Luencent Technologies, inc. (LU) -- which subsumed the legendary Bell Labs -- is in merger talks with Alcatel (ALA). Matt Armstrong of Mountain Runner makes an interesting point about the NYT story Lucent Talks Raise Issue of Security.

An important Alcatel relationship was ignored here: the relationship with China. Alcatel Shangahai Bell (ASB) is a substantial partnership with equally substantial backing from its near equal partner. Alcatel is the majority partner in ASB at 50% + 1 share. It is worth reading through this presentation by ASB's Executive Vice President of Sales & Services from November 2005. ASB is particularly active and successful in Africa and elsewhere.

See also BusinessWeek (via Telecommunications Industry and Regulation).

Of course, this all raises national security issues. But even if you feel comfortable with those, try googling "Alcatel Shanghai censorship." I find that you come up with some rather interesting material. This is from IEEE Spectrum magazine in an article by Steven Cherry, The Net Effect:

China's Internet is the most efficiently censored in the world. . . .

Now China's experiment in cyberspace censorship is about to take a dramatic turn. A massive upgrade to the country's Internet will soon give China a robust, state-of-the-art infrastructure easily on a par with any in the developed world. China Telecom Corp., in Beijing, is investing US $100 million in what it calls the ChinaNet Next Carrying Network, or CN2.

The former national telephone monopoly is snapping up new network routers from four of the largest telecommunications equipment companies in the world: Cisco Systems and Juniper Networks of the United States; the French giant Alcatel; and Huawei Technologies, the only Chinese company to get a CN2 contract. During the next 12 months, the routers—the vertebrae of an Internet backbone—are to be installed in 200 cities throughout China's 31 provinces, autonomous regions, and municipalities.

Few doubt that China will emerge as a 21st-century global power. The questions now are about when it will emerge and what kind of power it will be. The issue of how China continues to censor its Internet, even as its infrastructure becomes vastly more sophisticated, has implications beyond what ideas China's populace—almost one-fifth of humanity—will be allowed to tap into. For one thing, if censorship technology flourishes in China, it will be easier and cheaper for it to also take root elsewhere. "The concern I have is that this is laying the foundation for a much more intrusive and censorship-friendly Internet infrastructure for all countries," says Roger Clarke, a consultant in Canberra, Australia, affiliated with the Australian National University. "The features that China wants installed in intermediating devices and software will gradually find their way into all of the suppliers' products, if only because it's cheaper that way."

Whether China's Internet censorship continues at the same level or—with its powerful new equipment—increases will probably play a significant role in answering the "What kind of global power?" question. Experts say that up to now, there have been technological constraints on the amount of censorship possible at the router level. In the network now taking shape in China, those constraints will be largely eliminated, making censorship more a matter of politics than of technology.

So there is a whole other way to read the potential security issues involved in a Lucent-Alcatel deal, having to do with irrevocable matters of technology transfer that will be used for upgrading their censorship capabilities in ways that can be exported worldwide: to quote a business headline from two years ago, "Alcatel Shanghai Bell Delivers Next-Generation Solutions." Let's help out that next generation and can this deal.

(On the other hand, in Today's Global Economy, as they say, there is of course the chance that this horse is already way out of the barn.)

ON A RELATED NOTE, Rebecca MacKinnon has a fine post on the subject of Yahoo and China.

You can engage in China and choose not to do certain kinds of business. Yahoo! has placed user e-mail data within legal jurisdiction of the People's Republic of China. Google and Microsoft have both chosen not to do so. Why did Yahoo! chose to do this?  Either they weren't thinking through the consequences or they don't care.

(Via BoingBoing & Dan Gilmore.)