Huawei: $100B in revenue, 180,000 employees outside US and other embarrassing facts

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This is behind their paywall, On 5G, the United States is building Betamax while China builds VHS … but you can probably predict what it says.

You can read elsewhere (US bets on different mobile airwaves from rest of the world – and that might cost it the 5G racethat the US 5G system will be fundamentally different from systems being built anywhere else in the world. They systems do not need to be compatible, but they certainly will not be.

In fact, you can read below (The U.S. Government Shouldn’t Run the Country’s 5G Network) that there are moves afoot to ensure that the US government is in charge of creating the new network. Which is proving difficult because ‘Five companies sell 5G radio hardware and 5G systems for carriers: HuaweiZTENokiaSamsung, and Ericsson.’

So the US has now gone after two of these companies, Huawei and ZTE. 

So according to the article by the Harvard Business Review, the US is keen on taking a typical (and cheaper) shortcut, building upon the current 4G network instead of relying on (and paying) all those darn foreign companies for their advanced technology.

And let us not forget an earlier item published here stating Why 5G, a battleground for US and China, is also a fight for military supremacy

James Porteous


Huawei says billions of customers could be harmed by US sanctions

29 May 2019 | Sky News

Huawei has said billions of customers around the world could be harmed by US sanctions against the company – as it launched a legal challenge against some of the restrictions.

The Chinese telecoms giant’s chief legal officer Song Liuping accused Washington of setting a “dangerous precedent” and said there was “no gun, no smoke, only speculation” behind the claim that it posed a security risk.

Huawei was earlier this month placed on a blacklist banning US companies from doing business with it, in a move which immediately prompted disruption to the tech sector.

The company is the largest global maker of network equipment but is now fighting to maintain access to major markets as it rolls out next-generation 5G technology.

Mr Song said the decision to place it on a blacklist “threatens to harm our customers in over 170 countries, including more than three billion customers who use Huawei products and services around the world”.

He was speaking as Huawei filed a US court motion against a separate restriction, passed by the US congress last summer, banning federal agencies and their contractors from using Huawei equipment on security grounds – citing its ties with the Chinese government.

Mr Song told reporters at Huawei’s headquarters in Shenzhen that the “state-sanctioned campaign” against the company would not improve cyber security.

He said: “Politicians in the US are using the strength of an entire nation to come after a private company. This is not normal.”

Accusing the US of setting a “dangerous precedent”, he added: “Today it’s telecoms and Huawei. Tomorrow it could be your industry, your company, your consumers.”

Google apps and services will not feature on future Huawei phones
Image:Google apps and services will not feature on future Huawei phones

America’s blacklisting of Huawei has a major impact because the company relies heavily on US components, including computer chips, and about a third of its suppliers are American.

The company has been given an initial 90-day reprieve from the ban.

But the sanctions have already affected its partnership with Google – which has said it would continue to support existing Huawei smartphones but that future devices will not carry its flagship apps and services including maps, Gmail and its search engine.

The restrictions come at a time when the US and China are embroiled in a bitter trade dispute, in which both sides have hiked tariffs on billions of pounds worth of goods.

Central to the dispute is US President Donald Trump’s claim that China steals technology from foreign companies and unfairly subsidises Chines businesses.


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TREVOR CARPENTER/GETTY IMAGES

The U.S. Government Shouldn’t Run the Country’s 5G Network

 30 April 2019 | Larry Downes | Harvard Business Review

President Trump and Federal Communications Commission Chairman Ajit Pai recently appeared together at the White House to highlight initiatives aimed at accelerating U.S. deployment of next-generation high-speed mobile networks, known as 5G. Their plan included new auctions for needed high-frequency radio spectrum, reallocation of $20 billion in annual universal service funds for fiber-optic deployments in rural areas, streamlined permitting requirements, and the continued development of a National Spectrum Strategy, which will identify and free up underutilized frequencies currently assigned to federal agencies.

The 5G standards, which are now being finalized by global engineering working groups, will use those new frequencies to deliver dramatic increases in mobile communication speeds and capacity, while lowering both energy requirements and network response times, or “latency.” Early tests confirm 5G networks may be as much as 100 times faster than today’s average rates.

But the real significance of the meeting is what the Trump administration didn’t announce: a single 5G network built, secured, and operated by the federal government itself.

To be sure, the auctions, rural fiber, and spectrum strategy are all essential components in ensuring successful rollout of 5G throughout the U.S., which has the most mobile broadband connections among western nations. At the same time, the enormous geographic size and wildly uneven population density between the coasts has made universal and uniform high-speed adoption difficult. According to FCC data, low-population areas of the U.S. still lag in both access and speed.

Most analyses of the meeting focused on the promise of accelerated government support for 5G rollout, and for subsidies to build rural backbone networks. A few reporters, however, connected the dots linking the meeting to a raging debate within the administration over how best to manage 5G development that has roiled, hot and cold, for over a year.

In early 2018, documents first leaked of an initial plan proposed by a senior official in the National Security Council for the government to take over construction of a nationalized 5G network, following the model of the interstate highway system in the 1950’s.

That idea resurfaced last month, with senior members of President Trump’s reelection campaign calling for airwaves currently assigned to the Department of Defense to be used to build a single, wholesale 5G network that mobile operators would lease instead of building their own, competing infrastructure. A single private company, not one of the existing carriers, would have the job of building and operating it under government supervision.

FCC Chairman Pai, along with both Republican and Democratic members of the Commission and leading Members of Congress, have repeatedly and strongly rejected the idea of nationalized 5G.  When the idea first surfaced, Democratic Commissioner Jessica Rosenworcel, echoing her fellow commissioners, tweeted,  that it “really misses the mark.”

Until recently, President Trump had stayed largely out of the debate. In an enigmatic February, 2019, tweet, the president said only “I want 5G, and even 6G, technology in the United States as soon as possible.” (6G network standards have only just begun development.)

Earlier the same week, National Economic Council Director Larry Kudlow again flatly rejected the idea of a government run network. At a meeting of CTIA, the mobile industry’s trade association, Kudlow said, “The principles we’ve worked to rebuild the economy will be applied to the telecom sector and 5G. They are free market, free enterprise principles. Note how well we did on 4G; we will apply the same principles on 5G. That is our policy.”

Kudlow’s statement set the stage for Pai’s appearance with President Trump, and they struck the killing blow to any proposal for a federal takeover of 5G. “In the United States, our approach is private-sector driven and private-sector led,” the president said. “We had another alternative of doing it that would be through government investment and leading through the government. We don’t want to do that because it won’t be nearly as good, nearly as fast.”

White House support for continued private network buildouts comes at a critical time. All four major U.S. carriers — Verizon, AT&T, T-Mobile and Sprint — have been investing heavily in new 5G infrastructure, which relies less on traditional cell towers and more on smaller but more dense deployments of antennae, supported by massive fiber-optic backbone networks, including those built in the last decade by cable providers such as Comcast.

Leading Wall Street analysts have expressed skepticism about the business case for 5G, noting the absence, at least so far, of the kind of killer apps that drove rapid consumer adoption of 3G and 4G networks — text messaging for the former and video and software apps for the latter. But 5G disruptors are coming, though they will be widely disbursed across industries as different as health care, entertainment, transportation, and manufacturing. 5G networks will likely play a major role in connected homes and cities as part of the Internet of Things, for example, and in coordinating communications between autonomous vehicles and with “smart” roads and other public infrastructure.

Those proposing the nationalization of 5G argued in part that a single network was necessary to ensure the security of these and other critical applications, and to protect U.S. networks from interference by non-U.S. providers.  It was also seen as a way to better compete with China, where equipment makers have so far taken the lead in securing patents for key 5G technologies. But it is unclear how a nationalized network would improve on the security practices of carriers who have been operating mobile networks for decades, or how consumers could be convinced to use a government run network that might be used as an instrument for increased surveillance.

There was also no indication, more to the point, of how the government would pay to build, operate, or maintain a network serving hundreds of millions of consumers and perhaps billions of connected devices. Initial estimates for 5G network deployment already run into the hundreds of billions of dollars.

Approaches to government intervention differ around the world — some are investing directly and indirectly in 5G technology. Like the U.S., for example, South Korea began offering limited 5G serviceearlier this month, with Japan, China, Turkey, and some European providers hoping to launch by 2020. In many cases, regulatory agencies are leading these efforts, working with former government-owned carriers now fully or partly privatized but still subject to close oversight of rates and service offerings.

That’s particularly true in China, whose most recent Five Year Plan identified 5G as a “strategic emerging industry.” The government controls all three of the country’s mobile operators, and is simply giving the carriers the radio spectrum they need.

Calls for a nationalized U.S. 5G network were motivated, at least in part, by concerns that private investors couldn’t compete with government-backed deployments elsewhere. But the administration was right to reject those calls, confident that competitive pressures between U.S. carriers and equipment providers will, once again, keep the U.S. in the lead.

In doing so, the White House underscored the success of bi-partisan policy that goes back to the 1990s, which leaves digital infrastructure largely to private sector development. In my view, the results speak for themselves. U.S. hardware and software companies lead lists of the world’s most valuable internet enterprises. And where U.S. operators have invested over $1.5 trillion over the last 20 years, according to trade group USTelecom, the increasingly regulated EU lags in broadband speeds, adoption, and investment.

Meanwhile, Congress has yet to advance legislation to rebuild the nation’s crumbling physical networks, including roads, bridges, electrical grids, public transportation, and water systems — an early promise from the Trump campaign. The needs of our non-digital systems are already overwhelming. The American Society of Civil Engineers’ most recent “report card” gives U.S. infrastructure an overall grade of D+, estimating that essential repairs and updates over the next ten years will cost more than $4.5 trillion.

So, if Washington really sees a connection between infrastructure, competitiveness, and national security, it should focus its attention and limited dollars on the physical networks. We need to encourage, not confuse, the investors who have built and repeatedly rebuilt the broadband ecosystem, and who already taking to lead in its next iteration.


Huawei calls on Washington to ‘halt illegal action’ against the company

29 May 2019 | Sherisse Pham | CNN Business

Shenzhen (CNN Business)Huawei is pressing on with its lawsuit against the United States, challenging the constitutionality of a US law banning federal agencies from buying its products.

 

The embattled Chinese tech firm said Wednesday that it wants Washington to “halt illegal action” against it, calling US restrictions on Huawei an attempt to put it out of business.
American politicians are “using the strength of an entire nation to come after a private company,” Song Liuping, Huawei’s chief legal officer, said in a press conference in Shenzhen.
The Trump administration has waged a global campaign against Huawei, banning US government agencies from doing business with it and urging countries around the world to remove its telecom equipment from their mobile networks. The White House cites national security concerns, saying Beijing could use Huawei equipment to spy on other countries. The company has repeatedly denied any of its products pose a national security risk.
Huawei filed a motion for summary judgment at a US district court in Texas on Tuesday, asking the court to overturn part of the National Defense Authorization Act. The tech company alleges that a portion of the law — which specifically forbids government agencies from using technology from Huawei and its smaller Chinese rival, ZTE (ZTCOF) — violates the US Constitution by singling out an individual or group for punishment without trial.
“The US government has provided no evidence to show that Huawei is a security threat. There is no gun, no smoke. Only speculation,” Song said.
Huawei first filed the lawsuit challenging part of the National Defense Authorization Act back in March.
But that was before the United States slapped it with an export ban, effectively barring US companies from doing business with Huawei. The US Commerce Department placed Huawei on a list of foreign firms deemed to undermine American national security or foreign policy interests earlier this month. Listed companies are barred from receiving components and software unless the trade is licensed.
The Huawei lawsuit would be “a pyrrhic victory at best” in the face of the new US restrictions, said Paul Triolo, who specializes in global technology policy at Eurasia Group.
The case “looks like the last gasp of the firm’s litigious approach to US actions, and if it is to survive … the firm will have to sue for lenient treatment from the Commerce Department,” said Triolo.
Huawei is the world’s largest telecommunications company and its smartphones compete with the likes of Apple (AAPL)and Samsung (SSNLF).
The US export ban forced suppliers like Google (GOOGL) and ARM Holdings to cut off ties with the Chinese company. Top carriers in the United Kingdom and Japan are also delaying the launch of Huawei smartphones.
Adding Huawei to the trade blacklist “sets a dangerous precedent,” Song said. “Today it’s telecoms and Huawei. Tomorrow it could be your industry, your company, your consumers,” he added.
Huawei says it has been stockpiling inventory and diversifying its supply chain for years, in anticipation of being cut off from US suppliers.
But experts say being unable to source US parts and components for too long would be crippling. Huawei is a leader in 5G technology, and the trade blacklist could also make it difficult to continue rolling out the ultra-fast wireless tech globally.
Song said being on the blacklist would hurt “more than 3 billion customers” of Huawei in over 170 countries, including in the United States where it still works with some rural operators.
“Connectivity is a basic human right, and the US government is putting their rights at risk,” he said.


28 May 2019 | Tripti Lahiri & Mary Hui | Quartz

Since it was founded by former People’s Liberation Army engineer Ren Zhengfei in 1987, Huawei has grown to become the world’s top provider of telecom equipment, with over $100 billion in revenue and 180,000 global employees. That extraordinary success has come with barely a footprint in the US market, where the company has been a target for anxiety about Chinese hacking since the 2000s. Today, Huawei is the poster child for that anxiety, and finds itself in the eye of a global storm.

Huawei’s troubles in the US started early: It was met with with suspicion not long after it started competing with US router firms in the aughts, and kept hitting snags after that. In 2003, networking firm Cisco accused Huawei of intellectual property theft. In 2008, a deal with 3Com collapsed over concerns about Huawei’s ties in China. In 2014, T-Mobile sued Huawei for stealing, among other technology, part of a robot’s arm.

But in 2017, US president Donald Trump took office, and since then actions against Huawei have come fast and furious. On May 15, Trump signed an executive order that effectively bans Huawei from accessing US supply chains, his strongest action yet against the company. Less than a week later, Google pulled Huawei’s Android license—after a grace period allowed by the Trump administration for current users, the  company’s future phones will be cut off from the most widely used operating system in the world and the Google universe. Suppliers from Britain, such as chip maker ARM, are set to follow Google’s lead.

Trump’s endgame is still unclear. Is the only safe Huawei a “dead” Huawei? Or is this another gambit in his ongoing trade negotiations with China? It may be too soon to tell: On May 23, Trump called Huawei “very dangerous” but also said the dispute might be resolved a trade deal.

What is clear is that this showdown has been a long time coming.

2001

Huawei, then a 14-year-old company with sales of $3 billion, sets up offices in the US (pdf). It also opens its first office in Britain.

2003

January: Router-maker Cisco sues Huawei for copyright violations, alleging its source code turned up in Huawei products. It later drops the suit.

November: Huawei’s joint venture with California-based networking company 3Com to make and sell routers and switches begins operations.

2005

The idea that Huawei is linked to the Chinese military surfaces prominently in a Rand Corporation report commissioned by the US Air Force. The think tank notes that major IT players like Huawei appear to be independent, private-sector actors (pdf, pages 217-8), but “many of these electronics companies are the public face for, sprang from, or are significantly engaged in joint research with state research institutes.” It adds:

Huawei maintains deep ties with the Chinese military, which serves a multi-faceted role as an important customer, as well as Huawei’s political patron and research and development partner.

The report also says sales linked to the Chinese military could be anywhere from less than 1% of Huawei’s revenues to as high at 6%. The lower estimate relies on a 2001 Far Eastern Economic Review story (pdf), and the higher one on personal interviews in Beijing. There is no citation for the description of the Chinese military as Huawei’s R&D partner.

2007

In July, the FBI interviews Huawei’s founder, Ren, in relation to potential violations of US trade sanctions on Iran.

2008

Huawei’s efforts to take a 16% stake in 3Com collapse amid lawmakers concerns (paywall) about Huawei’s possible ties to the PLA, forcing Huawei and its partner in the acquisition to abandon the bid. 3Com was a provider of anti-hacking software for the US military, among other contracts. Anxious lawmakers cited the 2005 Rand report.

2009

February: At Barcelona’s Mobile World Congress, Huawei releases its first Android smartphone, under license from Google.

October: Huawei hires an American, Matt Bross, from British Telecom to be its CTO, and to help it make a real foray into the US market. Bross apparently runs operations from his basement in St. Louis. “I am looking to create an environment where we can grow trust,” he tells Bloomberg in 2011. “The fact of the matter is that Huawei is here to stay.” (He leaves Huawei in 2012.)

November: Huawei signs a lease in Plano, Texas, for 100,000 square feet of office space for its North America sales and marketing headquarters. “We are honored that Huawei will grow and prosper in Plano for years to come,” the town’s mayor says in a statement.

2010

July: Phone-maker Motorola files a lawsuit accusing Huawei of corporate espionage, but later settles with the company.

November: Citing security concerns, Sprint excludes Huawei (paywall), as well as Chinese telecom ZTE, from bidding for a contract worth hundreds of millions of dollars to modernize its network. Huawei had been hoping this would be its first major US equipment contract win.

2011

February: The Committee on Foreign Investment in the United States tells Huawei to sell (paywall) the assets of bankrupt startup 3Leaf Systems, which it had acquired the previous year. Huawei says it didn’t flag the deal to CFIUS because it had only bought some of 3Leaf’s assets, but the panel decides to engage in a retroactive review.

The move prompts Huawei deputy chairman Ken Hu to write an open letter inviting the US to conduct an investigation in order to clear the “untrue rumors and allegations” about the company. The letter provides more detail about founder Ren and the company’s ties to the Chinese government.

…It is a matter of fact that Mr. Ren is just one of the many CEOs around the world who have served in the military, and … It is also factual to say that no one has ever offered any evidence that Huawei has been involved in any military technologies at any time.

…Like many other companies that operate in China, Huawei receives tax incentives provided by the Chinese government to high-tech enterprises and support for some of our research and development initiatives. This is similar to tax incentives offered by American government agencies to U.S. companies. In 2010, Huawei received a total of RMB 593 million (USD$89.75 million) of financial support from the Chinese government for our research and development activities. All of this is consistent with financial support that is provided to normal businesses in China and in many other countries, including the United States.

April: Huawei opens a 200,000-square-foot R&D facility in Silicon Valley. It continues to grow revenue from equipment sales to mid-tier telecoms in remote areas of the US.

2012

October: A House committee issues a 52-page report(pdf) warning against using equipment from Huawei and ZTE. While lawmakers didn’t find any wrongdoing, the report states:

In sum, the Committee finds that the companies failed to provide evidence that would satisfy any fair and full investigation. Although this alone does not prove wrongdoing, it factors into the Committee’s conclusions below. Further, this report contains a classified annex, which also adds to the Committee’s concerns about the risk to the United States. The investigation concludes that the risks associated with Huawei’s and ZTE’s provision of equipment to U.S. critical infrastructure could undermine core U.S. national-security interests.

REUTERS/YURI GRIPAS
Death knell.

2013

Reuters reports that a Hong Kong-based company that tried to sell US computer equipment to Iran’s largest cellphone carrier, in violation of US trade sanctions, is closely linked to Huawei. The story says that Ren Zhengfei’s daughter Meng Wanzhou, “a rising star” at Huawei, served on the board of the Hong Kong firm, among other links.

2014

March: The US is revealed to be spying on Huawei, according to documents leaked by former National Security Agency contractor Edward Snowden. The New York Times reports (paywall) that the NSA infiltrated the servers in Huawei’s Shenzhen headquarters, obtaining sensitive information about its giant routers and complex digital switches, and monitoring the communications of top executives.

September: T-Mobile files a lawsuit against Huawei, accusing it of stealing technology, including part of a robot’s arm, from its headquarters. The suit alleges that Huawei workers spied on and stole part of Tappy, a robot developed by T-Mobile in 2006 to test smartphones. Huawei admits that two of its employees had acted inappropriately and says it has dismissed them.

2015

January: Speaking at the World Economic Forum in Davos, Switzerland, in a rare high-profile appearance, Huawei founder Ren dismisses US claims that his company spies on behalf of the Chinese government. He also seeks to play down his connection with the Chinese army, saying it was “quite by chance” that he entered the military. “We are a Chinese company,” Ren says. “Of course we support the Chinese Communist Party and love our country. But we don’t compromise the interest of other countries. We comply with the laws of every country we operate in.”

September: Huawei and Google join forces (paywall) to make the Nexus 6p phone.

REUTERS/RICK WILKING
Huawei executive Richard Yu at CES in 2018.

2016

June: The US Commerce department issues a subpoena(paywall) to Huawei as part of a probe into whether the company violated US export controls on the export or re-export of American technology to Cuba, North Korea, Syria, and Sudan over the previous five years.

December: The Treasury department gets involved with the investigation (paywall) and issues its own subpoena. The subpoena comes shortly after the US government restricts sales of American technology to ZTE, saying the Chinese phone-maker violated sanctions against Iran. US officials also release internal ZTE documents detailing how the company managed to do business with Iran, and how it modeled its approach off of a rival’s efforts in that country. The rival company is not named in the documents, but its description matches Huawei (paywall).

2017

A Seattle jury rules in favor of T-Mobile in its case against Huawei, determining that the latter misappropriated T-Mobile’s trade secrets, and breached a handset-supply contract between the two companies that stipulated each would protect secrets learned through their partnership. The jury awards T-Mobile $4.8 million in damages for the breach of contract, but does not award damages for T-Mobile’s trade-secrets claim.

2018

January: AT&T, America’s second-largest wireless carrier, is reportedly on the verge of becoming the first carrier in the US to offer Huawei’s handsets, which would be a major breakthrough. But it abandons the plan after lawmakers and federal regulators lobby against the idea. Concerns around Huawei deepen as the rollout of next-generation wireless technology approaches; a leaked White House memo on 5G names the company a strategic threat. Some lawmakers want AT&T to cut all commercial ties with Huawei, ending their collaboration on 5G network standards.

April: Huawei lets go of several US staff (paywall), including its vice president of external affairs, William Plummer, a Nokia veteran who joined Huawei in 2010. Plummer goes on to detail the company’s (and some of his own) PR missteps in a memoir called Huidu.

May: The Pentagon bans the sale of Huawei and ZTE phones in stores on military bases over concerns that the Chinese government could order the companies to track soldiers’ movements or spy on their communications.

August: The National Defense Authorization Act, which includes language barring government agenciesfrom buying equipment or services from Huawei and ZTE, goes into effect.

October: Two leading US lawmakers—Mark Warner, a Virginia Democrat, and Marco Rubio, a Florida Republican—urge Canadian prime minister Justin Trudeau to bar Huawei from helping build its 5G networks, saying it could pose dangers for US networks. The call is part of a broader US effort to get foreign allies to shun Huawei, the Wall Street Journal later reports (paywall), warning the UK, for example, it could be forced to cut off intelligence sharing. In November, New Zealand bans Huawei from supplying technology to the country’s 5G rollout, following in the steps of Australia earlier in the year.

December: Huawei’s chief financial officer and the daughter of its founder, Meng Wanzhou, is arrested in Canada at the request of US law enforcement on suspicion of violating trade sanctions on Iran. The arrest is seen as a serious escalation of US action against Huawei. Trump is criticized for suggesting he could intervene in the Justice Department case against her if it would help secure a trade deal from China. Huawei holds a lengthy press conference for foreign reporters at its headquarters to again dispute allegations that it poses a security threat.

2019

January: The US files criminal charges against Huawei, slamming it with two dozen allegations that include conspiring to evade US trade sanctions and steal trade secrets, and also formally seeks Meng’s extradition from Canada. Meanwhile, Poland arrests a Huawei employee on allegations of spying for China. Founder Ren gives a rare press conference and several TV interviews.

March: Raising the stakes, Huawei sues the US over a law passed in 2018 that restricts federal agencies from using Huawei’s goods. It calls the ban unlawful and says the US has provided no evidence to support it.

May 15: Trump signs an executive order banning US telecommunications firms from using the equipment of “foreign adversaries.” The order does not name Huawei, but effectively blacklists the company and cuts it off from US supply chains. Days later, Google makes a shock announcement that it will terminate Huawei’s license to the Android OS, which powers 86% of the world’s phones and all of the phones sold by Huawei. Huawei says it’s developing its own OS,  but being cut off from Google’s email and app universe would drastically reduce its appeal overseas. Already, mobile carriers are holding off on Huawei 5G phone sales(paywall).

May 20: The restrictions are temporarily eased: The Commerce Department says it will allow Huawei to buy US goods through Aug. 19. But that same day, top US chip companies including Intel and Qualcomm cut off vital Huawei supplies, while Microsoft is also said to have stopped taking software orders from the firm.

This month’s moves present the most serious threats yet to Huawei’s future.

 

Original Link: How Huawei became America’s tech enemy No. 1

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