Monday, August 10, 2020

FCC strike against Huawei reflects broader split between China and the West

Jul 02. 2020
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The United States's move to label Huawei as a national security threat and block it from billions of dollars in subsidies is its toughest move yet against the Chinese telecom. And with more allies poised to follow suit, Washington's uphill diplomatic campaign to isolate the company is at a turning point - and it's a sign of deepening fissure between the West and China. 

U.S. officials have long accused Beijing of using Huawei and other companies to spy on Americans and steal U.S. companies' data. But their arguments are gaining traction now amid Western anger over China's dissimulation about the initial spread of the coronavirus and more recently by its crackdown on Hong Kong. 

Huawei's reputation in the United Kingdom is souring as Prime Minister Boris Johnson is increasingly signaling he'll step away from a plan to allow Huawei to build parts of the nation's next-generation 5G wireless networks. 

And other Western nations such as Germany, Australia and Canada are expressing more concerns about Chinese influence over their computer networks. 

"People look at the Chinese government concealing what it knew about covid and they look at Hong Kong and what you hear from Europe is, 'We don't think we can trust them,' " said Jim Lewis, a former U.S. government cybersecurity official who is now senior vice president at the Center for Strategic and International Studies think tank. "They're saying that irrespective of the message coming from the U.S. and Trump." 

The Federal Communications Commission's action against Huawei came hours before President Donald Trump again took aim at China for the pandemic's spread:

"As I watch the Pandemic spread its ugly face all across the world, including the tremendous damage it has done to the USA, I become more and more angry at China. People can see it, and I can feel it!," Trump tweeted.

The pivot away from Chinese technology is coming from allies who previously expressed differing levels of concern about Huawei. 

Germany, which has refused so far to ban Huawei from its 5G networks, is nevertheless launching a major program to reduce reliance on foreign components in its telecommunications systems and other vital networks.

Canada also resisted U.S. pressure to outright ban Huawei, but its telecoms have mostly picked European suppliers as they build 5G systems.

Australia, which banned Huawei from 5G networks even before the United States did, is launching a roughly $1 billion program to boost national cybersecurity defenses after uncovering a massive data breach that affected all levels of government and that was reportedly launched from China.

Officials say the dangers of an adversary hacking 5G networks is far greater than earlier generations of networks because they will carry exponentially more data and power a new generation of Internet-connected devices such as smart cars and factories. 

The FCC move brings to fruition more than a year of efforts to cut ties between U.S. phone and Internet providers and Huawei.

By labeling the Chinese telecom a national security threat, the commission effectively stops the flow of $8.3 billion in federal money to providers in rural and low-income areas unless they rid their systems of Huawei parts. It also applies to the Chinese telecom ZTE, which the FCC also labeled a national security risk. 

FCC Chairman Ajit Pai recounted a litany of standard U.S. charges against the companies as he announced the move. Those include that they're too closely tied to the Chinese communist government and are either already using their access to U.S. networks to spy on Americans or could easily be compelled to do so. 

The companies have consistently denied those charges. Huawei didn't respond to a request for comment. 

The move came just days after the Pentagon included Huawei on a list of firms backed by the Chinese military, easing the path for the Trump administration to impose additional penalties on the company. 

It also comes after a year of increasingly harsh restrictions by the White House and Commerce Department including banning Huawei from building U.S. 5G networks and blocking U.S. companies from selling components to the company. Most recently, the Commerce Department restricted foreign companies that sell computer chip parts within the United States from doing business with Huawei - a move that made it increasingly difficult for the company to compete globally. 

China hawks in Congress were quick to applaud the FCC move. 

Sen. Ted Cruz, R-Texas, called Huawei "a direct threat to our national security." Sen. Marsha Blackburn, R-Tenn., called the move vital to securing U.S. critical infrastructure. 

Republicans on the House Energy and Commerce Committee said the move would "keep American networks secure from bad actors."

The move faced criticism, however, from rural wireless providers that are most dependent on the federal aid and most likely to use Huawei. 

The Rural Wireless Association said in a statement that it was "stunned" by the decision. The trade association fretted it would put carriers in a "precarious situation," especially as they struggle to provide services amid a surge in internet and phone use during the coronavirus pandemic. 

The order allows carriers to request waivers if they can't remove their Huawei and ZTE gear right away. The group asked the FCC to give carriers extra time to submit those waivers before they lose the subsidies. 


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