by the number of users or economic benefit.
Every time NIMBYs and "but what about MY not-spot" people come here, and the same commentary comes - "I just want 2G for a phone call". When 3G was introduced, when 4G was introduced and will be there when 8G comes.
The very, very vast majority of phone users will not downgrade from 4G to gprs. Even if they said they were fine with 2G.
The telco decision goes - spend say £200 million to enable 2G for these 10-0 people, or continue with 4G and increase per user bandwidth by 1 MBps for 50,000 people, or enable 5G and increase per user bandwidth by say 5 MBps for 200,000 people.
Most of these arguments about the next G being irrelevant "for my non-spot" is really about diverting the upgrade for 200,000 people to the 100 people. It is arguing to hold back 200,000 people for the sake of 100.
There are placeholder numbers, but the point is the scale of economics that the technology brings.
And there will ALWAYS be a not spot. The economics of it just simply does not add up no matter the technology. It simply has to be subsidized and has nothing to do with the G.
Indeed, cell topology upgrades that a new revision can support could help make non spots fewer, and reduce the size of subsidies required, or make the economics of some non-spots sensible..
Given the role of cellular connectivity to the economy, there is also an argument to be made that supporting 200,000 upgrades can fill those subsidy coffers better for those 100.
Clean Networks?
The lesson of 'Clean Networks' should not be "don't trust China", but in fact, "don't trust anybody , in case they pull a China on you", and that definitely includes the USA.
Essentially, it it a strong argument for FLOSS hardware and software in critical infrastructure, so that you can audit it and assure (by the number of mutually distrusting eyes looking at it) that it is as unknown, uncontrolled backdoor free as possible, according to the competence of the people doing the auditing.
National security services will always want to put their own monitoring in for data crossing national borders, and law enforcement will want the ability to 'tap' communications (with a valid warrant, naturally), so as end end-user of such infrastructure, you will not be free of local (legal) government backdoors/monitoring: but the point is being able to be reasonably sure there are no illegal, hidden backdoors. From a National Security point of view, it should be a no-brainer, especially as history shows that trusting the current 'Great Power' is a poor idea in the long run.
Arguing for 'Clean Networks', is in fact arguing for auditable hardware and software where you can make changes without legal problems, like copyright, patent, and trademark issues. Do you, as a country, want your communications to go through DRMed binary-blob software on hardware manufactured without oversight in another country? Do you feel lucky?
NN
It's not about clean or secure...
And it never has been.
It's all about US envy of a Chinese success story.
Huawei pumps billions into R&D. Western companies have been driven by bean counters obsessed with the bottom line. And now they find that they are lagging behind in a fast moving technology.
So what do you do? Invest the billions required to catch up? Or play on "red under the bed" fears to undermine trust in the competition.
So now we have a clean network... pretty soon they'll start playing up the "terrorists and paedo" fears to outlaw strong crypto. Which ironically would protect my data from Chinese snooping (alleged).
Re: It's not about clean or secure...
>> Huawei pumps billions into R&D
Well, where is it coming from? Their management are also millionaires and billionaires like western companies, chinese tech labour is cheaper but not cheap as say India, yet their products are substantially cheaper.
I'll agree when Huawei's accounts are an open book and Chinese banking and reporting standards meet those elsewhere..
If labour laws in the west matched those in China, there would be more bang for the R&D buck that Huawei enjoys. So, this isn't just about beancounters, even if they matched Huawei spend.
I'm not saying the US is innocent, but that is not a license to whitewash Huawei and the CCP's very aggressionist foreign policy, and firewalled information flow.
For the sake of argument, for a moment, let's suppose that Huawei is indeed an apparatus of the CCP. What evidence would you accept?
Boy is he in for a shock
‘ Krach’s evidence for that is Chinese laws that require all companies and individuals to provide authorities with intelligence or data on request as a reason Huawei cannot be trusted.’
Wait until Krach learns about RIPA 2000 and IPA 2016 in the UK.
Re: Boy is he in for a shock
Krach surely knows and doesn't care about those, because we're part of the 5 eyes "good guys" (insert preferred measure of "good"), and we're toeing the line on Clean Networks.
Likely every country has similar laws for intelligence service access. Just that for some countries the vast majority of their citizens are unaware of them, or too stupid to even consider it a possiblity. Krach played on that and, for the moment, it's working.
Pot and Kettle
... USA believes Huawei is an arm of China’s government, enables its pervasive surveillance regime and is also a critical part of its intelligence apparatus.
Hmm ...
Is the kettle calling the pot black?
O.
Meanwhile, in the rest of the world...
While Huawei may or may not be Pure Evil and bound on world domination by using all our precious private data, let's not forget the other baddies out there. The Mossad, for example, has fingers in many pies and backdoors in many data centres through "confidential" agreements with various governments who should know better. While Israel is the only one I have first hand information about, I'm sure there are more.
The reality of the situation is that the West seems to need an enemy. It used to be the Russians, but now the cold was is essentially over and they have ceased to be our favourite threat, China has been promote to fill that role. Once they turn out not to live up to our expectations of being horrible, something else will be chosen to fill the niche. A conglomerate of all Islamic countries, perhaps, or maybe the French, who knows...
Which People ?
People trust the USA ?