Kim Jong-un Arrives in Russia for Talks with Putin; U.K. Approves Huawei for Non-Core 5G Role
JULIA CHATTERLEY, HOST, QUEST MEANS BUSINESS: Hello, I'm Julia Chatterley, there's more QUEST MEANS BUSINESS in a moment. When the U.K. elects Huawei to play a part in its 5G network, we'll explain why that's making the U.S. nervous. And the unhappy "House of Mouse", Abigail Disney ramps up her fight for fairer pay at Disney. Before that though, the headlines at this hour. A new released video shows two men with backpacks walking through the Shangri-La Hotel in Sri Lanka moments before the deadly Easter bombings. India says it warned Sri Lanka three times before the attacks of a potential suicide bombing against churches and tourist spots. And Sri Lanka's city, Muslim community say warned officials about increasing extremism for the past three years. North Korean President Kim Jong-un has arrived in Vladivostok ahead of Thursday's scheduled summit with Russian President Vladimir Putin. President Kim says he expects to discuss bilateral relations and what he called the situation on the Korean Peninsula. British and Irish leaders were in Belfast earlier to mourn the death of a prominent Northern Irish journalist. Twenty-nine-year-old Lyra McKee was shot and killed while covering riots in Londonderry, also known as Derry last Thursday. The New IRA later apologized for what it calls an accident. A spokesman for the company that was doing renovations on Notre Dame Cathedral says workers smoke cigarettes on the site, even though it was against the rules. But he refute claims that this may have been a reason for the blaze. He noted that the fire started inside the spire and no one was there when it happened. All right, let's continue the spooks. The U.S. and U.K. could end up in an espionage brawl(ph) over Huawei. And that's because China's telecom giant is getting the go ahead to help Britain build their 5G networks but with conditions. It is banned from sensitive parts of the project, the U.S., however, still does not like it. The U.K. though says it's on top of it.</s>JEREMY FLEMING, DIRECTOR, U.K. GOVERNMENT COMMUNICATIONS HEADQUARTERS: A flag of origin of 5G equipment is an important, but it is a secondary factor. When we analyze a company for their suitability to supply equipment to the U.K.'s telecom networks, we're looking at the risks that arise from their security and engineering processes.</s>CHATTERLEY: There are worries though especially in Washington that Huawei's gear could add to this cyber Trojan horse for the Chinese government. Ciaran Martin is the CEO of Britain's National Cyber Security Center, its parent is GCHK, I got my teeth in, he told my colleague Nina dos Santos why the U.K. isn't really sticking its neck out.</s>CIARAN MARTIN, CHIEF EXECUTIVE OFFICER, NATIONAL CYBER SECURITY CENTER, BRITAIN: It's not all about Huawei, Huawei's potential involvement is one important part of it. But in the last two and a half years since the NCSC was set up, the most serious attack on the U.K. telecommunication sector was a Russian attack on a U.K. telecom's company that involved no Chinese kits and no Huawei. So, we have to build systems and networks that are resilient to all attackers.</s>NINA DOS SANTOS, CNN CORRESPONDENT: But is there a good enough answer really here? I mean, one British member of parliament who sits on the Foreign Affairs Select Committee has said that this decision if the U.K. were to grant Huawei the ability to have a limited participation in the 5G network is short sighted and has effectively a cyber Trojan horse. I mean, the point they're making is that this could be a back door for espionage and a back door for disruptive activity.</s>MARTIN: I'll make two points. The first is the decision whenever it is, will quite properly be announced in front of parliament by the Digital Secretary Jeremy Wright. And at that point, we'll be able to say a lot more about this sort of underlying analysis of whatever decision it is taking. But I'm confident that it will give us the sort of framework we need for resilient and safer 5G systems. The second point to the so-called Trojan horse analogy is about the way these networks work. And we've set out very transparently, very objectively using the best of offensive from defensive to execute expertise whole 5G security needs to work. One important point is that any piece of kit can be vulnerable, nothing is invulnerable. So whether it's flagged from a particular country, wherever the supply chain from or his western supply comes from, you have to assume the parts of kit can be compromised. And you've got to build the defenses accordingly. So it's a really complicated set of issues, and we've started out expertly and technically and we'll do so in the future.</s>DOS SANTOS: Those are the operational technicalities, but when we're talking about the ownership structure of the company and its links to the potential links to the government, that puts you in a whole different paradigm, doesn't it?</s>MARTIN: Well, when one speaks of Huawei, it's worth remembering that the U.K. has been managing through GHQ(ph) and literally the National Cyber Security Center's part to use HQ(ph). The U.K. has been managing Huawei's controlled presence in the U.K. for more than 15 years. And that is not done on the basis of trusting the company or trusting its governments, it's done on the basis of verifying -- it's done on the basis also of looking at the way the networks are built, looking at the way they're monitored so that we can make sure that, that sort of disruption, whether from China or from anybody else because anybody could attack regardless of the supplier and cannot happen in a way that would cause large scale national harm.</s>CHATTERLEY: The U.K.'s decision may set up a rift with its key intelligence partners, the alliance known as the 5is. New Zealand and Australia have banned Huawei's equipment from their 5G networks. Canada is considering the same, the United States is leading the campaign. In February, it even warned it would not share information with countries that use Huawei's technology. You just heard from the head of Britain's Cyber Security Center. We're now joined by the former director of the U.S. equivalent. Joining me as well Beckstrom; he's formerly of the U.S. National Cyber Security Center. Rod, fantastic to have you on the show. What's your view on what --</s>ROD BECKSTROM, FORMER DIRECTOR, ICANN: Thank you --</s>CHATTERLEY: The U.K. has decided here. Are they making a strategic mistake in working with Huawei here in 5G networks?</s>BECKSTROM: OK, so we'll delve into this for a second. I think it's easy to say it's a mistake or not. It's a complex issue and it involves intelligence issues, it involves trade issues, and it involves resilience and network security issues of can you actually keep a network up and running? To give a little context here is, these switches are like the spinal cord of the nervous system of the internet. So they're right inside the backbone, they're very critical. And the concern here is that another hostile government might be putting in Trojan horses or what we call back doors. So yes, that's definitely possible. But as your director in the cyber security center in the U.K. said, everything is vulnerable and anything can be hacked. So it's not clear that the network is going to be less secure because of its decision.</s>CHATTERLEY: I mean, one of the beauties of 5G technology, though, is that things speeds, internet speeds will be quicker. There's going to be greater connectivity --</s>BECKSTROM: Yes --</s>CHATTERLEY: Everything is going to be able to talk to everything else --</s>BECKSTROM: Exactly --</s>CHATTERLEY: That much more quickly. If I refer you to your own law, Beckstrom's law, you say anything connected can be hacked, everything is vulnerable --</s>BECKSTROM: Yes --</s>CHATTERLEY: Simply just by being connected. So just by inference, if we're talking about greater connectivity, we're talking about greater vulnerability. Can we mitigate --</s>BECKSTROM: Precisely --</s>CHATTERLEY: Those risks?</s>BECKSTROM: Well, you know, as your director talked about, you want a layer on defenses. The reality is, they suffer systems inside the switches. First, there's billions of like literally transistors inside those switches in the very chips and semi-conductors. And there's millions of lines of source code, and any of those might be tampered with, to make the devices vulnerable. Not only to the host government or the government that the company comes from in this case, China. But other governments might as well be trying to put in back doors or their own Trojan horses. So in a way, it's a bit of a tip of the hat of the American Intelligent services towards the Chinese, to say that they're concerned. But if Huawei sells these, that they're so well, you know, battened down from their security standpoint, that they're hard to penetrate from you know, from other perspectives. But -- so it's a very complex issue. And I can make an argument, Julia, that having a mixture of switches and technology providers in the 5G networks will make it more resilient for the U.K. or any other government. Because intelligence is not the only issue here. I mean, everyone is spying on everyone. That's what goes on.</s>CHATTERLEY: Given --</s>BECKSTROM: And this is part -- this is -- yes, this is a given, and that's -- this is part of the environment. But the reality is, we can't say that -- I mean, the network is more resilient if it's got more different providers that are there, that have put the solution --</s>CHATTERLEY: So I can --</s>BECKSTROM: To support it. Because in --</s>CHATTERLEY: I can make another --</s>BECKSTROM: Yes --</s>CHATTERLEY: Argument here, and you hinted us that --</s>BECKSTROM:  OK -- CHATTERLEY: In your first answer, and that was, there are trade relevancies here too. What's the likelihood that when we ultimately see some kind of deal between the United States and China that there's some carve out here for Huawei, and the United States suddenly decides that, you know, it's OK, we can work with Huawei and actually than the U.K. looks really smart?</s>BECKSTROM: Yes, exactly right, Julia. I mean, there's a hardcore trade negotiation going on between the U.S. and China. You could say it's a trade war, and clearly, this is -- this is one chip in negotiations, it does have a place there, and I think it's likely to come out as part of the solution one way or another. And obviously if you're Trump and you're trying to play the American side and holding those cards, you want to keep them out of as many markets as you can and then try to negotiate a concession later for example. I'm not saying that's what he's doing, he owns his own strategy, but that is a plausible scenario.</s>CHATTERLEY: Yes, you can say it, I don't mind, Rod Beckstrom, thank you so much for joining us though and being such a diplomat.</s>BECKSTROM: Right --</s>CHATTERLEY: OK, let's move on. We just spoke to Hungary's Minister for Foreign Affairs and Trade. The country has shrugged off the U.S.' security concerns about Huawei. Peter Szijjarto said Hungary wants more trade with China and it's hypocritical for other EU nations to try and get in the way.</s>PETER SZIJJARTO, MINISTER FOR FOREIGN AFFAIRS & TRADE, HUNGARY: When I reached out to -- about the situation of Huawei in Hungary. You know, which other two companies -- which countries contacted Huawei in Hungary? Deutsche Telecom from Germany and Vodafone from the United Kingdom. It's not Hungary from which China buys 300 aircrafts, you know. So when you -- when you speak about the China-Europe cooperation, please speak to my western European colleagues because we Hungarians are interested in a good cooperation with China because they represent state of the art technology and we're happy that some of their investments come to Hungary.</s>RICHARD QUEST, CNN: I've known Huawei, you're going to follow -- you've been warned not to do any business with Huawei.</s>SZIJJARTO: As the Germans and the British because they make business with Huawei in Hungary. And I can tell you that in Hungary, irrespectively, from which country you come as a company, you have to respect national legislation. If you do respect it, you'll find corporate --</s>QUEST: But then the -- when the U.S. warns, don't do business with Huawei or you will have trouble doing business with us. Hungary stands in a difficult position.</s>SZIJJARTO: No, because it's not Hungary to make business with Huawei. It's the German Deutsche Telecom and the British Vodafone who makes business with Huawei in Hungary. We're happy with Huawei's operation in Hungary because you know what they do there? They have a logistic --</s>QUEST: Right --</s>SZIJJARTO: Hub for the export towards the western part of Europe, you know.</s>CHATTERLEY: All right, join us tomorrow night because you can hear more from the foreign minister, his thoughts on George Soros' immigration and European elections right here on QUEST MEANS BUSINESS. Now, we're going to take a quick break, but coming up, a Disney descendant voicing her dissent. What she says is wrong with the "House of Mouse" next.