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

(Mis)Uses of Technology

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.

Filed Under: 5g, blacklisting, china, wireless
Companies: huawei