My conversation with Cisco

Yesterday I got a phone call from Terry Alberstein, Director of Corporate Affairs, Cisco Systems - Asia Pacific.  He wanted to clarify a number of things in response to my recent blog posts. We had a long conversation, some of which was "on background" - which means I agreed not to quote him directly, and some of which he agreed after the fact I could put "on the record."  By the end of our discussion, all of his personal perspectives stayed off the record (which are less relevant in the greater scheme of things anyway), while everything he told me about Cisco's policies and activities ended up on the record.   So here's what I learned:

• Alberstein confirmed the authenticity of the Cisco pamphlets promoting police surveillance equipment to the Chinese Public Security Bureau  acquired by businessman and author Ethan Gutmann from a Chinese trade show.
• Cisco confirms that it does indeed sell networking and telecommunications equipment directly to Public Security and other law enforcement offices all over China. 
• Alberstein said that Cisco sells to police around the world, and it's not illegal for Cisco to do business with the Chinese police, because the equipment sold is not actually prohibited under the Foreign Relations Authorization Act.   (Indeed, the Act only prohibits equipment like stun guns, handcuffs and helmets, saying nothing about high-tech communications or networking equipment.)
• He reiterated that Cisco is doing nothing against U.S. law. Nor does Cisco believe it's doing anything wrong. Quote: "It's not against the law to sell networking equipment to policing agencies in the PRC." [People's Republic of China]
• He emphasized that Cisco does not tailor routers for the Chinese market and does not customize them for purposes of political censorship. What the purchaser does with them is their business. Quote: "The products that Cisco sells in China are the same products we sell in the U.S.  We do not custom-tailor any product for any export market."
• ...but yes, they do provide service and training to their customers.

Following up on our conversation Alberstein emailed me a statement with further clarification of what he would like to have on the record. I've attached it to the end of this post. Let me know what you think.

What do I think?

1. The fact that Cisco clearly has no qualms about doing business with the Chinese Public Security Bureau is odious. We should change the law to make it illegal for companies like Cisco to sell networking and telecommunications equipment to police agencies in countries like China where the practice of law enforcement includes things like beating up little old ladies who demonstrate peacefully for their religious rights in Tiananmen Square, routine torture of people jailed without due process, and ongoing crackdowns against political dissent of all kinds. 
2. Cisco insists that it does not directly assist with censorship or suppression of free speech in any way. Its routers are global-standard, out-of-the-box, one-size-fits-all.  OK. But I remain skeptical that the service and training which they provide to their customers (including the Chinese Public Security Bureau and other law enforcement organs) has never involved assistance of clients with configurations and functions that would include political censorship or invasive surveillance.  I never got a definitive answer that cleared up my skepticism on this point. My skepticism runs especially deep given that Cisco has no qualms about doing business with Chinese law enforcement, and that CEO John Chambers says in public speeches that Cisco aims to become a "Chinese company."  I know for a fact that Chinese companies work closely with Chinese law enforcement on whatever Chinese law enforcement wants. So if you're trying to behave like a Chinese company that's naturally what you will do. 
3. Cisco argues that if they don't do this business, their competitors will. And that will be bad for U.S.  jobs.  Well, as I've said before, at the end of the day either we believe that the ideals of "freedom" and "democracy" mean something, and are worth sacrificing short-term profit so that more people around the world have a chance of benefiting from them, or we don't. Cisco clearly doesn't. This is an insult to the thousands of Americans - public servants, men and women in uniform, journalists and others - who risk their lives daily in far-flung corners of the globe for the sake of these ideals. Such business behavior cheapens and sullies these sacrifices, making Americans look like total hypocrites in the eyes of people around the world. They contribute to the reasons why, as a journalist covering protests from Beijing to Seoul to Peshawar, Pakistan, I had to pretend I was Swedish in order to avoid bodily harm.
   

BELOW IS THE FULL TEXT OF AN EMAILED STATEMENT FROM CISCO SYSTEMS PUBLIC RELATIONS:

As one of the world’s leaders in Internet networking technology, Cisco Systems has played an important role in the growth of the Internet globally.  Cisco has also played an important role in the development of the Internet in China. Today the Internet in China has over 100 million users, one of the largest Internet populations in the world, and continues to grow rapidly.

The networking hardware and software products that Cisco sells in China are exactly the same as we sell in every market in the world. 

And it is our users, not Cisco, that determine the applications that they deploy.

Beyond basic Internet protocol (IP)-based data, voice and video connectivity, Cisco's products provide important network management functions, such as preventing unauthorized access to networks, helping to prevent and mitigate denial of service attacks, and protecting intellectual property.  Cisco technologies also address important security functions such as blocking viruses from infecting a network, preventing hackers from stealing credit card numbers, protecting access to confidential medical information, helping Internet service providers administer billing, and allowing public libraries and parents to block young children’s access to particular websites.

Cisco is not in violation of the Foreign Relations Authorization Act.  The act in question requires export licensing from the U.S. Department of Commerce for specifically designed policing equipment like shotguns, police helmets and handcuffs.  Networking products from Cisco and our competitors are not covered by this legislation. 

A full list of these items can be found at the Department of Commerce link below:  http://www.bxa.doc.gov/news/2003/ForeignPolicyReport/fprchap2_crimecontrol.html

Cisco Systems does not participate in the censorship of information by governments.  Moreover, Cisco complies with U.S. Government regulations, which prohibit sale of our products to certain destinations; or to users who misuse our products or resell them to prohibited users.

Cisco does sell networking equipment to law enforcement agencies around the world, including in China, in compliance with U.S. Department of Commerce regulations.  Our products offer benefits through the networking of computing devices that aid in the effectiveness and timeliness of law enforcement.  We also sell our products to many public sector organizations like universities, municipal governments, utilities, etc.

Additionally, the market for networking products in China is highly competitive - we have strong competition in that market from French, Japanese, Canadian, Korean and Chinese competitors.

With respect to Mr. Gutmann and Mr. Wu's allegations published on your site, we reject these claims completely as baseless.  We note that Mr. Gutmann has never called Cisco, either with respect to his original claims several years ago, or now, to seek any information or explanation on Cisco's products or services for his magazine articles or forthcoming book.  We believe that these claims stem from fundamental misunderstanding about what networking products do and what they are capable of.

With respect to service and training of our products, all Cisco customers globally have access to Cisco training and support.  We provide service and support, either directly by Cisco or, in many cases, through systems integration partners for our equipment. However, these services do not entail the day to day management of networks. Our service and post-sales support is designed to replace faulty or defective products, and to provide training for the proper operation and configuration of network hardware.

END OF EMAILED STATEMENT FROM CISCO SYSTEMS.

NOTE: I've been alerted to the fact that due to a typo, paragraph 7 omitted a "not" which was originally intended to be there. I've added it in as requested. - RM

Comments

[GreatSatan]

Clearly, there should be a law against this kind of corporate behavior.
The other question would be, what brands should one avoid buying, to avoid giving business to Cisco?

[Hungry Valley]

That's a very good question and one I'm trying to wrestle with as two organizations I consult for are nearing a network upgrade decision point. I'm looking for a good way to bring it up in planning meetings. It will matter to them. Personally, I am putting off my own much, much smaller upgrade once again. This time it is not on expense grounds.

[Daniel W. McAndrew]

I can't help but note certain parallels between the recent SCOTUS ruling on the Grokster case (mfg liabilities on their p2p networking devices, inducing copyright infringement) and this equipment [made in the USA] being sold to communist regime.

This isn't what our great country was meant for - to help in furthering the aims of regimes incompatible with our own.

Absolutely disgusting.

[Brian Kennedy]

A ban on Cisco selling such equipment to elements of the Chinese security apparatus would be all well and good. Its effects, however, would be negligible as the PSB et al would simply source through offshore companies via Singapore, Bangkok, Hong Kong or any number of other places. Hell, they could probably have a holding company source the gear in Taipei. You know, a high-tech twist on selling the rope with which you'll be hanged.
Rounding up consultancy providers likely wouldn't be much harder.
You are of course correct in your assessment of Chinese companies and their "cooperation" with the Chinese government, but I'd take it a step further and state that major Chinese companies are a de facto commecial arm of the Chinese government and will "cooperate closely" (i.e. do as they're told) with ANY Chinese government organ, particularly the military and security establishment.
So what's the solution?
Who knows. One can only hope a spirited, technologically saavy underground opposition will stay a step ahead of the totalitarian dullards.

[Jeremy Goldkorn]

I am very happy to have the Internet in China at all — I remember the days when it was a struggle to get hold of a copy of Time magazine in Beijing. Whereas in China today today, you have access to almost as much information online as anyone in America, although because of filtering, it is slightly more difficult to find out about certain topics that the Communist Party would rather no one talked about.

If Cisco is blamed for filtering the Chinese Internet, they should also be praised for being a part of building it in the first place.

As you know Rebecca, your website is blocked in China, so I have taken the liberty of reproducing your post in full on (with my comments as above) on my website - Danwei.org which is not blocked in China.

[Alfred Thompson]

I don't see any real difference between selling something to the Chinese police and any other agency of the Chinese government. That includes government controlled businesses. Any of them could easily transfer assets to the security agencies. As could private citizens and businesses. So should we prohibit all sales of networking gear to China? What else should not be allowed to be sold to China that is currently legal? It seems a bit simplistic to say "Police bad, other parts of the government good." I mean I am can see an arguement that says we (US companies) should not do business or some kinds of business with China. I just want to know where the line should be drawn.

[Thomas Dahlgren]

Apalling, but unsurprising. Cisco is engaged in business that is morally odious but potentially quite lucrative. Corporations do not have a conscience and it is unrealistic to expect them to limit their behavior in the absence of legal or financial consequences.

Of course this is not intended as an argument against the imposition of such consequences. It is absurd that we are expending so much to bring a degree of freedom and liberty to Southwest Asia but cannot even muster some simple legislation to protect the citizens of other nations. Even if we wish to avoid legislating morality, such laws would also be in our own national interests.

[Used to Rhyme with Disco]

I do have to wonder about Cisco's foot in the Chinese market, as it relates specifically to what looks pretty clearly like the Huawei theft of Cisco source code (perhaps by one of those H-1B visa holders working in San Jose.)

I wonder if that Huawei code, modified to do "dirty tricks," can be loaded on a Cisco router.

My money is on "yes."

But then, that begs the question, why would the Chinese buy Cisco gear if they can get the same from Huawei? I'd guess offhand it's because Cisco is doing all the bleeding-edge R&D work, financed by sales to China.

But that's all just a guess.

[Brendon Carr]

One Cisco brand which is probably very familiar to many bloggers is Linksys, pioneers of low-cost networking equipment like the very router I am using now. If you want to take it out on Cisco, don't buy Linksys.

Personally, I'm with Jeremy Goldkorn on this one. On the whole, Cisco's role in building Internet in China redounds to *more* freedom for the Chinese, not less.

[C. Owen Johnson]

I'm afraid Rebecca MacKinnon and some of the comment here are missing the real point entirely. The real point is that the Chinese are becoming increasingly dependant on US intrastructure. For decades, the PRC has made a lot of noise about become technologically self-sufficient, especially in IT, but their homegrown products never work as well or are as affordable as Western [especially US] equipment. They used to resist using western products in key areas [like the security services and the PLA] but practical considerations [and bribes] sometimes got the better of them. This shows that PRC security standards are still eroding; getting our IT equipment into the PRC security services is something of a coup.

So whatever profit Cisco makes on China [and it's not very much], the strategic implications of China's security organs depending on US IT equipment are huge. Far from being appalling, this should be applauded: owning your enemy's IT infrastructure is the single greatest advantage one can have these days.

[Davod]

More to the point. We need a list of similar companies who are not doing business with China. Then we can all put our money where are mouths (or keyboards) are. Make the abetters pay and help the righteous.

[mcj]

In your next conversation with Cisco (though I doubt that will be anytime soon), you might ask what other police services Cisco sells this type of equipment to. Since the company was willing to confirm the China example -- and since Cisco presumably isn't/shouldn't be embarrassed of its business dealings -- why don't they shed light on which other police organizations they consider customers?

Keep up the good work.

[Nomad]

I recently attended a session at Cisco's Executive Briefing Center in San Jose where they showcase their new technologies to Very Big Customers. I brought up this topic and our Cisco reps pretty much gave us the exact same response as presented in the article, which means that they are probably coordinating their talking point on this issue internally and the customer/public concern *is* on their radar, but their response is simply to manage perception.

Cisco very proudly pointed out that their biggest customer for these same technologies is the U.S. Government (which probably also covers state and local agencies), which should be hardly surprising.

Do a google search on "Lawful Intercept" or "CALEA" for some intersting information on what the U.S. Gov has mandated in the way of built-in means within communications infrastructure technology that allows the government to monitor voice and data communications.

[AlexandreJean]

"As one of the world’s leaders in Internet networking technology, Cisco Systems has played an important role in the growth of the Internet globally."

Cisco is now helping to diminish the freedom Internet once was.

[Travis]

I can't stand Cisco and hate the Chinese government even more, but this is silly. Computers (to include networking equipment) are amoral by their nature. They are idiotic, but infinitely patient and obedient tools--that's all. Is it "odious" that Cisco surely knows that part of their profits are based upon censorship? Sure, how can it not be? But they are hardly the only company on the earth profiting from doing business with the Chinese government.

The PSB needs computers and databases to make this all work. So why not start squawking about Dell, Hewlett Packard, Oracle, IBM, Sun Microsystems, etc. And that is only in the IT industry. What of General Electric, General Motors, Haliburton--all of which have done business with the Chinese government? Do we ban all business with China (something I would favor, actually)?

To single out Cisco is, with respect, rather shallow and shortsighted. The real criticism and pressure should be levied at G7 governments that go about beating their breasts and trumpeting the cause of human rights but quickly change the subject when it comes to one fifth of humanity. Cisco's products are barely even a detail in that context and, if serious about promoting Human Rights in China, we need to realize them as one of many remora fish picking up a few scraps left from odious foreign policy, not as an organization with any real power.

[Harry Wu]

I do agree that we should not condemn only Cisco for its business activities in China. However, what we are doing is not “singling out Cisco”, but rather singling out America’s policy toward China and toward doing business with China. The Cisco issue is a simple one, because American law forbids the sale of crime control equipment to the specific country of China. We know that Cisco has signed contracts directly with Chinese PSB authorities, and that these contracts have helped the PSB more effectively control crime in China. Therefore, the issue becomes one of whether Cisco’s actions in this respect are legal or illegal; in violation of the law or not in violation of the law.

Lucent Technologies also signed a contract with Chinese PSB authorities, and Boeing has recently come under fire for allegedly illegally selling technology to China. But we should examine these cases one by one. And we should not proclaim that, because there are numerous companies doing business with China in violation of human rights, we should not criticize one particular company for its actions. Guilt in large numbers does not make a single company any less guilty.

[Seb Lee]

Since Cisco isn't willing to give up Chinese business to uphold "freedom" and "democracy", I wonder whether there are enough companies in the "free world" which hold dear to "freedom" and "democracy" to bring Cisco to its knees by not buying from it. A boycott sounds childish but it might work in the absence of any legislation to ban such US firms from doing business with China.

[Gordon]

Rebecca,

If you're interested and you haven't heard already, the firewall ban in China has been extended to Blog-City blogs now.

I first noticed it this afternoon before I left for the gym around 3:00pm. At first I thought it was a technical glitche with Blog-City because they have been doing a lot of upgrading lately, but then I had the urge to try accessing it through a proxy browser and to my unpleasant surprise - it loaded just fine. Naturally that sent my red flags flying and I sent out emails to other bloggers in China who continued to confirm one after another that access had been denied. Asiapundit responded saying that he had ran a trace and results confirmed a block at the firewall level (CHINANET).

I'm not sure if this is only temporary, but I have contacted Blog-City and they have assured me they are actively working on a possible solution to this problem.

As with the Typepad blog, it makes absolutely no sense. Then again, maybe they read my recent post about Taiwan being a possession of the United States.

Best regards!

Gordon

P.S.

Senator Evan Bayh's office had contacted me in response to my letter to the editor that was published in my home town and a member of his legislative staff has asked to meet with me regarding this issue upon my repatriation next month. If you're interested, I will keep you informed with the details of our meeting.

[Ken Nellis]

What do I think?

Rebecca is a hypocrite. I am sure she, as most Americans, are currently purchasing and using products made by or supported by the Chinese government (which supports the Chinese Police), yet she and some others condemn Cisco for their legal business transactions.

Rebecca indicates that we should make it illegal to sell to countries where the practice of law enforcement includes things like beating up little old ladies who demonstrate peacefully for their religious rights and routine torture of people. If this were the case, some would say, we should first ban sales to the United States government (see recent US Government torture allegations and excessive force police complaints).

Before we dictate policy to others should we not first look at our own country and ensure the same type of activates that we accuse others of practicing are not currently and routinely practiced in the United States?

[CiscoHQ Cisco Forum and News]

Wow, this was very interesting