news

[Brock N. Meeks <brock () well sf ca us>]

Dave -- I broke this story but didn't see much follow-up in the
big newspaper press, but I think it's very important story.  I
thought it might be of interest for the "interesting people"
mailing list.
 
AT&T has always had a more than cozy relationship with the
federal govt., so to come out with such a harsh letter is really
something, at least from my little corner of the world.
 
The follow up story, which I've also written, is that Commerce
has indeed acted on AT&T demands.
 
Cheers,
 
Brock
 
=-=-=-=-=-=-=
 
COMMUNICATIONS DAILY
copyright 1993
Monday August 9, 1993
May Not Be Redistributed Beyond
"Interesting People" mailing list.
 
 
AT&T CHARGES U.S.-ISRAEL TALKS ON FIBER GEAR THREATEN ITS MARKET
by Brock N. Meeks
 
     Clinton Administration has begun series of secret
negotiations with Israeli govt. in attempt to obtain assurances
that latter will restrict exports of Israeli-made high-speed
fiber switching gear to China, AT&T said in Aug. 6 letter to
Commerce Dept.  Such agreements between U.S. and Israel would be
necessary because Israeli companies aren't prohibited from
exporting such gear, as U.S. companies are.  AT&T's harshly
worded letter claims White House is violating U.S. law by
initating talks, bypassing Commerce Dept. regulations.
 
     AT&T, in letter to Iain Baird, acting Asst. Secy. for Export
Administration at Commerce, said that for 2 months it has had
request in at Commerce for foreign availability assessment of
telecommunications equipment controlled by Export Administration
Act.  AT&T provided Commerce with evidence that high-speed fiber
transmission gear -- which U.S. companies currently are banned from
exporting -- is "available in fact" to China from Israel.  AT&T
also submitted evidence that China has its own capability for
making such equipment.  In light of those facts, "we see no basis
for a continued delay and therefore request that the Commerce
Department immediately initiate" foreign availability review, AT&T
said.
 
     AT&T said "it must be assumed" that if U.S. negotiations with
Israeli govt. are successful, Commerce will use it to "support a
finding that controlled telecommunications transmission equipment
is not" readily available to China and that foreign availability
doesn't exist.  U.S. could then use that finding to keep export
control intact.
 
     AT&T has been told that Clinton Administration won't lift
export restrictions on fiber switching equipment to China, AT&T
spokesman said, although company has received no official word from
White House.  Govt. cited national security concerns in decision,
spokesman said.  High-speed equipment exports are banned under
Coordinating Committee for Multilateral Export Control (COCOM)
agreements.
 
     AT&T testified last month that ban was costing it millions
in lost sales to China.  Commerce Secy. Ronald Brown told House
Foreign Affairs Subcommittee Aug. 5 that ban was "major
impediment" to U.S. businesses and should be reevaluated in light
of changing political climate.  China's massive push to build up
its infrastructure needs fiber backbone and will get switches "if
not from Israel today, maybe India tomorrow," AT&T spokesman
said.
 
 
     AT&T letter said:  "It is our firm view that attempting to
eliminate foreign availability by pressuring Israel to halt
legitimate commercial exports is short-sighted, counterproductive,
harmful to both American and Israeli exporters."  Administration's
response to evidence submitted by AT&T is "the result of a policy
on telecommunications export controls that is seriously flawed,"
AT&T said.  If U.S. is successful in efforts to halt Israeli sales,
it "will simply give China added incentive" to further develop its
"own indigenous technology."  Likely result of that would be
"long-term displacement of both American and Israeli exporters...
and little apparent advancement of U.S. national security
interests," company said.
 
     State and Commerce Dept. sources provided little detail on
internal debates on easing restrictions other than to say
Administration was being pressured by intelligence community and
military to keep curbs in place because intelligence-gathering
capability would be hampered by high-speed fiber.  President
Clinton may be bowing to Defense Dept. concerns to help smooth out
rocky relations between White House and military, State Dept.
source said.
 
     Deputy Defense Secy. William Perry is on record as favoring
lifting COCOM restrictions on computer equipment but not on
telecommunications equipment, which if exported, he said, still
would pose security threat.
 
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