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Australian Gov't Bans Huawei From National Network Bids
An anonymous reader writes "It looks like paranoia regarding Chinese cyber-espionage is riding sky-high within the Australian Government. It was confirmed today that the country's Attorney-General's Department had banned Chinese networking vendor Huawei (the number two telco networking equipment vendor globally) from bidding for work supplying equipment to the government's $50 billion National Broadband Network universal fibre project. The unprecedented move comes despite Huawei offering to share its source code with security officials, and despite Huawei not being accused of breaking any laws in Australia. Questions over the legality of the Government's move are already being raised."
Cisco alleged Huawei stole their tech, but had to drop the suit after the chinese gov't made it uncomfortable for Cisco.
http://www.theregister.co.uk/2003/01/24/cisco_sues_huawei_over_ip/
Having a copy of the source provides only minimal protection. See for example the Underhanded C Code Contest.
It would be an almost trivial exercise to introduce a vulnerability into a code base that wouldn't be picked up easily by either human or mechanical inspection. Even if such a vulnerability was detected, the vendor could simply claim that it was a coding error, fix it, and get away with it unpunished. By adding a few dozen such vulnerabilities, the vendor could play this game for years without anyone ever being able to prove wrongdoing.
There's no hope of isolating the equipment or software from the Internet either, because the use-case here is a National Broadband Network, the whole point of which is to create a new public Internet backbone.