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How US snoops on fibre-optic data flows

Craig Timberg and Ellen Nakashima (via The Washington Post/ SMH) | July 8, 2013
This "Network Security Agreement," signed in September 2003 by Global Crossing, became a model for other deals over the past decade as foreign investors increasingly acquired pieces of the world's telecommunications infrastructure.

The Global Crossing deal created particular concerns. The company had laid an extensive network of undersea cables in the world, but it went bankrupt in 2002 after struggling to handle more than $US12 billion in debt.

Two companies, one from Singapore and a second from Hong Kong, struck a deal to buy a majority stake in Global Crossing, but US government lawyers immediately objected as part of routine review of foreign investment into critical US infrastructure.

President Gerald Ford in 1975 had created an interagency group - the Committee on Foreign Investment in the United States, or CFIUS - to review deals that might harm US national security.

Team Telecom grew out of that review process. Those executive branch powers were expanded several times over the decades and became even more urgent after the September 11 attacks, when the Defense Department became an important player in discussions with telecommunications companies.

The Hong Kong company soon withdrew from the Global Crossing deal, under pressure from Team Telecom, which was worried that the Chinese government might gain access to US surveillance requests and infrastructure, according to people familiar with the negotiations.

Singapore Technologies Telemedia eventually agreed to a slate of concessions, including allowing half of the board of directors of a new subsidiary managing the undersea cable network to consist of American citizens with security clearances.

They would oversee a head of network operations, a head of global security, a general counsel and a human resources officer - all of whom also would be US citizens with security clearances. The FBI and the departments of Defense, Justice or Homeland Security had the power to object to any appointments to those jobs or to the directors who had to be US citizens.

US law already required that telecommunications companies doing business in the United States comply with surveillance requests, both domestic and international. But the security agreement established the systems to ensure that compliance and to make sure foreign governments would not gain visibility into the working of American telecommunications systems - or surveillance systems, said Andrew D. Lipman, a telecommunications lawyer who has represented Global Crossing and other firms in negotiating such deals.

"These Network Security Agreements flesh out the details," he said.

Lipman, a partner with Bingham McCutchen, based in Washington, said the talks with Team Telecom typically involve little give and take. "It's like negotiating with the Motor Vehicle Department."

Singapore Technologies Telemedia sold Global Crossing in 2011 to Level 3 Communications, a company based in Colorado. But the Singaporean company maintained a minority ownership stake, helping trigger a new round of review by Team Telecom and a new Network Security Agreement that added several new conditions.

A spokesman for Level 3 Communications declined to comment for this story.

 

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