Control room of Internet provider in Iran 311 (R).
(photo credit: Caren Firouz / Reuters)
If the Bloomberg article that Allot Communications Ltd. sold communications
equipment to Iran had not included such serious allegations, everyone who knew
the Israeli company would have burst out laughing. Allot? Involved in espionage?
Maybe this is just a clever spin designed to achieve greater media exposure for
Last Friday, Bloomberg claimed that Allot had indirectly sold
its Internet-monitoring solutions to Iran. The article claimed that the
company’s equipment was exported to Denmark, where it was transferred to a
contact person, who changed the name of the product and sold it to
In response, Allot said: “Beyond contractual measures, there is no
electronic way for Allot to locate or disable its products after shipment,
unless the end-user proactively initiates a connection. Each distributor
is generally assigned with a specific territory and is authorized to market
Allot’s products only within that territory... Allot’s products are not
defense items and are designed and intended for the civil market.”
supplies technology to identify and track Internet content, capabilities that
are probably also used for less salubrious activity when put in the wrong hands.
The segment that the company operates in is called Deep Packet Inspection (DPI),
which monitors content transmitted online. Allot’s technology can monitor
thousands of applications. It can identify content transmitted through routers,
such as a status changes on Facebook, YouTube video clips, conversations on
Skype and regular e-mail messages.
On the face of it, the Allot equipment
that reached Iran does not necessarily mean that the company is involved in
trade with an enemy and espionage. Over the years, there have been a few similar
reports of other companies involving DPI technology. But Allot is passively
involved in this situation, and conspiracy theorists might be able to find a
direct link between specific US legislation and the Bloomberg
This is a long discussion that revolves around the issue of net
neutrality. If this is violated, then access providers should be able to charge
more for using applications that require wide bandwidth, such as watching a
movie or video chats through the Internet. This is already taking place in
Europe, which helped telephony giants like Vodafone become major Allot
One of Allot’s potential growth engines is possible net
neutrality legislation in the US, despite the a broad coalition of opponents
against it. They maintain that monitoring content through the use of this
technology, as requested by the customer, is an invasion of privacy and contrary
to the liberal spirit upon which the Internet was created in the
While allegations of Allot’s indirect aid to the ayatollah’s
regime in Iran caused investors in Allot to sell shares, causing a drop in share
price of more than 5 percent the day after the report, charges with a much
heavier potential weight – of alleged aid to greedy telecommunications giants –
are not bothering these investors at all. On the contrary; they have only
strengthened the share price, helping push Allot’s rapid climb toward a market
cap of $500 million.
Has the time come for Allot’s shareholders to
recognize the significance deriving from their investment? After all, a US
humanrights organization is liable to point to the company as an abettor to the
invasion of privacy of Americans and demand investigations and punishments,
accordingly. What will the shareholders do then?
In other words, anyone who is
not deterred by the heated debate about possible invasion of privacy should not
be surprised if they get burned by the accusations of harm caused to Internet
users in the Middle East. In both cases, Allot’s image could be questioned and
damaged. In both case, the issue of Allot’s image should be included in the risk
that the investors assume.