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June, 2018

Huawei's presence at Canadian universities comes under scrutiny

Original article: The Globe and Mail

Huawei's presence on Canadian university campuses is coming under scrutiny as Ottawa's top security officials question the wisdom of transferring Canadian intellectual property to the Chinese telecoms giant. Huawei has a vast network of relationships with Canadian universities aimed at boosting its prowess in 5G, the next-generation wireless technology.

Analysis:

Research by The Globe and Mail found that Huawei has deployed $50 million among 13 top Canadian universities in a bid to strengthen its 5G capabilities and accumulate related patents. In 40 cases, Canadian university professors have transferred full rights to their inventions to Huawei. 


During the 1992 US presidential election campaign, independent candidate Ross Perot expressed his opposition to the NAFTA free-trade deal by alleging it sucked up American jobs. Now some former Canadian government officials hear that "giant sucking sound" again; only this time, it's Canadian intellectual property that's being depleted. 


Tony Clement, a former industry minister told The Globe and Mail: “We’re a great country, we have great minds, but if you don’t protect that, you become just a feeding mechanism for other powers to suck us dry."


Insufficient government oversight is partially responsible. Even though Canadian researchers rely on the government for funding and their salaries, they have been giving away the store to Huawei, observers say. McGill University law professor Richard Gold told The Globe and Mail that universities “continue with the model of taking public monies to finance research and transfer intellectual property at pennies on the dollar to foreign firms." 


Meanwhile, for Huawei, cooperating with Canadian universities is "a good deal," to appropriate The Donald. Kelly Hsieh, an analyst at Taipei-based research firm TrendForce, told O2O Brand Protection that the universities provide Huawei with technical support; in exchange it helps fund 5G development, laying the foundation for patents. "If Huawei masters the key 5G technologies, it can make profits from licensing as the patent holder. This will also allow Huawei to lay a solid foundation for developing products based on 5G," she says. 


She points out that North America is a crucial market for Huawei, and Canada offers the easiest access to that market following the U.S.'s decision to sanction ZTE. Historically, Canada has been friendlier to the Chinese telecoms giant than the U.S. Indeed, no major U.S. telecoms operators support Huawei devices. In Canada, all of the major telecoms support Huawei handsets, including Virgin Mobile, Rogers Communications, Bell Canada, Telus, Fido, Koodo, and Vedeotron. 


What are the benefits for Canadian researchers - and Canada overall? Financial support provided by Huawei may help small and medium-sized companies and start-ups in Canada accelerate their deployment of 5G technology, Hsieh says. Further, "the cooperation can accelerate the commercialization of next-generation communication solutions, and even support telecom operators in Canada on related wireless products and services," she adds. 


Still, some in Canada's intelligence community worry about cybersecurity threats from Huawei. Ward Elcock, former director of the Canadian Security Intelligence Service, told CBC Radio in March that Huawei's close ties with Beijing made the company a serious cybersecurity risk. "It is hard for me to believe that a company such as Huawei...would not build traps, back doors into its technology on behalf of the Chinese government," he said. 


In a new report about Huawei, Washington, DC-based risk consultancy RWR Advisory expresses similar concerns. "It is widely believed that the Chinese government retains the ability and the authority to weaponize Huawei’s assets, access and market position at the time and place of its choosing," the report says. 


Chinese espionage against Canada would become harder to counter if Beijing could gain access to Canadian communications, he said. When Elcock's interviewer pointed out that Huawei has been doing business in Canada for years, Elcock responded by saying: "Letting them into the 5G infrastructure, it seems to me, would be a bridge too far."


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