US wants to spend 1 billion USD to create “Huawei of America”

A new bill introduced in the US Senate on Tuesday set the goal of forming a Western counterweight to Huawei Technologies and undermining China's dominance in the field of full-blown 5G networks. bridge.

One of the biggest issues in the US plan to confront China's power in the field of 5G networks – fifth generation, faster, more functional telecommunications systems – is that they don't have the The company is able to replace Huawei globally.

Huawei booth at CES 2020

The US itself does not have any counterweight to Huawei; while Nokia of Finland, Ericsson of Sweden, and even Samsung of South Korea, are not comparable with the technology and lucrative contracts that Huawei proposed.

That is the gap the new draft of the US Senate seeks to close. If passed, the new law would allow spending more than $ 1 billion to strengthen Western competitiveness, allocate new spectrum, and support research and development (R&D) in the telecom industry. informed.

" We are at a critical moment in history to define the future of US-China relations in the 21st century, and we cannot allow telecommunications companies under government direction. China surpasses its American rivals. " – Senator Marco Rubio, sponsor of the bill said.

Rubio added that the US government's efforts to persuade foreign allies to ban Huawei from participating in its mobile networks have been hampered by the absence of viable, affordable alternatives. Cost is acceptable. According to him, those alternatives are essential to be able to deal with " state-owned telecommunications companies with bad plots, a clear and ever-increasing threat to economic security and national security of the United States and its allies ".

In a Silicon Valley talk the day before, US Secretary of State Mike Pompeo reiterated the Senate's policy regarding the removal of Chinese carriers from 5G networks in the West. .

" China presents unprecedented challenges, especially to your industry," (technology industry), Pompeo told the Silicon Valley leadership.

" We will remind our allies and partners to pay attention to the serious security and privacy risks associated with allowing Huawei to build 5G networks right inside their countries."

"This is not intended to sell US products. It is not a US commercial effort. It is a national security effort," Pompeo added.

US Secretary of State Mike Pompeo spoke in San Francisco on Monday

The bill is the latest US government move to put pressure on Huawei. The Trump administration has banned government agencies from using Huawei devices; blacklisted foreign companies banned from buying US technology; lobbying allies not to use Huawei equipment in their 5G networks; and urged Canada to host Meng Wanzhou, Huawei's CFO and daughter of Huawei's founder, for violating a ban on doing business with Iran.

And the Trump administration is also considering a change in legislation to restrict sales to Huawei of non-sensitive items, such as standard mobile phone chips, created in secondary third-party countries. depending on American technology, software, or components.

The six Democratic and Republican Senators – who introduced the draft Strategic Telecommunication Act – emphasize that moves to challenge China have received broad support from both parties in the US government recently.

The US and China, the world's two largest economies, halted their 18-month war with a phase-one trade deal signed on Wednesday. But US tariffs remain on $ 250 billion worth of Chinese goods. And U.S. doubts about China have now spread to education, justice, investment, and espionage, among many others.

Even so, even if introducing a draft is relatively easy, and the proposal has been bipartisan support, how to get it approved – especially in the current situation – is very difficult. towel.

Up to now, only about 5% of the bills have become law. And this moment is clearly not the most appropriate time.

In addition to the heated debate between the executive and judicial branches, whether ready or not, the Senators are still planning to hold impeachment trials for US President Donald Trump on Thursday. And policies and political directions are also being strengthened to keep up with the presidential election in November.

Huawei CEO Ren Zhengfei

Huawei asserted that the draft was a mistake.

" Huawei has spent billions of dollars on 5G research, so it is unfortunate to see the United States wasting people's taxes on copying (our) results, when there are more cost-effective ways. to ensure the safety of a network, "said Donald J. Morrissey, Huawei's director of US government affairs.

He proposes a better direction "to authenticate through inspection, to set high global standards, and to provide risk insurance and risk mitigation processes and standards to ensure security." network ".

The provisions of the bill include requiring the Federal Telecommunications Commission (FCC) to spend at least US $ 750 million in revenue the organization receives from the auction of new spectrum licenses to form a fund. research and development. The fund will be used to promote innovation related to open architecture wireless technology on the software platform and the broadband mobile market in the US.

In addition, the bill calls for the formation of a US $ 500 million fund with the cooperation of foreign partners to accelerate the application of " reliable and reliable equipment globally" – and It must be regularly reported to parliament to ensure the process is being taken seriously.

The bill also provides a plan outlining the steps that small telecommunications companies, in remote areas – many of which have to buy Huawei equipment because of the relatively cheap price – can take to switch to open source devices sourced outside of China. The bill also urges the United States to take a stronger leadership position in international standards-setting organizations amid concerns that Chinese companies will form and dominate next-generation telecommunications technology management standards. follow.

Finally, the bill encourages suppliers to scale up and apply common standards as a way to help lower product costs and provide a more attractive alternative to Huawei equipment. .

"With each passing month without the US taking action, Huawei is increasingly moving towards the position of the world's cheapest, fastest, most popular 5G provider, while American and European companies and workers. Europe loses market share and jobs "- co-sponsored, Senator Mark Warner, said. "The National Assembly must address the complex security and competitiveness challenges that Chinese-led telecommunications companies are causing."

The telecommunications industry and national security conglomerates say the draft is a step in the right direction. " The draft goes straight to the heart of the concerns of the US intelligence community, which is seeking to protect telecommunication networks and intelligence services from allied countries," – Kyle Sullivan, China expert at Crumpton Group, an intelligence-based business consulting group. " Providing an alternative to the US-made Huawei would be of great help."

The leader of a telecommunications company, who asked not to be named because of work related to the US government, said the draft goals were somewhat mixed.

According to him, while sponsors have repeatedly said about eliminating Huawei and setting up an alternative, many funds seem to be aimed at strengthening open technology systems, allowing for Easy connection between all carriers, including Huawei and ZTE Corp (another Chinese telecommunications equipment manufacturer). "It's a little hard to understand what they're really talking about when it comes to development," he said.

But the draft focused on encouraging US software companies and allowing others to produce hardware is obviously not a bad strategy, he added. " It actually looks quite interesting and realistic. The draft seems to focus resources to take advantage of US core competencies. Reasonably, because $ 1 billion will not be able to help create a tycoon anyway. about networking equipment in the US ".

References: Abacus