Chinese multinational ZTE will plead guilty and pay $430.5 million to the U.S. government for illegally shipping U.S.-origin wireless and wireline infrastructure hardware to customers in Iran for almost six years, obstruction of justice, and “making a material false statement,” DOJ announced. In total, ZTE will pay the government $892.4 million, under the impending guilty plea and settlement agreements reached with the Commerce Department's Bureau of Industry and Security (BIS) and Treasury's Office of Foreign Assets Control, DOJ said. BIS suspended another $300 million in penalties, which ZTE will pay if it breaches its settlement with the agency, DOJ said. ZTE lied to federal investigators and “deceived their own counsel and internal investigators” about the illegal acts, Attorney General Jeff Sessions said in a statement. An independent corporate compliance monitor will review and report on ZTE’s export compliance program over the next three years, during which the company will remain on corporate probation, according to DOJ’s announcement. “Criminal information” filed March 7 in federal court in the Northern District of Texas charged ZTE with one count of “knowingly and willfully” conspiring to violate the International Emergency Economic Powers Act, and one count each of obstructing justice and making a material false statement. ZTE then signed a plea agreement with the government, which the court must still approve, DOJ said. BIS four times extended the original June 30, 2016, deadline for a temporary general license for ZTE that maintains normal licensing requirements for exports, re-exports and in-country transfers to ZTE and ZTE Kangxun (see 1702230001), after announcing sanctions against the two entities and two affiliated firms on March 8, 2016 (see 1603070001). The current temporary general license expires March 29.
Congress must “tread carefully before jumping in head first to regulate IoT and other new online business models,” Senate Commerce Committee Chairman John Thune, R-S.D., warned Tuesday. He has counseled colleagues to that effect while recognizing the implications for IoT on the economy and in various other regards, he said, invoking the label for IoT as the internet’s “third wave” and describing how it fits into other committee initiatives involving broadband deployment and spectrum availability. He touted, as expected (see 1608010055) his commitment to getting his Mobile Now spectrum measure (S-2555) signed into law this year (see 1607010047).
Senate Commerce Committee Chairman John Thune, R-S.D., plans to deliver a keynote speech on tech policy Tuesday during the South Dakota Technology Showcase in Sioux Falls. “The opportunity to ensure that all South Dakotans have access to the technological benefits available in today’s economy is what motivates me to work hard to find ways to expand access and increase connectivity in rural South Dakota and across the country,” Thune said in a statement Thursday, anticipating “sharing some of my ideas at this year’s technology showcase and learning how lawmakers and stakeholders can work together to help make these and other ideas a reality.” The Thune news release said one of “Thune’s top priorities as chairman of the Commerce Committee has been to ensure rural South Dakota isn’t left behind when it comes to the technological advancements that have become such an essential part of everyday life in America,” citing the Mobile Now spectrum bill (S-2555), currently blocked by Democrats on the Senate floor. AT&T, SDN Communications and the South Dakota Chamber of Commerce & Industry are hosting the event.
"The path is now clear" for the U.S. to "help bring Cuban telecommunications into the [21st century]," said Jamie Barnett, a Venable cybersecurity and telecom lawyer, in an online memo, referring to a recent policy change of the Commerce Department's Bureau of Industry and Security (BIS). The bureau's policy change regarding Cuba -- from a "case-by-case" review of telecommunications license applications to a "general policy of approval" -- became effective in late January, and coincides with recently announced amendments to the Cuban Asset Control Regulations (CACR) made by the Treasury's Office of Foreign Assets Control (OFAC), Barnett said. OFAC's amendments to the CACR "further relax[ed] the restrictions on the economic activities in, and financing exports to, Cuba," he said. Barnett said OFAC took multiple, incremental steps in 2015 to open up U.S. telecom-based services in Cuba, and its most recent action in January continues that trend. "As both OFAC and BIS have made clear, the purpose of the new rules involving trade with Cuba is to engage the private sector in that country to the largest extent possible while supporting the Cuban government as little as practicable in keeping with this purpose," he said. "In the telecom field, the U.S. government appears to appreciate that major infrastructure projects will be required and that these can be accomplished only by working with the Cuban government." Although providers will need BIS licenses to "bring Cuba telecom into par with the U.S.," and U.S. companies will need to carefully negotiate the remaining OFAC sanctions, "U.S. policy is clearly to promote the modernization of Cuba's telecommunications sector."
Capital expenditures have continued steady among the major carriers, despite concerns that the February net neutrality order would mean investments in networks would crater. Most troubling for many ISP executives, the order reclassified broadband under Title II of the Communications Act. In a series of recent financial presentations, carrier executives said other factors, such as the state of buildout and the shift from wireline to wireless investments, are the primary considerations behind capex investments.
Additional cybersecurity personnel, research and help for small businesses are needed to address cybersecurity challenges, witnesses told Senate Commerce Committee Chairman John Thune, R-S.D., during a full committee field hearing Thursday at Dakota State University in Madison, South Dakota. "Federal agencies need help, especially when it comes to improving their own cybersecurity practices,” Thune said in his opening statement. Techniques used by state-sponsored hackers and criminal groups to attack the federal government are also being used to steal intellectual property from businesses and critical infrastructure, to disrupt and deny access to online services, and to steal identifies and personal information for fraudulent purposes, Thune said.
DALLAS -- Carriers and others in the wireless industry should embrace software's role in automating functions across networks and specifically software-defined networking, said an executive of SDN backer Verizon.
Verizon is working with a handful of the top telecom equipment firms on software defined networks, which SDN advocates have said can cut carrier costs by using hardware-controlled software. With Alcatel-Lucent, Cisco, Ericsson, Juniper Networks and Nokia Networks, the carrier said it's "transforming its network" through SDN, "laying the groundwork for new innovative services and applications." Centralized network control will lead to "network-wide service creation and near real-time service delivery," said Verizon in a news release Tuesday. It said Verizon and the vendors wrote a document with specifications and reference architecture. "Cloud technologies hold the promise for true innovation in our industry," said Nokia CEO Rajeev Suri. Cisco CEO John Chambers said his company and Verizon will work on making money from what his firm calls the Internet of Everything, which he has said could be worth a cumulative $19 trillion by 2020 (see report in the Jan. 9, 2014, issue).
President Barack Obama issued an executive order Wednesday authorizing the attorney general and secretaries of State and Treasury to impose sanctions on foreign-based individuals and entities that launch malicious cyberattacks against networks owned by the U.S. government or U.S. companies. Cyberattacks that could result in sanctions would need to significantly disrupt a network’s availability, affect the provision of a critical infrastructure sector company’s services or cause the theft of U.S. economic resources, assets or personal information, the executive order said.
FCC hires David Gossett, ex-Consumer Financial Protection Bureau, as Office of General Counsel acting deputy general counsel for litigation … National Institute of Standards and Technology names Kent Rochford, ex-Sharp Labs of America, to head NIST’s new initiative on spectrum called Communication Technology Laboratory in Boulder, Colo., the agency’s part of the Center for Advanced Communications joint effort with NTIA … Lachlan Murdoch returns to 21st Century Fox, where he is on the board, in expanded role as non-executive co-chairman, James Murdoch promoted to co-chief operating officer and Fox Networks Group Chairman and CEO Peter Rice extended employment agreement.