We Need Clarity on ‘National Security’ Rules for Telecommunications

The story of Blackberry has gripped many technology watchers, watchers who are bearing witness to the trials and tributations of the company as it struggles to compete in the increasingly populated smartphone market. To some, it seemed that one way ‘out’ for Blackberry was for the company to be purchased by another firm looking to aggressively enter this market. Based on recent reporting by the Globe and Mail, however, it looks like any hopes that Blackberry might be purchased could be scuttled for ‘national security’ reasons.

Specifically, Steven Chase and Boyd Erman write that,

Ottawa made it clear in high-level discussions with BlackBerry that it would not approve a Chinese company buying a company deeply tied into Canada’s telecom infrastructure, sources said. The government made its position known over the last one to two months. Because Ottawa made it clear such a transaction would not fly, it never formally received a proposal from BlackBerry that envisioned Lenovo acquiring a stake, sources said.

on Monday the Canadian official took pains to emphasize that concerns about BlackBerry are not part of a trend to shut out Chinese investment. “This is a company that has built its reputation and built its success on system security and its infrastructure. That’s one of the reasons businesses use BlackBerries. … The security is robust and we’d obviously have an interest in making sure we didn’t do anything or allow anything that would compromise Last fall, citing a rarely used national-security protocol, Ottawa has sent a signal to Chinese telecom equipment giant Huawei Technologies that it would block the firm from bidding to build the Canadian government’s latest telecommunications and e-mail network. Huawei, founded by a former People’s Liberation Army member, has on numerous occasions found itself having to reject claims its equipment could be used to enable spying.

In October. 2012, a senior spokesman for Prime Minister Stephen Harper publicly hinted Huawei would be left out the cold. “I’ll leave it to you if you think that Huawei should be a part of [the] Canadian government security system,” Mr. MacDougall said.

I’m particularly mindful of the possible security issues that may be linked to letting foreign-located businesses playing significant roles in Canadian telecommunications networks. But, at the same time, the present Canadian government seems to be applying ‘national security considerations’ in a manner that prevents market analysts and watchers from clearly assessing when such considerations might be applied.

Without clear criteria, what are the conditions under which a non-Canadian company could purchase Blackberry? Could a well-financed American company buy it, based on what we’ve learned about NSA surveillance? Could a company that was known to comply with foreign governments’ lawful interception requirements buy Blackberry, given that such requirements could have a global reach? Could Blackberry be purchased by companies that operate in countries that, if their governments had access to Blackberry communications, could gain an edge in international diplomatic engagements with Canada or its closest international partners?

I don’t dispute that national security may sometimes demand terminating business deals that would violate the national interest. However, given that incredibly large investments are being killed by the federal government of Canada it is imperative that the government make clear what ‘national security’ interests are at play, and the security models that motivate terminating such deals. To date, neither the interests nor models are particularly clear. As a result, analysts are forced to read the outcome of federal decisions without the benefit of understanding the full rationale of what went into them in the first place. The result has been to make it incredibly uncertain whether foreign businesses will be legally permitted to engage in market operations with Canadian companies.

Canadians are all to aware that the current federal government has failed on its promise to provide a digital strategy for the Canadian marketplace. In the absence of such a strategy, perhaps the federal government could at least provide its rules for determining when a business proposal runs counter to national security?