If you thought the UK’s Supply Chain Review was coming to an end, think again as policy makers have been given more food for thought as part of the 5G infrastructure and national security inquiry.
Entitled ‘Ensuring access to ‘safe’ technology’, Parliament’s Joint Committee on the National Security Strategy has opened itself up to public comment. Although it comes as little surprise, the feedback is relatively consistent; let the industry work with Huawei and take a risk-based approach to managing infrastructure and networks.
For those looking across the Atlantic, there might be some hurt feelings. Business and academics from across the UK have largely panned concerns, albeit in very polite wording, suggesting that while there are security standards and regulations to ponder, the US rhetoric is largely not supported by evidence and undermined by its own actions.
Submitted to the inquiry mid-way through last week, the team at Oxford Information Labs makes a very valid point regarding Huawei’s entry onto the Entity List:
“The ban was immediately suspended for 90 days, and that suspension was continued for a further 90 days in August 2019, casting doubt on whether Huawei really did represent an immediate ‘national emergency’ as originally claimed.”
Many might have contemplated this opinion, but few have vocalised it. If Huawei is such a threat to US citizens and business, why has the US Government so easily allowed it to continue to do business within its borders? If the White House propaganda is to be believed, Huawei should be erased from the Land of the Free, though the US Government has continued to validate its presence through the two exemption periods.
There is of course the damage to US businesses to take into account but suspending the enforcement of the ban does undermine the insistence that Huawei is the tip of the Chinese sword.
Another point to consider, which is constantly overlooked, is the depth of evidence to support the wild claims of the White House.
“The US Congress has a long history of making accusations against Huawei, though it has never produced any technical evidence to show that it has undermined the security of its network equipment or that it has impaired the performance of or shutdown networks using its equipment,” said Ewan Sutherland, a telecommunications policy expert from the University of the Witwatersrand.
From a personal perspective, your correspondent feels this is an element of the saga which should be taken very seriously. Due to market consolidation and the intensive R&D demands of 5G, there are already few suppliers for the telcos to consider. If one or two of the major players are to be removed from the supply chain, this is a significant decision to make. Evidence should be at the heart of these actions.
This is an element of the debate which everyone should take into account. Huawei has no material presence in US networks, aside from working with a small number of regionalised players. The US does not have to take an evidence-based approach to banning Huawei, as there is little consequence. Other nations, who have existing relationships with Huawei, must take a much more contemplative approach as there are much more serious implications.
The call for Huawei to be managed as opposed to banned is one which has echoed out of the offices for some time. Vodafone has consistently called for a risk-based approach to procurement, while Three in its evidence to the inquiry has demanded the delay to deployment be minimised. This would appear to be the rational approach, though the UK Government does seem hard-pressed to support it.
This is where the telecommunications industry has backed itself into a corner. In the pursuit of a more cost-efficient supply chain, consolidation has been rife. Alcatel, Lucent, Motorola and Nortel were all victims of the consolidation trends, streamlining the number of suppliers who can offer services to the telcos at scale. Telcos now have to look at Chinese vendors to ensure there is competition.
In an ideal world, the UK or US Government might be able to point to a domestic supplier and suggest more products and services are sourced there. This would allow the Government to have more of a handle on development requirements, and despite the suggestion of a new player emerging, this is unlikely to have any material impact on 5G.
“Perhaps, the United States will push or support the creation of a new manufacturer of RAN, though it would need to be for 6G or 7G, rather than 5G,” said Sutherland.
The likes of Huawei, ZTE, Ericsson and Nokia have been investing in 5G R&D for close to a decade and have already begun 6G investigations. What chance would a new, standalone player have in penetrating this market within the next 10-15 years?
Looking through all the submissions, there seems to be a consensus. There are only three network vendors who can realistically support rapid 5G network deployment at scale, and Huawei happens to be one of them.
Regulators do need to have a much more considered approach to acquisition and mergers in the future, if not for any other reason as to avoid the bureaucratic congestion which we are seeing through this entire Supply Chain Review process.
Another interesting takeaway from the evidence which has been presented, is the desire to remain closely aligned with Europe following Brexit. This should not be considered new either, though perhaps this could build a bridge to repair the damage done by posturing politicians during the Brexit negotiations. Let’s not forget, Europe is the UK’s largest trading partner, and this will not change any time soon; relationships will have to be re-forged following the divorce.
Last week, the European Commission collated all responses from member states into a white paper which said very little which was not already known. 5G presents more of a security threat than generations prior, while state-sponsored attacks are becoming more of a risk. While this might have been seen as busywork, it was a necessary step in the bureaucratic maze to getting something done.
Over the coming months, member states will submit more evidence and recommendations to create what could become a pan-European approach to mitigating risk and rolling out 5G networks. What the submissions are suggesting to the UK Government is that any future proposals on the Isles align as closely as possible to what our European cousins are suggesting. Not only does this provide international consistency, it is a sign of good faith for future trade and political relationships.
Although this is not the end to the protracted evaluation of Huawei and the role of Chinese vendors in the UK network infrastructure segment, it does paint a very strong case for inclusion.
Europe has proven to be a key battle ground in the increasingly fraught conflict between the US and China, and few companies are more exposed to the risk as Huawei. This is a vendor which captures billions in profit in its domestic market, as well as across Asia, though Europe contains a significant number of very prominent customers. However, the trends do seem to be heading the right direction.
Germany has recently said it would not legislate Huawei out of the country, Italy signed a Belt and Road Initiative deal with China in March 2019, Belgium has conducted its own review without consequence to the vendor, while France and the Czech Republic have given warnings but not definitive action. While it is still anyone’s best guess, the UK looks like it is heading towards a risk-based position, potentially enforcing a multi-vendor approach to procurement.
Of course, while logic and behaviour suggest this is the most likely outcome, there is a lot which can go wrong. The UK will have to balance up the impact on existing and potential relationships, especially its standing in the valuable Five Eyes intelligence community.
At some point in the future, the Government is going to have to make a decision. The prolonged review of the supply chain does not sit beside political ambitions for a rapid rollout of 5G or the accelerated timeline for a full-fibre nation. The longer this review takes, the less likely it is the UK will be a major player in the digital economy.