Huawei Says U.S. Blacklisting Will Only Raise U.S. Networking Hardware Prices And Delay 5G Deployment

from the blackballed dept

So we’ve noted for a while now how the U.S. government has deemed Chinese hardware vendor Huawei a nefarious spy for the Chinese government, and largely blackballed it from the U.S. telecom market. From pressuring U.S. carriers to drop plans to sell Huawei phones, to the FCC’s decision to ban companies from using Huawei gear if they want to receive federal subsidies, this effort hasn’t been subtle. But there’s numerous problems with the Trump administration’s efforts here, ranging from protectionism to blistering hypocrisy.

While it’s certainly possible Huawei helps the Chinese government spy on American consumers en masse, nobody has been able to provide a shred of actual public evidence supporting that allegation. That despite an eighteen month investigation by the White House finding no evidence of actual spying on U.S. consumers. Also ignored: the fact that U.S. hardware vendors like Cisco routinely like to hype this threat to scare gullible lawmakers toward protectionism and providing Cisco an unearned advantage in the network and telecom market.

Even if you want to ignore those facts and still claim Huawei routinely spies, you’d have to ignore the fact that countless hardware, including gear made by U.S. companies, contains an ocean of Chinese-made parts that could just as easily be used to spy on Americans. The reality is that China doesn’t even need Huawei to spy on Americans. The internet of broken things sector alone provides millions of new potential attack vectors annually that are often exploited by intelligence agencies.

If you still want to assume Huawei is up to no good without any public evidence, you’d also have to ignore the United States’ blistering hypocrisy on this subject, given how Edward Snowden documents revealed that not only did the NSA break into Huawei starting in 2007 to steal source code and implant its own backdoors, but that the agency also intercepted Cisco hardware en route to customer delivery for the same purpose.

None of this is to say Huawei doesn’t engage in bad behavior like every other telecom industry giant, only to state that we’ve let nationalism and protectionism get in the way of clear thinking on this subject. Occasionally you’ll see a bigger media outlet courageous enough to bring up the fact that the evidence justifying total blackballing is shaky at best, but not often. Even reporters who traditionally chatter at length about objectivity in reporting aren’t particularly good at seeing how nationalism can infect a hot take.

While the folks pushing this stuff may seriously think they’re doing the U.S. a favor by trampling a security threat to help boost Cisco revenues, a filing this week by Huawei argues that the United States is only shooting itself in the foot. By banning carrier access to cheaper Chinese hardware, the government is only driving up prices for domestic network gear, while also potentially slowing U.S. next-gen wireless (5G, or fifth generation) deployment plans:

“Huawei?s lack of presence in the U.S. would raise prices, harm competition, hinder innovation, and ultimately delay 5G deployment. Huawei?s entry into the U.S. market provided much-needed competition,? argued Huawei?s Dowding in the filing. ?As a result of the lack of competition, equipment prices in the U.S. market in general tend to be about 20-30% higher than they are in other developed regions, for example in Europe.

This isn’t just Huawei’s take. Smaller companies with tight margins opposed most of the blacklisting as it only hurts them. And even AT&T and Verizon opposed the effort, though they were willing to overlook the hypocrisy to protect their own cozy spying relationships and contracts with the U.S. government. Amusingly, Huawei also takes time in the full filing (pdf) to note that with the U.S. broadband industry as messed up as it is, blacklisting makers of cheaper hardware isn’t likely to help things:

“…Various studies have shown that the United States? telecommunication infrastructure is falling behind those in other developed countries…In 2018 rankings, the U.S. ranked #44 for mobile network speed and #9 for fixed broadband. A 2016 report shows the mobile network speed of United States is about 2/3 of China?s.”

And while there’s certainly numerous ways to fix the lack of competition and regulatory capture responsible for mediocre U.S. broadband, blacklisting one of the leading global makers of cheaper network hardware, smartphones, and other tech isn’t the answer. Of course Huawei’s arguments will likely be ignored by Uncle Sam, but it’s still worth documenting for the next time this particular game of patty cake gets played by folks who like to disguise vanilla protectionism as noble national security defense, while ignoring the U.S.’ own terrible track record on this very same subject.

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Companies: huawei

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Comments on “Huawei Says U.S. Blacklisting Will Only Raise U.S. Networking Hardware Prices And Delay 5G Deployment”

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Anonymous Coward says:

Re: Re: If they found spying

If they found spying they’d say "you better give us access to this spying data

Unlikely—then a Chinese company, and possibly the government, would have evidence of it. The US government is still trying to deny spying on Americans, and they wouldn’t want China to have that "dirt" on them.

Anonymous Coward says:

Re: Re: Re: If they found spying

The point is not what they know, the point is getting us to believe things they want us to believe.

If I were government and found a spying device, I would first see if I could compromise it for myself, because why the fuck not? Despite what it says government does not give a shit if foreign surveillance is targeting citizens. They only care if surveillance is getting information the government does not want out or heh heh… getting the information they are feeding it. And it’s not like a foreign nation ratting them out for spying would do anything either. I mean, no one actually cares beyond the noise they mumble into microphones. Just exactly what would happen if China said the US was using hardware to spy on anyone? nothing.

China is spying on us, we are spying on them. Everybody is spying on everybody and when you find a spy out the first thin you NEVER do is rat them out or alert anyone that you are any the wiser to it. Better to know they/it are there and make use of it for yourself.

When a spy is put on display in public court it is for show only.

Anonymous Coward says:

this is nothing but scaremongering by the government in charge, led by the person in charge, that want to do exactly what they want, anywhere in the world but dont want any other country to do the same things in return, let alone in retaliation! how the hell did we get into this position is beyond me! you can bet that no good will come of it. and if Huawei or any other foreign company was doing what has been accused, anyone who thinks that the USA is doing any the less anywhere else, including on our own soil, to our own citizens, is in cloud cuckoo land!! the USA is the worst of a very bad bunch!!

Anonymous Coward says:

The China hardware hack

Odd that no one mentioned the recent story in Bloomberg Business about China sneaking chips onto motherboards that were used by US companies (including some that dealt with sensitive government intelligence). With most US electronic equipment built in China, they didn’t need Huawei for that spying. The spying chips were right on the motherboards of US products including Apple.

bob says:

Re: Re: The China hardware hack

And yet Amazon not only supports the claims but also actively particpated in the investigation. Apple just didn’t want users to know they might have a breach. Again follow the money.

Luckily though, even with the chips on the boards hackers still have to have open communication lines with the chip to exploit anything. So it wasn’t like mass exfiltration of data can easily happen.

That Anonymous Coward (profile) says:

Something something better supported claims against Mr. Kavanaugh than Huawei, but shockingly different outcomes.

“That despite an eighteen month investigation by the White House finding no evidence of actual spying on U.S. consumers.”

How could they tell between what they are shoveling up vs anyone else doing it?

But hey now the telco’s have the Chinese boogeyman to blame their inability to be world class. Make American Great Again, unless doing so might hurt the monopolies we propped up.

Bamboo Harvester (profile) says:

Re: Re:

“How could they tell between what they are shoveling up vs anyone else doing it?”

Exactly. Much like they’re “proving” the Russians are hacking … well, everything.

I’m only on a two-level proxy right now, I think I’m showing up as out of California. I can switch that to pretty much any major city anywhere on the globe EXCEPT Russia (law requires logging, so no VPN will use Russian servers anymore).

Seriously, what kind of special idiot do you have to be to leave a backtrail that is easily traced?

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