US influence on Europe failing as France resists Huawei ban

The White House might have felt banning Huawei was an appropriate measure for national security, but France does not agree with the drastic action.

Speaking at a conference in Paris, French President Emmanuel Macron has confirmed the country will not ban Huawei. This is not to say it won’t in the future, but it appears Europe is remaining resolute against the demands of the US. The burden of proof might be a concept easily ignored in the US, but Europe stands for more.

“Our perspective is not to block Huawei or any company,” Macron said. “France and Europe are pragmatic and realistic. We do believe in cooperation and multilateralism. At the same time, we are extremely careful about access to good technology and to preserve our national security and all the safety rules.”

President Donald Trump is most likely a man who is used to getting his own way, and upon assuming office as head of the most powerful government worldwide, he might have thought this position of privilege would continue. However, Europe is being anything but compliant.

In direct contradiction to the Executive Order banning Huawei from supplying any components, products and services to US communications networks, Macron has declared France open is for business. France won’t use the excuse of national security to beat back the progress of China but will presumably introduce mechanisms to mitigate risk.

Germany has taken this approach, increasing the barrier to entry for all companies, not just Huawei. Vendors will have to pass more stringent security tests before any components or products can be introduced to networks, though Chancellor Angela Merkel has also made it clear she intents to steer clear of political ties to the decision.

“There are two things I don’t believe in,” Merkel said in March. “First, to discuss these very sensitive security questions publicly, and second, to exclude a company simply because it’s from a certain country.”

The UK is seemingly heading down a similar route. Alongside the Huawei Cyber Security Evaluation Centre (HCSEC), run by GCHQ with the objective of ensuring security and privacy credentials are maintained, the long-awaited supply chain review is reportedly going to place higher scrutiny but stop short of any sort of ban. The official position will be revealed in a few weeks, but this position would be consistent with the UK political rhetoric.

Over in Eastern Europe, governments also appear to be resisting calls to ban the company, while Italy seems to be taking the risk mitigation approach. Even at the highest bureaucratic level, the European Commission has asked member states to conduct an assessment for security assessments. Unless some drastic opinions come back in October, we suspect the official position of the European Union will be to create higher security mechanisms which offer competitive opportunity for all vendors in the market.

For the moment at least, it appears the Europeans are immune to the huffing and puffing making its way across the Atlantic. That said, the trade war with China is set to escalate once again and it would be fair to assume more US delegations will be attempting to whisper in the ears of influential Europeans. At some point, the US will get tougher on Europe, but it does appear those pesky Europeans are stubborn enough to resist White House propaganda and pressure.

Don’t ignore Huawei’s ban on buying US components

While everyone is focusing on the ban on selling in the US, the ban on buying US components is a much more interesting chapter of the Huawei saga.

President Donald Trump has dropped the economic dirty bomb on China and it’s dominating the headlines. Although Huawei, or China, are not mentioned in the text, the Executive Order is clearly a move to stall progress made in the telco arena. China is mounting a challenge to the US dominance in the TMT arena, and this should be viewed as a move to combat that.

There are clearly other reasons for the order, but this should not be ignored. The security argument, albeit an accusation thrown without the burden of concrete evidence, is a factor, but never forget about the capitalist dream which underpins US society.

However, although most are focusing on Huawei’s inability to sell components, products and services in the US market, there might be an argument the ban on purchasing US components, products and services is more important, impactful and influential.

“This action by the Commerce Department’s Bureau of Industry and Security, with the support of the President of the United States, places Huawei, a Chinese owned company that is the largest telecommunications equipment producer in the world, on the Entity List,” said Secretary of Commerce Wilbur Ross. “This will prevent American technology from being used by foreign owned entities in ways that potentially undermine US national security or foreign policy interests.”

While we will focus on the ban on purchasing US components, products and services for this article, it is worth noting the ban on Huawei selling in the US will have an impact.

Rural telcos in the US have mostly been against any ban on Chinese companies. In October 2018, Huawei made a filing with the FCC arguing its support for rural telcos is underpinning the fight against the digital divide and a ban would be disastrous for those subscribers. Michael Beehn, CEO of MobileNation, was one of those who argued against the ban, suggesting the cost-effectiveness of Huawei allowed his firm to operate. Without the advantage of nationwide scale, these organizations will always struggle when the price of networks is forced north.

While the US is a massive market, with huge opportunities to maximise profits, not being able to sell in the US is not going to have a significant impact on Huawei. Its customers are the rural telcos not the national ones. Huawei has not managed to secure any major contracts with the big four, therefore it is missing out on something which it never had. Huawei has still managed to grow sales to $105 billion without the US, therefore we believe this ban is not going to be a gamechanger.

However, it is the ban on purchasing US components, products and services which we want to focus on here.

Huawei is not outrightly banned from using US technologies and services, however, those companies who wish to work with the dominant telco vendor will have to seek permission to do so beforehand. The US can now effectively how strategically it wants to twist the knife already dug deep into Huawei’s metaphorical chest.

Although we’re not too sure how this will play out, Huawei’s business could be severely dented by this move.

Huawei recognises 92 companies around the world as core suppliers to the business. It will have thousands of suppliers for various parts of the business, but these 92 are considered the most important to the success of operations. And 33 of them are US companies.

Some are small, some are niche, some are more generic, and some are technology giants. The likes of Qualcomm, Intel and Broadcom all have interests in keeping the US/Chinese relationship sweet, though more niche companies like Skyworks Solutions, Lumentum and Qorvo have much more skin in the game. Firms like NeoPhotonics, who are reliant on Huawei for 46% of its revenues, might well struggle to survive.

Huawei will be able to survive this move, it has been preparing for such an outcome, but you have to wonder what impact it will have on its products and credibility.

HiSilicon, the Huawei-owned semiconductor business, has been ramping up its capabilities to move more of its chip supply chain in-house, while the firm has reportedly been improving the geographical diversity of its international supply chain. According to the South China Morning Post, not only has Huawei been moving more operations in-house, it has also been stockpiling US components in the event of the procurement doomsday event.

A similar ban on procuring US components, products and services was placed on ZTE last year and it almost crippled the firm. Operations were forced to a standstill due to the reliance on US technology. Huawei has never been as dependent on the US, though it seems the lessons were learned from this incident.

The big question is what impact a ban would have on the quality of its products.

Huawei might preach the promise of its own technology and the new suppliers it will seek/has sought, but there is a reason these 33 US companies were chosen in the first place. Either there is/was a financial benefit to Huawei in these relationships, or they were chosen because they were best in class.

Huawei is a commercial organization after all, it wants to make the best products for the best price. There will certainly have been compromises make during these selections, either paying more for better or sacrificing some quality for commercial benefits, and having to make changes will have an impact. Huawei, and its customers, will have fingers and toes crossed there is no material impact on the business.

The other aspect to consider is disruption to operations. ZTE found out how detrimental dependence on a single country can be, and while Huawei has mitigated some of this impact, it remains to be seen how much pain could be felt should the ban be fully enforced. Might it mean Huawei is unable to scale operations in-line with customer deployment ambitions? Could competitors benefit through these limitations? We don’t know for the moment.

The ban on selling in the US might sound better when reeling off headlines, but don’t forget about Huawei’s supply chain. We think there is much more of a risk here.

Politicising cybersecurity hurts everyone – Huawei CEO

As it is becoming increasingly difficult to discuss Huawei without mentioning security concerns, Rotating Chairman Ken Hu has joined the masses.

Speaking at the Huawei Analyst Summit, Hu confronted the issue head-on. “If an issue is politicised, the discussion will be moved away from facts and onto feelings,” said Hu.

“This kind of approach risks putting technology into a fragmented discussion. The fragmentation of technology will impede innovation and increase costs. This will be a burden for all of society. This will not just be a challenge for Huawei, but the entire of industry and society.”

While it might sound like a PR plug in the battle to combat US political aggression, Hu is talking sense. Political rhetoric has a way of whipping the masses into a frenzy and all of a sudden, you’ve forgotten the foundational point of the debate. Just look at the mess Brexit evolved into over the last five years.

For Hu, the message this week is relatively simple; look at the facts, look at the technology and look at the consequence of rash actions. This point has been accompanied by an admission Huawei needs to do better when it comes to security and software, but many will argue this should be an industry wide position.

This is the danger that Huawei currently faces. The carrier business group took a hit over 2018 with revenues declining by 1.3%. This is perhaps best attributed to the dilly-dalliance of European telcos in moving ahead with 5G, the prospect of spending money with a company which may potentially get banned is a dangerous one, but progress is being made. However, the climate of uncertainty is impacted the confidence of telcos to invest.

Huawei has suggested to Telecoms.com it has now shipped more than 64,000 5G radios worldwide, therefore there must be customers somewhere. How many of these shipments have been made outside of China remains unknown, but revenue is revenue.

In fact, David Wang, Chief Strategy Marketing Officer at Huawei, suggests the carrier business group will enter back into double-digit growth over the course of 2019. But where is this revenue coming from?

First of all, 5G. Huawei might be banned from a few major markets around the world, but it isn’t banned from all of them. The UK is an example. Deployment might be slower in the UK than in Japan or the US, but progress is being made and Huawei continues to be an important partner to UK telcos.

Secondly, let’s not forget about 4G. With VoLTE still continuing to be an important factor of almost every network the telcos will have to continue to push geographical coverage. This network extension will continue to bolster Huawei bank accounts, such is the dominant position it has crafted in the 4G market.

The final area which Wang mentioned is 5G preparation. Some countries might still be in the trial stages of 5G, but they are certainly readying their networks. One facet of this is increasing the capacity of mobile backhaul, and fortunately for Huawei, it is one of the global leaders in the transmission game.

Security might be an on-going issue for Huawei, but it is by no-means killing the ambitions of the business. The risk is whether this discussion continues to swirl around the political domain, and it remains to be seen whether Huawei can shift the security question back to a technology basis. The recent decision from Germany suggests there is hope, and Huawei will be hoping more countries base decision making on risk mitigation principles, not political influence.

Politics is broken, and the net neutrality conflict proves it

The sceptics and cynics might be right; politics is nothing but pageantry and theatre with the idea of serving the greater good dying with the invention of teeth whitening services.

Yesterday saw the House of Representatives, of which the Democrats have a majority, pass the pompously named ‘Save the Internet’ bill by 232-190 votes. This bill proposes the re-introduction of net neutrality rules, undermining and unravelling the equally pompously named ‘Restoring Internet Freedoms’ Order introduced in June last year.

For the Democrats, this vote will be chalked up as a victory, but ultimately it is a sign politics is broken and the General Public is getting screwed by self-righteous and self-serving politicians.

“The House’s vote to re-instate net neutrality reflects the will of millions of Americans who made their voices heard that they don’t want their costs of using the Internet to go up unfairly, they do not want their freedom to be constricted, and that if they should decide to start up a business, they deserve to be on an equal playing field with their larger competitors,” said Senate Minority Leader Chuck Schumer.

The passing of this bill is nothing more than a symbolic gesture. It is a metaphoric ‘F*ck you’ to the Trump administration and the Republican party. But it achieves very little. Republican Majority Leader of the Senate Mitch McConnell has already stated the bill is “dead on arrival” when it hits the floor of the Senate, and even in the unlikely scenario it does pass, the White House has already promised a Presidential Veto, what would be the second during Trump’s tenure.

The Democrats already knew this bill would fail to pass one of the legislative hurdles, or if they didn’t they should have their heads examined but maintained course. It might be considered an act of defiance, but in reality, it simply clogs up the legislative machine, ensuring no progress is made to better the lives of everyday US citizens.

If the Democrats cared about protecting and enhancing the lives of US citizens, actions would have been taken to offer more of an opportunity for the bill to pass. Not only would this be progress, it would also not deny another worthy bill time for debate. As it stands, there is not much more than a net loss for the US citizens.

Such is the partisan state of politics in the US, the idea of concessions is preposterous. The objective is no-longer to improve the lives of US citizens through innovative and considered legislative action, but to entertain and rouse.

Even the names of the bills are geared towards theatre. The ‘Save the Internet’ bill or ‘Restoring Internet Freedoms’ Order should make any reasonable individual cringe, such is the transparent nature of the propaganda, but it makes a great sound bite when preaching to the converted at political rallies.

Another bill further undermines the futility and self-serving nature of the Democrat quest.

The ‘Open Internet Preservation’ Act is a Republican piece of legislation, first proposed by Tennessee Senator Marsha Blackburn, which appears to be a middle-ground between the two parties. Blackburn is a slightly unusual Republican politician, having supported many net neutrality rules in the past, and the ‘Open Internet Preservation’ Act represents that. However, the ‘Open Internet Preservation’ Act is struggling to gain support in the Democrat controlled House of Representatives.

The Act effectively works in two ways. Firstly, it prevents the telcos from blocking lawful content, applications and internet traffic, and also stops them from degrading the performance of any services. However, it does allow the telcos to offer premium transmission services to customers, effectively creating a virtual toll road. Those who want to improve customer experience can pay to have their traffic sped up.

This is by no-means a perfect piece of legislation, several other abuses of net neutrality concepts are still possible, though it does venture more towards the middle-ground which is the healthiest position. As it stands, the Democrats heavy-handed regulation is too far one direction, while the Republican ideal of a wild-west internet is too far the other. A middle-ground is needed.

This Act does prevent the telcos from penalising enterprise customers, effectively holding them to ransom through slower speeds, but allows them to offer premium services. Telcos are commercial organizations who have spent billions deploying faster networks and should be afforded the opportunity to monetize their investments. The current status quo, with the OTTs getting somewhat of a free-ride, creates an unbalanced equation which should not be allowed to continue. Biting the hand that feeds you is only sustainable for a short period of time.

The Democrats argue that this bill rewards the rich, Netflix for example, and prevents any start-ups from mounting a challenge. These start-ups would never be able to afford the virtual toll road, therefore would not be fighting Netflix on an even playing field, as the streaming giant can pay for better customer experience. There is some credibility to this argument, but others would suggest this is also market dynamics of a capitalist economy. Critics will argue, however many of these individuals are in comfortable positions because the US is a capitalist society.

In theory, the telcos could create a mediocre service and a premium one, with the former being sub-standard enough to force customers into paying for the virtual toll road. This could be the fear from some Democrats, and one of the areas the ‘Open Internet Preservation’ Act falls short.

Perhaps this is where more regulation is needed, as it is an omission from the ‘Open Internet Preservation’ Act. Introducing rules which limit the virtual toll roads to a 25% premium on the standard service would be a happy middle-ground, allowing the telcos to create value added services, but theoretically protecting the market from abuses.

When arguing the benefits of the ‘Save the Internet’ bill, the Democrats seem to have forgotten to mention a number of the bill’s features are already written into the ‘Open Internet Preservation’ Act. Republicans want to protect consumers from traffic throttling and blocking, but this position does not fit nicely into the Democrat rhetoric which has been built around the idea that the Republicans light-touch regulatory environment is designed to screw Joe Bloggs.

The majority of the argument is based around the definition of the telcos, but this is not a debate which interests the consumer therefore needs to be ‘sexed up’. The Democrats want a Title II designation, a common carrier or utility, where as the Republicans want Title I, a communications service and therefore shielded from more stringent regulation. This is the crux of the net neutrality argument.

When you break the argument down, have a look at what protections are already being afforded to US citizens, strip away the political propaganda and emotional baggage, this debate seems to be more about defying the Republican stance than achieving anything beneficial for the consumer.

What is wrong with the middle-ground? It would certainly be representative of the majority of attitudes across the US, but it is hardly going to attract PR inches and photoshoot opportunities for those pearly whites. Politics is broken and there’s nothing the sensible or reasonable can do about it.

Trump starts huffing and puffing with net neutrality veto threat

President Donald Trump is once again threatening as veto should Congress pass the ‘Save the Internet’ Act to reinstate net neutrality rules across the US.

Having largely unwound the net neutrality regulation during the first year of the Trump administration, Congress is one track to continue the seesaw ride which has been net neutrality. In a statement released by the Executive Office of Management and Budget, the White House has promised a veto, quoting statistics and trends which have nothing to do with the ‘Restoring Internet Freedom’ Act, which it is trying to protect.

The ‘Save the Internet’ Act, introduced by a horde of Democrats led by Representative Anna Eshoo, would effectively undermine the ‘Restoring Internet Freedom’ Act and reinstate net neutrality rules. A vote was supposed to take place on April 9, though this has been delayed thanks to a number of amendments. The vote may well happen this afternoon, April 10.

“Last year, the FCC returned to the light-touch regulatory scheme that enabled the internet to develop and thrive for nearly two decades by promoting internet freedom and encouraging network investment,” the statement reads.

“Since the new rule was adopted in 2018, consumers have benefited from a greater than 35 percent increase in average, fixed broadband download speeds, and the United States rose to sixth, from thirteenth, in the world for those speeds. In 2018, fiber was also made available to more new homes than in any previous year, and capital investment by the Nation’s top six Internet service providers increased by $2.3 billion.”

Let’s break this down claim by claim, starting with the broadband speeds.

The statement is of course correct, broadband speeds have been increasing but this has nothing to do with repealing net neutrality laws. The White House seems to be using an Ookla report from December which uses data from Q2 and Q3 2018. Broadband speeds did increase year-on-year, though the repeal of net neutrality rules only occurred in June, mid-way through this period suggesting broadband speeds were already on the up.

Removing net neutrality rules was not like flicking a switch to make the internet faster. According to the Republicans, it was supposed to more freely enable investment in the network, something which would take months, if not years, to realise the benefits of. Linking these speeds to any success of the repeal is at best incompetent or at worst, directly misleading.

On the fibre side, the statement claims that fibre deployments are on the increase though this again might have nothing to do with the net neutrality repeal. Firstly, as part of the Time Warner transaction AT&T was forced through regulation (ironic) to deploy more fibre broadband. Secondly, fibre deployments were gradually increasing and the increase in the US is in-line with overarching trends. It’s not necessarily a new development which should be attributed to any form of external influence or catalyst.

The threat of a veto is never far away, but so far it has proved to be nothing more than hot air from the inflated President. Despite having threatened vetoes for infrastructure, immigration and security bills which have not taken his fancy, the President has only used the power of veto once since his appointment. This might change now a Democrat Congress will be pushing through bills which he won’t like however.

While the power of the veto is something which can be viewed as undemocratic, it is not uncommon. Barack Obama used the veto 12 times during his tenure, as did George Bush before him. Bill Clinton bagged 37 vetoes between 1993-2001, while George Bush Senior managed 44 in his four-year presidency.

Amazingly, these all pale in comparison to the leader of the veto. Grover Cleveland, the only US President to serve non-consecutive terms (1885-89 and 1893-97), used the right to veto an incredibly 584 times, while seven more were over-ridden by the sitting politicians.

Although the ‘Save the Internet’ Act does look doomed to failure, perhaps that is not necessarily as important as it would seem. The bill would still have to pass through the Republican controlled Senate, which would have been incredibly unlikely, though it gives a measure of support.

Before too long, the lawsuits from the 23 Attorney Generals supporting net neutrality across the country will start to be considered, and there is the small matter of the 2020 election. Trying to decide which way the next Presidential election will head is a futile task, though a Democrat heading back into the White House is not unforeseeable.

Should the Republicans lose the election, FCC Chairman Ajit Pai would step down from his position, as is customary, and a Democrat Chairman would be installed. This would effectively tip the balance of voting power back towards the Democrats in the FCC (3-2), allowing rules such as net neutrality to make a return.

Despite all the efforts to kill net neutrality, the concept is still hanging on. It might not have a home in the rulebook any more, but Pai is finding it difficult to block any legislative paths to return the rules. The ‘Save the Internet’ Act will most likely fail, either being shot down by the Senate or vetoed by Trump, but it demonstrates the intentions of a Democrat administration.

US mulls bill for minimum IoT security requirements

A cross-party delegation of US politicians have introduced a bill which will aim to create minimum security standards for any IoT devices used by government agencies and departments.

Led by Democratic Congresswoman Robin Kelly and Republican Congressman Will Hurd, the bill has gained notable support already. While this is a perfectly logical step forward to ensure the integrity and resilience of government systems, the fact the politicians seem to be taking an impartial approach, not targeting a single company or country, is much more encouraging.

“As the government continues to purchase and use more and more internet-connected devices, we must ensure that these devices are secure,” said Kelly. “Everything from our national security to the personal information of American citizens could be vulnerable because of security holes in these devices. It’s estimated that by 2020 there will be 30 million internet-connected devices in use. As these devices positively revolutionize communication, we cannot allow them to become a backdoor to hackers or tools for cyberattacks.”

“Internet of Things devices will improve and enhance nearly every aspect of our society, economy and our day-to-day lives,” said Hurd “This is ground-breaking work and IoT devices must be built with security in mind, not as an afterthought. This bipartisan legislation will make Internet of Things devices more secure and help prevent future attacks on critical technology infrastructure.”

When discussing digital security, a mention of Huawei or China is never far away, but this seems to be an effort to mitigate risk on a much grander scale. Yes, the US does have ideological enemies it should be wary of, but it is critical politicians realise there are risks everywhere throughout the digital ecosystem.

It is easy to point the finger at China and the Chinese government when discussing cybersecurity threats, though this is lazy and dangerous. Having too much of a narrow focus on one area only increases the risk of exposure elsewhere. Such are the complexities of today’s supply chain, with companies and components spanning different geographies and sizes, the risk of vulnerability is everywhere. It is also very important to realise cybercriminals can be anywhere; when there is an opportunity to make money, some will not care who they are targeting. Domestic cybercriminals can be just as much of a threat as international ones.

This impartial approach, applying security standards to IOT devices regardless of origin, is a much more sensible approach to ensure the integrity of networks and safeguard sensitive data.

Of course, this is not necessarily a new idea. Many security experts around the world have been calling for a standardised approach to IOT security, suggesting certification processes with minimum standards. Such a concept has already been shown to work with other products, such as batteries, therefore establishing a baseline for security should not be considered a particularly revolutionary idea.

What is also worth noting is that while this is a good idea and will improve protections, it is by no-means a given the bill will pass into a law. A similar bill was launched in 2017, though it was quashed.

US reportedly pressures Germany over Huawei

After diplomacy failed to convince those pesky Europeans Huawei should be banned, the US has reportedly moved onto the tried and tested tactic for getting its way; being a bully.

It was never going to be long before the blunt hammer of political persuasion came out, and according to the Wall Street Journal, the White House is huffing, puffing and about to start swinging. The German Government has reportedly been told to ditch Huawei kit or it will be barred from accessing US intelligence databases.

Should the reports prove to be true, this would be the first time the US has threatened allies with direct consequences for ignoring the anti-China propaganda. That said, it should come as little surprise. The US is a political power not used to being told no, especially with the narcissistic President Trump acting as puppet master. Being nice can only get you so far, and the White House has seemingly had enough of those pesky Europeans making their own decisions.

While Huawei remains a company under scrutiny, the European nations has so far resisted any knee-jerk reactions. It has been rumoured Germany was preparing new security requirements which would protect itself and its citizens, but also allow Huawei to continue operating in the country, and last week was confirmation. The release of a draft bill, outlining the new security requirements laid out the German position; Huawei looked safe in Germany.

Germany is of course a large economy and a key trading partner of the US, though it is also a heavyweight amongst political featherweights in the European Union. In drafting these new security requirements, other countries across the bloc might follow suit, such is the influence of Berlin. Perhaps this is a situation which the dented-ego of the US would not allow, especially considering its lobby efforts have largely been ignored across the European continent.

With Europeans taking a more proportionate response to the threat of foreign actors, the US will of course not be happy. The bully of yesteryear is beating its chest, and collateral damage from the US/China trade war could be about to get much wider.

The big promise of politics just got bigger

The Senator Elizabeth Warren campaign roadshow is officially underway, and the tech giants are sitting in the crosshairs.

We might be slightly protected from it in the UK, but politics in the US has become much more about theatre than concrete issues of today. For every campaign launched, there needs to be a monumental promise made which will shake the foundations of society. For Donald Trump, the wall proved to be that divisive point, and for Warren, it is the spearhead of US political and economic dominance on the global stage; the internet economy.

“I want a government that makes sure everybody – even the biggest and most powerful companies in America - plays by the rules,” Warren said in a Medium post.

“And I want to make sure that the next generation of great American tech companies can flourish. To do that, we need to stop this generation of big tech companies from throwing around their political power to shape the rules in their favour and throwing around their economic power to snuff out or buy up every potential competitor.

“That’s why my administration will make big, structural changes to the tech sector to promote more competition — including breaking up Amazon, Facebook, and Google.”

And just like Trump’s wall, in reality this promise is nothing more than a PR plug to grab headlines.

Stepping up the hubris game

President Donald Trump is the master and current reigning champion of this competition.

In 2015, Trump entered the world of politics with wide-sweeping messages of hate, xenophobia and borderline racism. These political sound bites, designed to rouse in Middle America and drive forgotten voters to the polls, culminated in the claim he would force Mexico to pay for a wall which would span the width of the US southern borders. Three years into his presidency, Trump is still searching for the wall’s funding, and Warren could be walking into the same problem.

Breaking up the internet giants, the very companies who drove the US economy for years and have now become the world’s punching bag, is a daunting task. It might sound attractive to voters, the people who seek fortunes but cannot congratulate those who have found them, but what happens if Warren is unable to deliver on the marquee promise of her campaign?

This is the very dilemma which Trump is currently facing. His campaign was built on the promise of the wall, but the world still awaits the delivery. Warren is now promising an outcome which will not come easily, potentially becoming the architect of her own downfall, offering ammunition to critics and opponents.

Big promises = big problems

Warren’s promises are a threat to the giants of Silicon Valley, and you can guarantee the lobby machine has already been kicked up a gear.

First, Warren is promising new legislation which will designate some business activities as ‘Platform Utilities’. Facebook is an example, and it does appear Warren’s vision is to separate the functional aspect of the platform from participation activities. It sounds very logical, but you have to consider that the platform in these companies is essentially run as a loss leader; these platforms are free for the consumer and would not exist if the parent company was not entitled to monetize the user.

“These companies would be prohibited from owning both the platform utility and any participants on that platform,” said Warren. “Platform utilities would be required to meet a standard of fair, reasonable, and non-discriminatory dealing with users. Platform utilities would not be allowed to transfer or share data with third parties.”

It would be interesting to hear how Warren thinks Facebook or the Google search engine would continue to function if the ability to make money was removed.

The second major point to consider from this post is the unwinding of what could be perceived as anti-competitive mergers.

At Google, Waze, Nest and DoubleClick are the three transactions which are considered anti-competitive, and therefore under these new plans would be reversed. We believe there are two major issues with this promise.

Firstly, removing these aspects of the business would be incredibly difficult, verging on impossible. This might not be the case for some, Nest for example, however DoubleClick is now so deeply embedded in various different functions of the Google business where do you even start?

Secondly, hindsight is an issue. Some of these transactions are only deemed as anti-competitive because of the success. DoubleClick may well not have been a success without the scale and power of Google. The company is being punished for being good at what it does.

In this case, 1+1+1 = 4. This transaction has been deemed as anti-competitive because of the sum of the parts. Google has collected several different components to make a greater result. Individually, each component is powerful, but the outcome is greater.

The not-so-slumbering giants

Google, Amazon, Facebook and numerous others will not take this aggressive attack on the basic business principles of Silicon Valley lying down.

Warren will not be the only politician to make a move against the wealth, power and influence of the internet giants, but the lobby and legal challenges will be astronomical. Should this promise get anywhere near a draft bill or even legislation to pass through the House, legal challenges will be lodged, PR propaganda will be launched, and in-direct, passive-aggressive threats will be made.

Lawyers are excellent at slowing the wheels of progress, and many of the world’s best lawyers call Silicon Valley home.

We suspect the Warren campaign team has not thought this strategy through entirely, there are too many holes and illogical conclusions. From a conceptual perspective, this is the Mexico wall promise in shape-shifting form. It is a promise which sounds attractive to voters but will be almost impossible to deliver.

That said, theatre in US politics works, and Silicon Valley is home to the bad guys right now. We suspect a political administration hell-bent on breaking-up the internet giants will fail, but it could be a big enough promise to attract votes.

FCC and Oval Office locking horns over 5G

The FCC originally looked like a diligent foot-soldier for the President, but with the nationalised 5G infrastructure argument seemingly emerging again, heads are set to butt.

Reports have been emerging in various corners that the White House is revisiting plans to develop a nationalised 5G network, a plan originally raised in January 2018 to keep the US at the front of the technology arms race. The plan was shot-down back then, and the FCC has already raised set the tone of resistance through social media over the last week or so.

Following the President’s twitter rant last month, which saw the Commander-in-Chief bemoan progress being made by the telcos, FCC chiefs set their position out quite firmly.

In the case of FCC Chairman Ajit Pai, a retweeted message from 2018 reiterates a point which was made when the plans were first suggested; hands-off from the government is the best stance. This seems to be one of the only positions the Democrat and Republican representatives on the board of the FCC seem to agree on; the telcos should build the US 5G network, not the government.

Although the White House has not released any official statement confirming its favour of a nationalised 5G infrastructure, the defensive position entrenched by Pai and Commissioner Jessica Rosenworcel suggest there have been conversations which neither like. These tweets could be viewed as in-direct opposition, with the pair attempting to get ahead of the game.

According to Politico, this isn’t the only conflict which is emerging either. The Trump 2020 re-election campaign team have been pushing the benefits of a government-owned, wholesale infrastructure, while the current Trump political administration are keen to avoid the topic. While the disagreement is hearsay and reports for the moment, it would not surprise us if the Trump campaign led with such a promise.

This sort of political manoeuvre fits perfectly into the Trump playbook from his first election campaign. It hits pain-points for US citizens in the politically less-attractive states, the very people Trump was able to mobilise in 2016. However, attacking the digital divide in rural communities is not a new trick, Hilary Clinton used this tactic in 2016 also, but a nationalised 5G infrastructure will appeal to those who feel ignored by corporates. Trump has shown he can communicate effectively to those who believe they are under-represented by mainstream politics, and this angle could prove to be an effective tool.

The idea which seems to have been raised here is to create a wholesale network in partnership with a private third-party. The government would fund the deployment of the network, while the third-party would manage the operations and wholesale business, creating a system which would operate like the electricity market, with parties ‘purchasing connectivity’ on a rolling basis.

Theoretically, this position sounds wonderful. The arguments for nationalisation are often very compelling, and it could be justified as an effective way to spend tax-payers money. However, nationalised businesses and infrastructure have been shown to be ineffective time and time again. The government is not equipped to manage such projects in the long-run and not savvy enough to compete against private entities when they emerge. It might sound very appealing to voters who are stuck in the chasm of the digital divide, but it will not help the US in the global technology arms race.

As Brenden Carr, a Republican FCC Commissioner, notes above, private industry is the best way to secure a leadership position in 5G. This is a lesson which has been learned numerous times over the years in the US; when you leave private industry alone, simply creating a legislative and regulatory framework to encourage growth, much can be gained. In the technology world, this is perfectly evident with the success of Silicon Valley.

The dominance of the US on the technology stage is being widely challenged, though it seems the ego of the Trump party is getting in the way of logic. First to market does not necessarily mean the best, but this seems to be the angle which the President’s team is taking.

The big question is what impact this will have on the future for the Republican party. Should these rumours of a nationalised network evolve into reality, a split may well appear in the rank and file. The Republican FCC representatives are clearly not happy about this position, and neither are the science and technology advisors in the White House. However, you can’t argue that such a campaign promise would be very attractive to those who currently reside on the wrong side of the digital divide.

Here is what the Trump 2020 electoral campaign team will have to assess; is the long-term detriment of communications infrastructure a fair trade-off for the lure of ‘Middle America’ votes in the 2020 election? We suspect they won’t be looking much further beyond 2024.