House report urges Comcast to stop using Chinese supplier

Posted: October 12, 2012

A government report on a potential national security threat posed by Chinese telecommunications firms operating in the United States identified Comcast Corp. as a major customer of Huawei Technologies Inc.

Comcast is the nation's largest cable-TV and residential-Internet provider.

The 52-page report, released Monday by the House Intelligence Committee, urged U.S. telecom companies to find alternative suppliers to Huawei and a second Chinese firm, ZTE Inc.

"The investigation concludes that the risks associated with Huawei's and ZTE's provision of equipment to U.S. critical infrastructure could undermine core U.S. national security interests," the report said.

Comcast, which spends billions of dollars each year on network upgrades, confirmed Wednesday that Huawei was one of its suppliers but said that it was a small one. The cable-TV distributor and Internet operator did not say what equipment it purchases from Huawei.

The yearlong investigation - which Chinese officials call politically motivated - explored the potential ties between the telecommunications companies and the Chinese Communist Party.

In addition to a cyber-spying threat, the report said the telecommunications firms could receive economic assistance from the Chinese government. "The committee considers it possible that Huawei receives substantial support from the Chinese government such that Huawei can market at least some of its products in the United States below the costs of production," the report said.

Huawei did not provide the committee with a detailed response on its business dealings in the United States, the report said, but supplied a list of its major customers. Among them were Comcast, Cricket Communications, Clearwire, Hibernia Atlantic, Suddenlink Communications, and BendBroadband.

"We work with many vendors, including Huawei, whose role is limited. We work with multiple vendors to foster innovation and competition, and we regularly evaluate current and potential vendors," Comcast spokeswoman Jenni Moyer said. "Ensuring the security of our network and our customers' information has always been and continues to be our top priority."

Huawei is employee owned and has operations in more than 150 countries, with more than two-third of its annual revenue of $32.4 billion earned outside China, according to Reuters.

A Chinese commerce ministry spokesman, Shen Danyang, was quoted in the Wall Street Journal as saying that the House report violated "long-held free-market principles and would undermine the cooperation and development between the two countries."

Contact Bob Fernandez at 215-854-5897, or @bobfernandez1 on Twitter.

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