[ISN] ZTE Device Called American Spurned After China Spy Angst

http://www.bloomberg.com/news/2013-09-19/zte-device-called-american-spurned-after-china-spy-angst.html By Kathleen Miller Bloomberg.com Sep 19, 2013 The U.S. government stripped a videoconferencing system contract from a Maryland company after a federal agency said the device marketed as American-made is really Chinese. The technology is produced by Shenzhen-based ZTE Corp. (000063), China’s No. 2 phone-equipment maker. It worked with CyberPoint International LLC, a small business based in Baltimore, to make its videoconferencing device available to U.S. agencies via contract. CyberPoint’s Prescient unit built and installed firewalls in the system, which it said “substantially transformed” the product. U.S. Customs and Border Protection disagreed, saying the government should treat the products as Chinese, according to a ruling published today in the Federal Register. The decision is the latest impediment to U.S. growth for ZTE, which was effectively blacklisted last year by a congressional committee that said its products may aid Chinese spying. “It’s somewhat devastating for them,” said Ray Mota, founder of Gilbert, Arizona-based ACG Research, a networking-equipment industry consulting company. “They’ll have to re-strategize on how to approach this market and come up with alternatives.” […]