x
Packet inspection/traffic management

China Censorship Debate Circles Cisco

If a telecom equipment company aides law enforcement officials in China, is that the same as helping the cops catch crooks in the U.S.?

That's the stance Cisco Systems Inc. (Nasdaq: CSCO) is sticking to as it continues to catch flack from some who say the company is encouraging Internet censorship when it sells some of its products to Chinese authorities –- and then trains those customers how to conduct Internet surveillance.

That Cisco is tied to a China controversy isn't surprising, given how the company's sales, profile, and visibility in the country have all been raised considerably over the past year. (See Cisco Places Gaming Bet, Cisco CRS-1 Wins in China, Shanghai Telecom Uses CRS-1, and Cisco Turns to ZTE in China.) Also, the idea of Internet censorship is fresh on everyone's mind, given the recent debate in this country about service provider QOS fees. (See QOS Fees Could Change Everything .)

But is Cisco doing anything wrong? That may be a debate for the ages, but analysts say it doesn't look like it will harm Cisco in the near term. "As long as orders are up and the company's moving forward, I don't think anyone cares," says one financial analyst.

Still, Cisco's critics are stepping up the pressure, as they are on all big Internet companies that have business ties to China.

In her testimony before the U.S. House's subcommittee on International Relations a week ago, Lucie Morillon, the Washington representative of Reporters Without Borders, took aim at Cisco, Google (Nasdaq: GOOG), Yahoo Inc. (Nasdaq: YHOO), and Microsoft Corp. (Nasdaq: MSFT) as companies that are helping the Chinese government shut down one of its "only open windows to the world" -– the Internet.

"Cisco Systems has marketed equipment specifically designed to make it easier for the Chinese police to carry out surveillance of electronic communications," Morillon said. "Cisco is also suspected of giving Chinese engineers training in how to use its products to censor the Internet."

But Cisco says it can't be held responsible for what China does with the equipment it buys. Especially because Cisco isn't selling China anything different than it sells to any other country.

"Cisco's networking products are designed to improve communications and productivity of common law enforcement activities that take place in China, as they do in the United States," says a Cisco spokeswoman in an email to Light Reading. "This equipment that we sell in China is the same equipment that we sell globally."

In his testimony before the House subcommittee, Cisco's senior VP and general counsel Mark Chandler said that China isn't the only country using "off the shelf" networking gear for political purposes. "Some Middle Eastern countries block sites critical of their leadership. And judicial action has been taken in France due to the failure of an operator to block French users’ access to some types of information," Chandler said.

That appears to be quite a different approach than the one taken by Google, which altered its search engine to fit the Chinese market. (See Google Backlash Builds.) Elliot Schrage, VP of global communications and public affairs, told the House subcommittee last week that Google's Chinese version allows users access to "all but a handful of politically sensitive subjects."

As Cisco's Chandler reiterated in his testimony, his company "has not and does not design products to accommodate political censorship. The tools built into our products that enable site filtering are the same the world over, whether sold to governments, companies, or network operators."

On Wall Street, that message is good enough for now. Cisco's shares were down $0.28 (1.41%) to $19.58 in trading on Tuesday, but that's still 5 percent above where the stock was on Feb. 1.

— Phil Harvey, News Editor, Light Reading

Page 1 / 2   >   >>
jes 12/5/2012 | 4:05:25 AM
re: China Censorship Debate Circles Cisco I think Cisco has made it clear that its not altering a product specifically for China to make this happen. And Cisco is helping China to tackle internet crime, as it does in US also....
So its not new thing at all..... I feel this is NOT a valid point made by congress, at least in case of Cisco.
jepovic 12/5/2012 | 4:05:24 AM
re: China Censorship Debate Circles Cisco The more interesting question is of course: What is Cisco and Google doing for the US government?

Am I the only one smelling a new Hoover era, based on telecommunications?
DCITDave 12/5/2012 | 4:05:23 AM
re: China Censorship Debate Circles Cisco re: " I feel this is NOT a valid point made by congress, at least in case of Cisco."

Do you feel there was a particular reason they were picked to testify? Why not choose Alcatel or Lucent?

ph
DCITDave 12/5/2012 | 4:05:22 AM
re: China Censorship Debate Circles Cisco re: "Am I the only one smelling a new Hoover era, based on telecommunications?"

Not sure what you're smelling. Are you implying that if Cisco did more government business it wouldn't be in the hot seat regarding censorship in China?
tsreyb 12/5/2012 | 4:05:21 AM
re: China Censorship Debate Circles Cisco
> Am I the only one smelling a new
> Hoover era, based on telecommunications?

Shh! You never know who is monitoring this board (or your PC, your Internet connection, your web searches, etc.)

Have a nice day!
DCITDave 12/5/2012 | 4:05:21 AM
re: China Censorship Debate Circles Cisco re: "Shh! You never know who is monitoring this board (or your PC, your Internet connection, your web searches, etc.)"

Well, Juniper for one...
russ4br 12/5/2012 | 4:05:21 AM
re: China Censorship Debate Circles Cisco Are you implying that if Cisco did more government business it wouldn't be in the hot seat regarding censorship in China?

I think the requirement is more in the line of never making available crypto technology that the (US) goverment can't decode. Thus, if national security demands it, it'll be possible to snoop in your "secure VPN connection" ...
Zoloft 12/5/2012 | 4:05:21 AM
re: China Censorship Debate Circles Cisco Apparently, huge capitalistic enterprises like Google and Cisco have no qualms about getting in bed with Chinese Dictators? This is a snake with two heads and it will most definitely bite, as Google has expereinced recently, with more to come no doubt.

When will these "useful idiots" ever learn?
Lite Rock 12/5/2012 | 4:05:21 AM
re: China Censorship Debate Circles Cisco I think the significance of Cisco testifying is their success at marketing and selling value added engineering and support services. These services make available the best practices and most advanced use and application of their product. Cisco has taken the practice of selling expert services to new heights and China is the beneficiary. Cisco will do anything if you pay for it.

The old Telco companies would just throw their services at no charge as a value add and just build it into the equipment price. This put the burden of being the expert on the shoulders of the customer. In the majority of cases the customers would be much more knowledgeable than the equipment manufacturers in the application, use, and customization of their products.

This model is changing primarily because of Cisco.

The Government has in the past been able to identify and restrict certain equipment, technology and intellectual information in order to place limits on export and promulgation of certain technology and information.

The government is either not able to adapt fast enough to know what to limit or they are still on top of things and just being more liberal with what they allow.

This is a systemic government issue that would not have improved even if the inventor of the internet had gotten into office. :-)
DCITDave 12/5/2012 | 4:05:20 AM
re: China Censorship Debate Circles Cisco re: "Apparently, huge capitalistic enterprises like Google and Cisco have no qualms about getting in bed with Chinese Dictators?"

I don't know. It appears that Cisco's approach is different than Google's. Google is crafting a custom product to avoid offending the government.
Which one's harder to defend?
Page 1 / 2   >   >>
HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE