NZ firm linked to suspect spy row

Technology developed at Waikato University and commercialised with more than $6 million in government grants may be part of Britain's top-secret Tempora spy project, disclosed last week by US National Security Agency whistleblower Edward Snowden.

Tempora, secretly set up to intercept and record all network traffic into the United Kingdom, uses probes installed on 200 fibre-optic cables as they come ashore, according to information leaked by Snowden.

Kiwi-based company Endace is one of few developing such probes - though the company itself remains coy about its involvement, saying only that it does do business with "friendly governments".

Until recently, technology constraints limited interception to targeted communications, or taps. However, new systems developed by companies such as Auckland-based Endace now allow intelligence agencies to intercept and record everything on a network, including phone calls, emails, instant messages and social media traffic.

Endace's core technology is a new kind of network probe, originally developed at Waikato University, that leaves no trace on communications and does not interfere with network performance.

Within the surveillance industry this is called "passive network monitoring".

Endace, which trades under the slogan "The power to see all", was named in WikiLeaks' 2011 "Spy Files" as one of a slew of companies delivering products and services to international intelligence agencies. At the time, WikiLeaks highlighted a quote from one of Endace's marketing presentations: "Why sample when you can monitor all network traffic inexpensively."

"We certainly sell monitoring technology to friendly governments," Endace chief executive Mike Riley said last week.

"Whether or not that has found its way into these particular uses I wouldn't know."

Riley said there are legitimate and valid reasons for monitoring network communications.

"It's what we do, 100 per cent packet capture off the wire," he said.

Endace's website says the company does business with "top US and European intelligence agencies" while other marketing material says that where national security is concerned, there can be "no compromise".

Analysts say Endace has few challengers in its field.

"The quality of its network monitoring products has seen it displace technologies from the likes of Netscout and Niksun, the industry leaders," a cybersecurity sector analysis from Collin Stewart said last year.

"At the top end of ethernet network speeds [100 gigabits per second], Endace's products are virtually unchallenged."

In fact, its products appear to be developed in consultation with international intelligence agency customers.

Announcing a new range of network monitoring and recording systems for government agencies in 2011, Neil Livingston, chief product officer at Endace, said the company worked closely with government intelligence customers and had built an "intimate understanding" of their requirements.

Endace went on to demonstrate its new probe at the US Department of Defense Intelligence Information System show in Detroit.

Endace's probe technology was developed by Dr Ian Graham, former dean at the School of Computing and Mathematical Sciences at the University of Waikato.

The commercial spin-off was later listed on the London Stock Exchange until it was bought by Californian networking company Emulex for $US120 million earlier this year.

Endace, however, remains based in and still manufactures and exports from New Zealand. It has received several government grants, including a $6.7m technology development grant in 2010, to support its research and development and commercialisation efforts.

New Zealand is part of the "Five Eyes" intelligence co-operation alliance of spy agencies in Australia, NZ, the UK, Canada and the US.

Listening posts at Waihopai Valley, near Blenheim, and at Tangimoana, near Palmerston North, are believed to be part of the alliance's network.

Sunday Star Times