Meet the U.S. Defense Firm Supplying Iran’s Internet

A company that works for American spies and generals has quietly started providing Internet service to the Islamic Republic. What’s going on here?

11.01.15 4:01 AM ET

Nestled in a suburban Washington, D.C., office park, across the street from a shopping mall, a technology company that counts the U.S. Defense Department as its biggest customer is charting out a new frontier: providing Internet service to Iran.

But GTT Communications Inc.—headquartered in McLean, Virginia, just a 15-minute drive from the headquarters of the CIA and hired by various unnamed U.S. intelligence agencies and satellite operators—hasn’t exactly been touting its new venture.

The company has issued no press release about its deal with an undersea cable network that sells Internet services to Iran and other Persian Gulf. (One of the cables comes ashore at the city of Bushehr, home to a nuclear plant that’s been the subject of intense debate about its role in Iran’s nuclear program.)

Instead, the partnership was announced in a single tweet last May; both parties have been largely silent about the deal since then. When contacted by The Daily Beast for details about the deal with the Doha-based submarine cable operator, Gulf Bridge International, a GTT spokesperson said the agreement wouldn’t be finalized for a few more weeks.

And yet technical data shows that GTT was providing Internet service to Iran for months.

The Islamic Republic has been off limits to most U.S. companies for years. A complex sanctions regime, meant in part to isolate the regime in Tehran and obstruct its efforts to obtain a nuclear weapon, bars the sale of good and services by many American companies, including through intermediaries.

But last year, the Treasury Department, which administers the sanctions program, issued new rules (PDF) authorizing the sale of “consumer-grade Intemet connectivity services.” That created an opening for GTT, as well as any other American companies that want to cash in on the Iranian market for Internet service, which is booming thanks in large part to a surge of new mobile phone users in the country.

The company began providing bandwidth to Iran’s state-owned telecom company, TIC, via one of Gulf Bridge’s submarines cables on June 10, Doug Madory, the director of analysis at Dyn, a research company that monitors Internet connectivity, told The Daily Beast. Notably, that was nearly a month before the U.S., Iran, and other world powers announced an agreement to curb Iran’s nuclear weapons program in exchange for lifting some sanctions.

Only Iranian officials would know the exact percentage of Iran’s Internet traffic that was flowing to and from GTT, said Madory, who first noted the company’s presence in Iran last month. But, he said, the Iranian Internet is effectively composed of about 5,000 network routes, and at its peak in August, “GTT was handling anywhere from some to all of the international traffic” to more than 1,800 of those routes, or about 16.6 percent of the total.

So GTT was not some small-time provider.

Asked for more details about its work in Iran, the GTT spokesperson, Ann Rote, said that she would be able to provide specifics after the partnership was finalized.

But, Rote said, the company’s work violated no sanctions, and was in line with “U.S. policy to facilitate the flow of information to and from Iran.”

“GTT does not conduct any business in Iran or with the Government of Iran,” Rote said. “Any Internet traffic coming from Iran and transiting GTT’s global IP [Internet protocol] network is coming indirectly from customers of wholesale or carrier partners in the Middle East region.”

Technically, she’s right. GTT’s customer is Gulf Bridge International, the undersea cable provider. But the technical data strongly suggest that GTT knew—or should have known—that it was providing service to the state telecom of Iran. And that’s a crucial question, because while U.S. companies are allowed to sell Internet service to Iran, they may not do so if they have “knowledge or reason to know that such services … are intended for the Government of Iran,” according to Treasury Department rules. State-owned companies are also covered by that prohibition, two lawyers who are expert in the sanctions rules told The Daily Beast.

In October, GTT was “transiting” 521 Iranian routes, Madory said, meaning that at some level GTT was responsible for “propagating these routes to the greater Internet.” Effectively, GTT was advertising that route for traffic destined to particular Internet addresses in Iran.

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“After the routes are propagated, the traffic flows in the opposite direction in this case through GTT,” Madory said.

But on October 5, the service abruptly stopped, apparently after one of Gulf Bridge International’s cables was cut. The service has not been restored, Madory said. Up until that point, it had been going strong for nearly four months.

GTT’s service to Iran raises questions about why an American Internet company with close ties to the U.S. government and intelligence community would be selling off bandwidth to a country that is still a major strategic adversary of the United States.

Despite the nuclear deal, Iran is providing the bulk of ground forces to crush Syrian rebels opposed to Bashar al-Assad, and is part of an emerging power axis with Russia, which has launched airstrikes to keep the Syrian dictator in power and to keep Moscow’s foothold in the Middle East.

But Iran is expanding economically—and digitally—as well. And that presents an opportunity for American technology companies.

Since August 2014, when the Iran’s national telecom regulator began awarding licenses for 3G and 4G mobile phone service, subscriptions have surged, to about 20.5 million people last month, Amy Cameron, a senior analyst with BMI Research, told The Daily Beast. That’s about 27 percent of the country’s population, the majority of which is under 30 and, presumably, eager to embrace new technologies and the access to information that comes with them.

The surge in mobile phone service is a big business, and Iran needs more Internet addresses and access for all those new devices, Cameron said. In addition to acquiring new service routes—like the ones GTT provides—the government has also been buying up Internet addresses that use the so-called “version 4” protocol, a vital, and increasingly scarce, component of the world’s Internet infrastructure. And Iran plans to auction more wireless broadband spectrum, which should in turn attract more investment in mobile networks.

“All of these developments point towards Iran making concerted efforts to open its Internet market,” Cameron said. Of course, there are limits to that openness: Iran’s primary telecom company is owned by the military, and the Tehran government monitors communications for prohibited content.

All of which makes its affiliation with a telecom company in suburban Washington even more unusual.