Peter andy purdy is chief Security Officer for huawei. He is based in washington, d. C. , and he is our guest on the communicators. What do you do for huawei . Andy my primary role is internal, although i have been doing external things for the past few months, but my responsibilities include chairing a committee of key parts of the company in the United States that tries to control riske, and and help support our overall ethics and Compliance Program so that we make sure we protect huawei, protect our companies, and continue to do business and managers Cyber Security risk. Peter what is huaweis legal and commercial status in the u. S. Right now . Andy it is a moving target. We have a pending rule to an rule pursuant to an executive order. Right now, we cant sell to the u. S. Government, cant sell to u. S. Contractors, and there is pressure for our smallcarrier customers, wireless and wireline customers, to rip out huawei gear. So, there is legislation pending that would provide funds, not adequate or providing sufficient time, that would give them money to rip out huawei equipment. So it is a difficult situation and although not official, the u. S. Government has blocked the american carriers, at t and verizon, from selling their mobile devices. Peter why do you think that is . Andy it is a complicated matter. We have the geopolitical context of the u. S. And china, and the trade talks having exasperated things. And, we also have a situation i think affects many of us in our everyday lives, where people dont want to hear or read anything that doesnt agree with their position. So we have a lot of false information out there. Some of it expressed by u. S. Government officials, and some provided by the u. S. Government to the media, but we cant meet ,with the u. S. Government. Cant meet with the u. S. Government. We dont have the opportunity to provide the fax. It is a challenging situation. Peter to help us deal with some issues that huawei and the u. S. Government are facing, john hindle of politico is our guest reporter. John thanks for having me, peter. Andy, i want to talk about the implications of huawei operations in the u. S. I think there are about 1500 employees for huawei here, but given the changes and the heat the company has gotten from the Trump Administration, fcc, congress, are those number is going to change in 2020 . And your role, too, how is that going to shift as the government moves to block out the company . Andy we have been forced to downsize in the United States. We may recall we laid off about 600 people working in our r and d capabilities, primarily in Silicon Valley in california. And, we cut down our staffs for our carrier business, enterprise business, and our device business. But frankly, when you look at our global revenues and global growth, the United States from an income perspective is really not a very important factor for huawei. Although it is the largest market in the world, and we would love to have the chance to talk with the u. S. Government about doing business here. John will you expect further cuts in 20 in terms of the staffing . Is there a sense of how that might change . Andy it is more likely than not that there will be additional cuts. The legislation that is pending that would provide funds to allow our 60 smaller customers to rip and replace huawei gear. That would mean we wouldnt be able to provide software and hardware updates to the technology, so that would cause a decrease in revenue, a decrease in the workforce necessary to maintain the business. So the headwinds are definitely measurable for us. John you mentioned the trade war, and how much that has been overhang that really influences what is going on here. We are now in 2020, a u. S. President ial election year, so has there been much discussion about whether a new administration might provide any sort of reset or opening to discuss these issues in a different way . I have found myself looking at the trade war, and it is a signature issue of President Trumps. He is seeking a second term, but would things potentially be different under a president biden, a president warren . How much is this tied specifically to the Trump Administration and President Trump in particular, do you think . Andy i think it is important to understand the geopolitical context. And, that context exists, regardless of which administration is in power. The u. S. Is quite concerned about china and the rise of china, economically and militarily, and is concerned, some believe, that china wants to take over the world. So there is concern about, what is the american role with our allies in creating and maintaining the type of capability necessary to keep us safe . If china were to turn and become a kinetic warfare adversary. As we think of cyberspace, we are building a space command, as we think of cyberspace, the implications of a growing dependency by our country and others on the digitized economy and the 5g Internet Things and so forth, these are going to be increasingly dependent as a country and a world on those kinds of technologies. So that which really didnt matter so much since i left the white house over 15 years ago are really going to matter. So the question is, how do we manage the risk to the United States, regardless of who the suppliers are . That is something that is top of mind, whether you are a democrat or a republican. One of the frustrating things to me is the fact that the government wont meet with us. There is a lot of information being communicated that is not based on facts. If the government is giving various publications or speaking publicly about things that are wrong, i can only imagine what they are saying to democratic and republican leaders. I think it is important, whether in our personal lives are lives, or government, or geopolitics, to base things on facts and on data and to be objective, so we understand the risks and we can take steps necessary to address risk. Peter but andy, every time we have had a member of congress or member of the administration on, democrat or republican, we asked them would you own a huawei phone, and the answer has been no, acrosstheboard. They have information that there is a backdoor and a way for china to access that information. Andy you began your comment with a but. Your comment is agreeing with what i am saying, that democrats and republicans are worried about china. Many has said have said its really not about huawei. It is about the china government, and what the china government, in their view, could force huawei to do. For example, some Government People recently talked to some of our customers. The Government Officials thought huawei was giving away equipment free to customers. There are recent comments by a Government Official and an attorney, publicly, comparing our founders offer to license our 5g technology, which means the u. S. Government could see all the hardware and all the software, he likened it to elon musks tweet that got him in deep trouble with the fcc, calling his offer to license the 5g technology to america basically the equivalent of a criminal fraud, which is objectively false. Finally, another example of what has been said publicly is that we update our equipment with Software Updates from china. A Government Official said that. That is demonstrably false. And, of course, the Government Officials dont hear this, because they are hearing one side of the story. They are not willing to listen to us or other major experts who say there are real cybersecurity risks in the world, and all the equipment, the carriers and the equipment providers, have to be subject to strict scrutiny and testing of products and conformance of measures, because the bad guys can hack into everybodys products, particularly with a Global Supply chain deeply embedded in china. Those are the kinds of things necessary to make sure america is safe, going forward, and that is where the discussion needs to get to the next level. When you talk about the Chinese Government, in the wall street journal recently was this report of review of credit facilities, tax breaks and other Financial Assistance details for the first time how huawei had access to as much as 75 billion 75 billion in state support as it grew from a littleknown vendor of phone switches to the Worlds Largest telecom company. And, in that article, it said comparing 75 billion to 45 billion cisco is getting, so put things in perspective. And that is an instance where the u. S. Government provided dramatically inflated information to the wall street journal for that story, way above the 75 billion figure. And the fact is, and hopefully show him someone can show us the information so we can have a chance to say that is right or wrong, the biggest item and there is over 45 billion. If you take that out, we are lower than what cisco is getting around the world for china. The idea of Chinese Governmentbacked banks providing loans to customers, lines of credit. So the question is, is that 45 of the 75, is that the amount of money customers borrowed, they are alleging it at artificially low rates and giving unfair advantage to huawei, because our customers would have lowercost financing. But the fact is, very few customers use the lines of credit, so i cant tell from the article whether the 45 billion is just theoretical lines of credit, but we know only 4 billion or 5 billion of the 45 billion, i know this gets technical, was actually used by customers to buy our products. And when you are looking at 150 billion in revenue, 4 billion to 5 billion in support is nothing. Lets talk about the facts, but when there isnt discussion and people are not even willing to think about or talk about the facts, i would suggest as we said previously, block huawei if you must, but lets do the things necessary to make america and our allies safer, and we are not doing that enough. That is the kind of thing we are recommending. John you talked about issues with the administration not being open to speaking with huawei. What does lobbying look like for the company at this point . I wonder if that resistance also extends to member of congress. To what degree is the huawei lobbying operation like going into 2020 . One of those conversations or efforts looking like . Andy you are more of an expert on lobbying and how to affect Public Policy. Certainly, some of our competitors who make significant Campaign Contributions to members of congress, and we dont make such contributions, that can have an impact on the discussion. There are some people on capitol hill that are willing to talk with us about some of the issues, and we are going to redouble our efforts to reach out to them to try to have some of these discussions about what the facts and evidence are, and frankly, from my perspective, my focus is security and risk, what is necessary to make america safer with transparency. John how much are you talking with some of the smaller, Wireless Companies you work with companies . You work with you said around 60 right now . Andy yes. John what have they been saying, given the administration and others have moved to push out huaweis influence, talking about even ripping and replacing the equipment. What is the message from them . Andy they provided substantial input to the federal communications commission, both last year and this year. I believe they provided input to the commerce department, in response to the executive order from last year. They told us about some of their discussions with the government where it is clear some of the folks in the government think we give away our equipment free, and some of our customers are telling the government they have particular measures they can use to help manage the risk, whether it is from huawei equipment, or nokia or ericsson. So those kinds of discussions are very helpful. They said to the government that the efforts to do what they call rip and replace, which is pending legislation coming up soon this year, that the amount of moneys discuss are not nearly as muffin the timeframe in thely enough timeframe, and it is going to take a lot more time and likely put some out of business. Peter andy purdy, when you talk about rip and replace, how much huawei equipment is being used in the states right now . Andy i am not sure i can give a number. We have, 60 smaller suppliers, about 40 at tier three, the smallest carriers for internet and wireless service. About 40 of those are in rural america, underserved america, so it is the smaller communities where schools and colleges and companies depend on our technology in the service these carriers to do ausiness, and it is relatively small amount of income. But we are committed to continue to support those rural customers if we are allowed to do that. And huawei had a record year last year when it comes to revenues . Andy about 122 billion, up 18 . But it is important, that people are misunderstanding the data. We took a significant hit from the pressure from the u. S. Government, blocking nearly 300 American Companies that we spent over 11 billion on last year, over 45,000 american jobs depend on it. But despite that, in the Third Quarter mark at the Third Quarter mark, we were up 24 , and at yearend, we were only up 18 . For a large company, that is a lot. We have very substantial headwinds going into the year. The Global Environment is a challenge, and the challenge of the competitive nature of the world and the change taking place, it will make the next year or two very challenging for huawei. Peter and your rotating writes theghts external environment is more , inlicated than ever and the long term, the u. S. Government will continue to suppress the leading technology, a challenging environment for huawei to survive. Thrive and survive. Andy thats right, and the environment is different around the world. We are in 170 countries. Every country has its own environment. Every country has carriers and mobile operators trying to figure out what to spend their money on. So as we talk about digitization, 5g, cloud, artificial intelligence, block chain, these things are going to make life better and create millions of jobs around the world, but the companies that are going to invest, they have to see the business case. There is a lot of decisionmaking in individual countries or when the world that is going to affect our opportunities to grow our revenue and serve our customers. John in the yearend message peter referred to, he had also said that survival would be our first priority. What would threaten the survival of huawei . Are there specific things you guys are worried about that could become bigger . U. S. Market marketplace is a smaller share, but that was a line that did jump out at me. How existential is this right now for huawei . Andy i think the challenge of how much we are going to grow and when is a real challenge. The situation with digitization around the world, the challenge of when you are in a competitive market people think people buy our stuff because it is cheap. That is not true. We lose contracts everyday. We lose them around the world, and we even lose them in china, because china allows ericsson and nokia to compete against us. Half to be competitive, improve our work as individuals and accompany and optimize our company. We have to get rid of dead wood, hold the front line more accountable, and we are like any Major Company trying to meet the challenges of the world. Its impacted by the fact that most of these American Companies cant buy from us, no question. And, it is impacted by the fact we cant buy from google. So coming up with a Huawei MobileService Alternative to google is a major priority for the company, and it is difficult. It takes time, not just to create the technology, but you have got to tested, and some things really take time. You cant have nine women make a baby in one month. Things take time and that is going to have an impact on our growth. Some of our growth in 2019 was based on momentum from the past. The momentum is gone, and we are not going to get the kind of growth in early 2020 that we had in early 2019. John is there a timetable for an alternative of what google provided at this point . I know huawei has talked up its own efforts along those lines, but where is that internally right now . You talk about testing, but when it comes to what google specifically offered, where is that . Andy i honestly dont know the timeframe. I will be going to china for annual meetings next week. I do know there is a lot of work with the App Developers who would provide apps for the platform, because that is a critical part of replacing, for our mobile devices, we sold about 240 million last year, of creating a platform for the app. So you have not just creating the infrastructure, but you have to motivate the developers, give them what they need so they can be working in parallel. I dont know what the date is. It is a major commitment, and it is very difficult. John i want to turn to the recent fcc vote, voting unanimously voting to bar u. S. Telecom providers that receive subsidies working with huawei and cte. Zte. Since then, the fcc has been sued by huawei over that vote. What led you to go to court, and what are your feelings about the prospects there . They had allowed for a bit of a regulatory challenge through that, saying huawei could not challenge the determination that they are a threat. Why go to court, and what do you see happening next . Andy as a former longtime attorney and federal prosecutor, i have some sense of how sensitive federal judges are to making comment on pending cases. So i want to be a little careful about what i say. But frankly, we had to respond, because, as in our filing. I think it is part of a broader problem in our life. If it werent for double standards, there wouldnt be no standards at all. People want to read and listen to what they believe in. They dont care about evidence because they want the other side to have evidence. I use the example of how President Trump looks at the democrats and impeachment. He sees them ignoring evidence, he sees them violating the constitution, not following due process, not having a fair system. He looks at them as having the end justify the means, so we had to say, fcc, what you have done is beyond the pale, it conflicts with constitutional requirements of due process, the committeen which your is based the procedures act you , are supposed to follow and conflicts with your own precedent, and that is wrong. They are supposed to be an independent agency. They are saying they are going to carpet bomb huawei out of existence in the u. S. , and that we dont need evidence to prove it. That is wrong. John do you think they havent been acting independently . Do you think they have absorbed the Administration Stance on that . Attorney general bill barr did write a long letter critical of huawei, name checked several different items from the record, and said the fcc should proceed with this vote. Do you think their independence has been threatened in the context of huawei . Andy that is a very loaded word, although an appropriate question. I think how i characterize what our filing said about what they did, i think that answers your question. There are certain things they are supposed to do, certain processes they are supposed to follow, and they clearly did not do that. John commissioner jeffrey starks, a democrat on the commission, has been the point person on supply chain issues, held a workshop, wrote a report, and tried to step up in a certain way. Has there been any direct contact between huawei and commissioner starks on these issues or has that door also been closed . Andy not in the last year or so. John no . Andy not since the campaign against huawei ramped up in earnest. Peter andy purdy, when you hear that huawei has a backdoor and that information will be shared or the internet will be turned off, what is your response . Andy really two things, and this gets to the issue of what is necessary to make america safer and i hope members of congress on the executive rash branch will consider the facts. Five nations in the world have the ability to implant every functionality in hardware and software. The u. S. Government says that cannot be found. Well, if you dont look it cant be found. When people talk about china and huawei, they are concerned about backdoors and they are concerned our employees, outside the u. S. Or in the u. S. , would improperly use our access to access Customer Data and steal data. The back door, the former Principal Deputy to the director of National Intelligence says you can test for backdoors. So, if you can test for backdoors, that means you can put in place mechanisms, and we and ive suggested we can do this, that we can prove that there are no backdoors in the product. And if you can prove there are no backdoors in the products, regardless of what theoretical power the Chinese Government has over huawei, you have addressed that issue. The second issue, access to Customer Networks and Customer Data. A lot of talks about a chinese law or whatever. The fact is, the u. S. Government does not believe any law matters in china. They believe china can force us to do bad things. In terms of access to data, they dont recognize and its critically important to make rica safer what is the in terms of access to data, they dont recognize the role of the carriers and mobile operators in managing the networks and controlling whoever is going to service their equipment, whether it is huawei or a third party . So mechanisms are necessary, and the u. S. Government should require it for everybody accessing americas communication networks. We provide assurance and transparency. We dont access customers networks, we only use speciallyconfigured laptop using a thirdparty and only after written permission from each customer, each of the 60 customers, then we access. Every keystroke of those laptops is recorded, provided by the customers, and they know when, what, and how we access to. And it is not part of the core network. So just like in backdoors, we can prove our people in the u. S. Have not been subject to the undue influence of the china government, relative to the second Major National security issue, that we will get a hold of and sent to china sensitive data. Peter john, we have two minutes left. John one big part of this is 5g and what that will mean for the u. S. And china and the world going forward. How competitive do you see the 5g marketplace in the u. S. Right now, and how does that factor into some of these discussions, too . The race to 5g has been thrown around a lot as a phrase. It is usually referring to the u. S. And china trying to roll out these advanced networks. Is the u. S. Is competitive as it should be, and how is that a piece of this . Andy it is very much a moving target, given the rulemaking in place. Officials have said the rulemaking is putting in place a mechanism that wont adequately promote competition. Competition is critical. We have a tendency, in the United States, we want to be competitive and we want to advertise. Some people put on their phone 5g, so they can claim it is the latest and the best. There is not enough competition in Telecom Operators around the world, there is not enough investment. We invest far more r d than nokia and ericsson. They need to invest more. Competition is critical for innovation, risk, and resiliency, maintaining the capabilities to support our Communications Systems that we are going to come increasingly reliant on in the future. John one other piece you talked about is to test for backdoors and things icad. The Trump Administration has been saying that is not possible. They have been putting out documents in the last month, i believe, saying the code is changing all the time, there is no way to look at that. Do you see that as Incorrect Information they are spreading . Andy it is part of the mischaracterization about the way 5g will work and the way 5g standards are going to work. We are going to update our equipment the same way you update a phone. It will be through the operators and tested before it is updated. So they are incorrect about it. We can manage the risk as a nation much more effective at effectively than that. Peter andy purdy is the chief Security Officer for huawei usa and john hendel covers tech for politico. Gentlemen, thank you for being on the communicators. This episode and others are available as podcasts. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] the house will be in order. For 40 years, cspan provides america unfiltered coverage of congress, the white house, the supreme court, and Public Policy events from washington dc and around the country, so you can make up your own mind. Created by cable in 1979, cspan is brought to you by your local cable or satellite provider. Cspan, your unfiltered view of government. We have the votes. Once the impeachment trial has to pass a resolution, essentially the same, very similar, to the 100 to nothing vote in the clinton trial. Under the rules for the clinton impeachment trial, house managers and president s lawyers have each 24 hours to present their cases. Senators were able to ask questions for up to 16 hours before debating in voting on whether to dismiss the case altogether or call witnesses. Watch all of the evidence once all of the dividends evidence was presented, there is a final vote behind closed doors. Leading to a final vote on each article of impeachment. Chuck schumer responded to senator mcconnell. Right now, the republican leader and i have different visions about what it means to conduct a fair trial. Democrats believe a fair trial means all the relevant facts come out, and witnesses and documents are part of that trial. Whoever heard of a trial without witnesses and documents . Its unprecedented. If you are afraid of the facts, if you are afraid of what would come out, if you want to cover it up, even in something as serious as impeachment, to say no witnesses and no documents. We say, witnesses and documents, fair trial. No witnesses and no documents, cover up. The impeachment of President Trump. Continue to follow the process on cspan, leading to a senate trial. Live, unfiltered coverage, on cspan, on demand at cspan. Org impeachment, and listen on the free cspan radio new app. N on the on the free cspan radio app. Heres a quick look at the president s of the end in ohio. Test president s event in ohio. The president past event in ohio. Mr. Trump representative bill johnson. Where is bill . Thank you, bill. Great job. Great job. Friends, jimw. Ordan a lot of your congressmen are right now in congress. They said, should we come with you . I said no, stay back and vote. They are voting, on some pretty important stuff, right . But we were lucky to get bill. Great warrior. Ohio Lieutenant Governor john yusuf. Thank you, john. Thank you, john, great job. State treasurer robert sprague. Thank you. You have a lot more money in the bank, robert, than you ever did. Court justice judy french. Thank you, judy. Great job. , a highlyte president respected man. Thank you, larry. And a woman who really has great friend of mine. She took over this party. Other people never had a chance against jean. And the man who was in charge of my campaign in ohio. I said i like this guys name. I dont know why. His name is bobby do check. Bob. He said we are going to win big, sir. We keep hearing we cannot win unless we win the great state of ohio. Thats these guys. Once i was leading ohio by a lot in the polls, they were not saying it anymore, it was terrible. But bob was incredible, did a fantastic job. I said bob, we dont have the governor. We dont have the head of the republican party. Minor problem, running as a republican. He pumped out on us, right . This guy. He said sir, you have the people. Happens sohat bob, let me ask you, just out of curiosity. I dont have the leaders with us. . S that good or bad he said sir, its great, you just went up three points. Do believe this . He said dont worry, you are going to win. We won by a lot. We won by a lot more than ever thought possible. Thank you, bob. Representative sherry bruce of, the Democratic CommitteeCampaign Chair talks about efforts to keep a democratic majority in the house of representatives. Watch the live interview sunday at 10 00 a. M. And again at 6 00 p. M. Eastern on cspan. Are going to take a look now at the world in 2020. Here with us is an executive and diplomatic editor at the economist. Cover. The the world in 2020. You say this year, 2020, will not be short of drama. Politically, the big drama is going to be the