Huawei Fights Back as State's Strayer Says Company Poses Risks to 5G Anywhere
The fight over banning Huawei from U.S. 5G networks intensified Wednesday. Huawei asked for summary judgment in a federal court in the Eastern District of Texas on the constitutionality of parts of the 2019 National Defense Authorization Act (NDAA). Robert Strayer, a State Department official, told an American Enterprise Institute forum the risk from Chinese companies is real and can't be eliminated if they're part of a 5G network. President Donald Trump said last week sanctions against Huawei could be part of trade negotiations with China (see 1905240038).
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Banning Huawei for security reasons “will do nothing to make networks more secure,” said Song Liuping, Huawei chief legal officer, during a news conference. “Politicians in the U.S. are using the strength of an entire nation to come after a private company,” Song said: “This is not normal. … The U.S. government has provided no evidence to show that Huawei is a security threat. There is no gun, no smoke, only speculation.”
Huawei sought summary judgment against the U.S. Tuesday in case 4:2019cv00159. Section 889 of the NDAA “disrupts Huawei’s existing contracts; stigmatizes Huawei and its employees as supposed tools of the Chinese government, bad actors, and purported security risks; and seriously threatens Huawei’s continued ability to do business in the" U.S., the company told the court (in Pacer).
In 5G, “unsecured components that are anywhere in the network, not just the core, could interact to influence and have dangerous implications,” said Strayer, deputy assistant secretary-cyber and international communications and information policy. “We strongly disagree with countries that think they can mitigate risk by putting untrusted vendors only in the edge of their 5G networks.”
Chinese law requires Chinese citizens and organizations to cooperate with that nation’s intelligence and security services, Strayer said. The Chinese government also “also does not have any meaningful checks or balances on its power.” China's President Xi Jinping has made clear “China does not intend to follow the Western road of constitutionalism, separation of powers or judicial independence,” he said.
Chinese companies have also benefited from “massive” state subsidies, giving them an unfair advantage over other companies, Strayer said. Based on the latest reports, Huawei has received more than $100 billion in support from the government, he said. “Given the close connection between companies and the government of China, the national security risks from allowing Chinese equipment vendors into any part of a 5G network should be clear and compelling.”
The Commerce Department is reviewing its recent decision to add Huawei, and its many subsidiaries, to the Bureau of Industry and Security’s entity list (see 1905160081), Strayer said. The entity list “is distinct from normal sanctions,” he said. “This is not a punitive measure. This is a way for us to say because of the violations of the Iran sanctions regime we’re going to take this strong step.” Huawei continues to deny violating the rules, he said: “I think there’s much more to be played out on this.”
Rising powers traditionally steal technology, said Zack Cooper, China expert at AEI. “The scale of the Chinese theft has been far beyond anything we have seen.” Estimates are that $250 billion a year in U.S. economic growth has been lost because of Chinese economic theft of intellectual property and trade secrets, he said.
Major U.S. tech companies like Google, Facebook and Twitter aren’t allowed to operate in China at all, Cooper said. “We didn’t start the struggle.” The U.S. is still trying to get international support for its actions against Huawei, he said. Strayer “has an incredibly tough job trying to sell these policies abroad,” he said. The U.S. position has support from Australia, and Japan and Germany are listening, he said. “The real challenge is going to be if you’re a smaller country that wants cheap 5G technology are you going to buy that technology from Huawei or are you going to listen to the U.S. and buy a more expensive system.”
Winning on 5G for the U.S. means having networks available, said Peter Rysavy of Rysavy Research. “All the major operators at the end of the year will have some amount of 5G deployed and that will accelerate over the next several years.” The U.S. is leading the world on the use of high-band spectrum for 5G, he said. Another sign of winning is having the patents and companies that develop the software for the new networks, Rysavy said: “It remains to be seen how involved U.S. will be in that.”
There are “multiple types of races,” said Mark Jamison, University of Florida professor. Some base the race on the amount of equipment deployed, he said. “That horse race will be different and we may or may not win,” he said: “We’re probably on a fairly good path.”