5G: COVID Gives US A 2nd Chance Vs. Huawei

WASHINGTON: Britain’s decision to ban Huawei from its 5G network marks a potential tipping point in the global battle over 5G, say the authors of a new study from the Center for a New American Security. But the US needs to seize the moment and offer an alternative to the Chinese giant, not just warn countries against security threats from Beijing, say CNAS co-authors Martijn Rasser and Ainikki Riikonen, both veterans of the Pentagon.

America can’t create a corporate “national champion” to compete with Huawei head to head, they say, but it doesn’t need to. The US can undercut Huawei’s emerging monopoly by advancing open, modular standards that let networks plug-and-play 5G equipment from any manufacturer, from any nation, and still have it work as a single compatible system.

“One of the big advantages of promoting open architecture as the best way forward for 5G is that it’s a proactive and affirmative approach to the 5G dilemma, as opposed to the Trump administration’s emphasis on shutting out Huawei,” Rasser and Riikonen wrote me in an email after I asked about their study. “This approach does not push American vendors as a replacement to vendors from China. Rather, it would encourage innovation and new entrants to the market. Europe in particular would benefit because this alternative approach to 5G could be a boon for its fledgling tech sector.”

COVID-19 and China’s own missteps have given the US another chance on 5G. The global recession has hammered budgets and slowed 5G rollouts around the world, so countries and companies are no longer under as much pressure to pick a cheap and easy option that’s available right now, which usually means Huawei. And Chinese assertiveness, even aggression, against its neighbors from India to Vietnam to Japan has made nations leery of buying Chinese firmware, riddled as it is with backdoors that Chinese spy agencies may know intimately.

In particular, the UK’s reversal on Huawei – which it had previously been willing to allow in parts of its 5G network – is a telling victory, likely to be replicated in other countries. But the warn-and-exhort strategy that got the US this far is not enough.

“The UK decision is indicative of a broader shift away from China,” Rasser and Riikonen said. “France is following suit with a de facto ban. This will put greater pressure on Germany and Canada, the two major allies yet to announce a decision, to also move toward excluding Huawei.”

“While that’s good news, it doesn’t resolve the broader problem that 5G supply chains are very limited,” they went on. “Wireless infrastructure based on open interfaces should result in greater vendor diversity where software companies from around the world can participate.”

Today, 5G equipment from different vendors often follows different technical standards and is not compatible, so it’s much easier to buy everything your network needs from one company. Three Western companies – Nokia in Finland, Ericsson in Sweden, and Samsung in South Korea – can largely fill that bill, but Huawei is much bigger and enjoys billions in subsidies, allowing it to underbid its rivals.

But what if a telecommunications company could buy 5G equipment wherever it liked – a router from this company, a base station from this one, network management software from a third – and have it all work together? To do that, you need all the different companies to agree how all their different components connect to each other. Each company can still offer its proprietary tech, but the “interfaces” between two different devices must be standardized. This philosophy, called modular open architecture, is increasingly popular in other areas of IT and even defense procurement.

5G is another area ripe for open architecture, Rasser and Riikonen told me. “The appeal of a modular approach is that the technology is proven and that there is broad interest among telecommunication operators and tech companies internationally in it,” they said. “What’s missing is clear signals that this is the direction the industry is headed. That’s why Nokia and Ericsson in particular are hesitant to invest time and resources.”

The US government could do a lot to advance open standards – an area where China has recently stolen a lead. That would undercut Huawei’s position, without investing the vast amounts required to subsidize a national champion to fight the Chinese giant head-on.

“Heavy-handed industrial policy, such as ‘picking a winner’, is not necessary,” Rasser and Riikonen said. “What is needed is signaling from national level governments to nudge the industry toward widespread adoption and deployment.”

You can read the full report, Open Future: The Way Forward On 5G, at the CNAS website.