NEW SOURCES PERIL FIBER-OPTICS BAN US FEARS SALES TO EX-USSR

NEW SOURCES PERIL FIBER-OPTICS BAN US FEARS SALES TO EX-USSR

Despite U.S. efforts to withhold the technology from the nations of the former Soviet Union, 10 countries outside the Western trading security alliance are now producing fiber-optic telephone cable that could be sold abroad, according to a congressional source who cited U.S. intelligence reports.

The official, speaking on condition of anonymity and quoting the National Security Agency, said the countries are Austria, Brazil, China, Finland, India, Israel, South Korea, Sweden, Switzerland and Taiwan.The NSA, which opposes fiber-optic cable shipments to the former Soviet republics, contends that Brazil, China, India and Israel are small-scale producers and that the other countries won't flout the Western ban.

NSA divulged the list at a recent closed-door congressional briefing. The agency has opposed the sale of fiber-optic equipment to Russia and its sister republics on grounds that it would make its spying activities more difficult.

The NSA objection has blocked an easing of restrictions by the 17-nation Coordinating Committee for Multilateral Export Controls. Retention of the restrictions prevents sales by U.S. companies that would use the cable to upgrade the old Soviet phone network.

Industry and congressional sources say the information on potential non- Cocom suppliers weakens the NSA premise by showing that proliferation of the technology means it can no longer be controlled.

"It certainly doesn't seem to back the feeling that this technology is going to go away," said one industry official who asked not to be identified.

Judy Emmel, an NSA spokeswoman, said she was not able to verify the report and referred inquiries to the State Department's Office of Cocom Affairs. Officials there were not available for comment.

News of the fiber-optic list follows a Journal of Commerce report that Cocom inspectors earlier this month cleared the shipment of some 600 miles of fiber-optic cable to Russia from an eastern German company, Carl Zeiss Jena, under a loophole in Cocom rules.

U.S. government officials have confirmed that the technology was ''indigenous" to the former East Germany and, therefore, exempt from the Cocom ban.

The widespread availability of fiber optics could also prompt further actions by U.S. intelligence agencies, one trade expert indicated.

Under the recently expired Export Administration Act, goods available in ''comparable quality and quantity" abroad must be decontrolled, said Eric L. Hirschhorn, an attorney at the Washington firm of Winston & Strawn who represents telecommunications trade associations. Any exception requires a ''finding" of national security interest by the president and, so far, no such finding has been made, Mr. Hirschhorn said.

The technology may also have spread beyond the 10 listed non-Cocom nations, according to one industry official who said Wednesday that his company was invited to tour a fiber-optic manufacturing facility in the Baltic nation of Estonia, a former Soviet republic.

A congressional aide said the proliferation issue would figure in the upcoming conference committee debate over reauthorization of the Export Administration Act. He predicted that, despite a veto threat by President Bush, the bill would emerge with a House provision to decontrol fiber-optics up to a "green-line" level already approved for China.

"I don't think we're going to have a bill unless it does," the aide said, citing industry estimates that the former Soviet Union will spend $25 billion annually on telecommunications equipment by the year 2000.

The aide also countered the NSA argument that the six "section 5k" countries that cooperate voluntarily with Cocom could automatically be trusted to deny fiber-optics to former Soviet buyers.

A move toward license-free trading within Cocom only includes full members, not the "5k" countries, he noted, suggesting that the "trust" argument is being made selectively.

Cocom consists of nations of the North Atlantic treaty Organization, except for Iceland, plus Australia and Japan.

Several sources said that NSA has stepped up its lobbying on the fiber- optics issue in recent months in response to pressure from both U.S industry and allies to lift the ban.

"NSA is increasingly getting into the export control picture, " Mr. Hirschhorn said. "They don't care about the trade balance. They don't care about competitiveness."