Firms that export sensitive technology to the country would not be allowed to bid on or renew U.S. contracts, unless they halt Iranian exports.
Two senators plan to introduce a bill that would bar foreign companies that sell technology to Iran from receiving federal contracts.
Sens. Charles E. Schumer, D-N.Y., and Lindsey Graham, R-S.C., said they wrote up the legislation after the Wall Street Journal reported on June 22 that a joint venture of Nokia Corp. of Finland and Siemens AG of Germany had sold a sophisticated Internet-monitoring system to Iran in 2008.
Schumer and Graham's bill would require the Obama administration to identify foreign companies that export sensitive technology to Iran and ban them from bidding on federal contracts, or renew expiring ones, unless they first stop exports to Iran.
Since the disputed Iranian election on June 12, dissidents and protesters have used the Internet, social networks and cell phones to spread their message within the country and globally. The Iranian government, according to news reports, cut much of the country's Internet access and blocked text messaging.
Iran's ability to manage the Internet comes from equipment provided by the Nokia Siemens Networks joint venture, which the WSJ reported is "one of the world's most sophisticated mechanisms for controlling and censoring the Internet." The equipment provided by Nokia Siemens also allowed Iran to perform deep-packet inspection to analyze and inspect Internet traffic, the Journal said.
Nokia Siemens said in a statement that the equipment it provided to Telecommunications Co. of Iran, the country's fixed and mobile network operator, is designed only to conduct lawful intercept of traffic by law enforcement organizations.
Nokia Siemens said Iran uses the equipment only to monitor phone calls on the country's fixed and mobile networks. Ben Room, a Nokia Siemens spokesman, wrote in a blog post on June 22 that the United States and European Union countries require lawful intercept capability on mobile networks.
"The restricted functionality monitoring center provided by Nokia Siemens Networks in Iran cannot provide data monitoring, Internet monitoring, deep-packet inspection, international call monitoring or speech recognition," Room wrote. "Therefore, contrary to speculation in the media, the technology supplied by Nokia Siemens Networks cannot be used for the monitoring or censorship of Internet traffic."
Graham added: "The Internet has proven to be one of the strongest weapons in the hands of the Iranian people seeking freedom and trying to chart a new destiny for their country. Companies that provide technology to the Iranian regime to control the Internet must be forced to pay a heavy price."
Schumer said Siemens has nearly 2,000 contracts with the federal government, including 300 contracts with the Pentagon and other deals with the Homeland Security, Justice and Energy departments. Federal contracts awarded to Siemens in 2009 totaled $250 million.
Nokia landed more than $10 million in federal business from 2000 to 2008, and Nokia Siemens Networks holds contracts worth more than $5 million, Schumer said.