Trump Reversal on ZTE, Supply Chain Vulnerabilities Dominate House Hearing

Lawmakers of both parties fretted over White House reversal on ZTE and discussed balancing supply chain security with avoiding protectionism, at a Wednesday House Communications Subcommittee hearing. Rep. Anna Eshoo, D-Calif., said the committee should send a formal letter to the White House detailing its concerns about ZTE. Rep. Adam Kinzinger, R-Ill., hopes President Donald Trump’s comments on loosening sanctions against the Chinese smartphone maker were misinterpreted or that the stance changes. “We can’t play footsie with these companies,” Eshoo said.

Trump “muddled his own foreign policy” with a tweet (see 1805140062), said Commerce Committee ranking member Frank Pallone, D-N.J. “This makes absolutely no sense,” Pallone said. “I am concerned about the national security implications” of the ZTE reversal, said subcommittee Vice Chairman Leonard Lance, R-N.J. Eshoo doesn’t know why Trump began advocating for a reversal on ZTE, and said she wasn’t trying to score political points, calling the issue “dangerous.” Republicans and Democrats have weighed in with concerns about supply chain security for years, Eshoo said. Chairman Marsha Blackburn, R-Tenn., didn’t accede to Eshoo’s request for a formal committee letter but said she looks forward to working “in a bipartisan manner” on the issue.

Solutions for eliminating vulnerabilities in the supply chain should be “prioritized” to take a “resource constrained environment” into consideration, said committee Chairman Greg Walden, R-Ore. The U.S. “can’t rely on protectionist policy,” he said. Witnesses agreed. It’s important the U.S. “doesn’t take a sweeping approach banning companies based on country of origin,” said Center for Strategic and International Studies Technology Policy Program Senior Fellow Samm Sacks. China responds to “pressure,” but the U.S. shouldn’t act unilaterally because that could invite retaliation, she said. China is increasingly trying to get involved with standards-making bodies to wield “soft power” over tech, said Johnson and Virginia Tech Hume Center for National Security and Technology Director Charles Clancy.

Pallone and other lawmakers asked how federal agencies can work together to address vulnerabilities in the supply chain. Such a process could be modeled on recent interagency efforts to combat botnets, said Wilkinson Barker attorney Clete Johnson, emphasizing that private sector involvement should be part of any such process. He proposed an ongoing process of information sharing between companies and federal agencies such as the Department of Homeland Security, Commerce and the FCC. For that to work, companies would have to be incentivized to share information and receive assurances -- a “reverse Miranda” -- that the information shared wouldn’t be used against them, Johnson said.

Efforts to assess vulnerabilities in the supply chain must be continuous, said Clancy. Efforts that focus on specific companies would be “perishable,” Clancy said. Though Eshoo complained there isn’t a comprehensive assessment of vulnerabilities in the supply chain, Johnson said the ongoing FCC national security NPRM (see 1804170038) is a first step.

Blackburn, Yvette Clarke, D-N.Y and others asked how supply chain security concerns and sanctions against foreign companies would affect smaller companies and consumers. Lawmakers questioned whether there were domestic manufacturers providing equipment at competitive prices with ZTE or Huawei, and Johnson said competitive equipment was available from “trusted suppliers.” It’s impossible to guarantee supply chain security for every device, so the focus should be on lowering risk by choosing safe sources, Clancy said. The committee should focus on “criticality,” he said, saying a vulnerability in a device that provides widespread connectivity -- like a router -- is more critical than vulnerability in an “edge device” such as a cellphone handset.

The federal government should act now to address security threats from Russian and Chinese companies, said Telecommunications Industry Association Senior Vice President-Government Affairs Cinnamon Rogers. TIA also supports the FCC national security NPRM on USF, Rogers said: “We are confident that these carriers will continue to benefit from a competitive marketplace for equipment that includes a number of trusted suppliers.”