Senators and witnesses at a hearing today before the Senate Commerce, Science, and Transportation Committee pondered ways the U.S. and other nations can ensure their 5G network supply chains are secure, citing challenges of using vendors such as Ericsson and Nokia rather than Chinese-based vendors such as Huawei Technologies Co. Ltd.
Among the steps that could help alternative vendors compete with Huawei, which receives government funding for research and development and sells its equipment at a 30% or higher discount thanks to support from the Chinese government and Chinese banks, are to gain U.S. government support for R&D funding as well as for financing of alternative telecom gear, according to Mike Murphy, chief technology officer in the Americas for Nokia.
“The U.S. Export Import Bank and the recently renamed International Development Finance Corporation could potentially provide billions of dollars of grants, direct loans, loan guarantees, and insurance to exporters of 5G technology with its origins in the U.S, including to Nokia,” he said. “Fortunately, there is movement in this direction now that reauthorization has been completed and the Administration appears to support moving forward as well. I encourage Congress to express its support for using these important programs to support trusted suppliers and to help them compete on a more level playing field internationally.”
In response to the assumption of some that there is no viable alternative to Huawei for telecom equipment, Messrs. Murphy and Jason Boswell, head-security/network product solutions for Ericsson in North America, said their companies can meet the manufacturing demand for 5G gear.
While calling Huawei “a formidable competitor,” Mr. Murphy said, “We don’t feel we’re at a technical disadvantage in being able to keep on par with Huawei.”
“To date, both Congress and the Trump Administration have taken a number of actions to address these security threats and protect our networks and devices from hostile exploitation. These actions include banning the use of Huawei and ZTE components in government systems; prohibiting the use of Universal Service Funds to purchase communications equipment and services from Huawei and ZTE, and other high-risk suppliers; and adding Huawei and its affiliates to the Entity List,” committee Chairman Roger Wicker (R., Miss.) said in his opening statement. “Most recently, Congress passed the ‘Secure and Trusted Communications Network Act’ [TR Daily, Feb. 27]. When signed into law by President Trump in just a few days, this law establishes a critical ‘rip and replace’ program for small and rural telecommunications operators to remove compromised equipment from their networks and replace it with components from trusted suppliers. While this is a meaningful step forward in safeguarding the security of the nation’s communications systems, the unfortunate reality is that our networks have already been compromised by foreign adversaries.
“We are seeing more reports that Huawei can covertly access mobile phone networks around the world. At the same time, some of our close allies are granting Huawei access to their communications systems,” Sen. Wicker added. “These are troubling developments. We need to do more to shore up our own network defenses against hackers and state-sponsored actors, especially in our nation’s rural and underserved communities. This effort will require the development of a comprehensive strategy to secure the telecommunications supply chain. Currently, Huawei maintains the largest global market share of telecommunications equipment. The absence of a viable and affordable American or European alternative for end-to-end telecommunications components, including radios, chips, software, and devices, has enabled Huawei to increase its global influence.”
In her opening statement, Sen. Maria Cantwell (D., Wash.), the committee’s ranking member, said that “the discussion by policy makers about how to keep unsecure networks and equipment out of our domestic networks has been the focal point, but obviously eliminating the threat posed by [this] equipment is the highest priority. We can’t just simply look at that issue—we need to make sure that we are a loud voice across the globe for no government back doors to any security network. By mitigating this, we are helping to communicate what needs to be done. I believe it’s an imperative that the U.S. and its allies foster a truly secure, diverse, and reliable supply chain for communications equipment. We need to ensure the communications systems are secure, and that the connections to those systems and software are also secure. To accomplish this, first and foremost, we need a broader strategic plan, and I know that recently our bill [Secure 5G and Beyond Act (S 893)] that we passed out by our colleague Senator [John] Cornyn [R., Texas] in July [TR Daily, July 24, 2019] was about getting the President to send to Congress a much needed strategy on 5G, and hopefully we’ll see more details on that soon.
“But we must also build a forceful global coalition of countries to share our values and respect property rights and the rule of law, and we need a smart, multi-national approach to this,” Sen. Cantwell added. “And so I hope that Mr. Chairman will continue to work with our colleagues on the Intel Committee and on the Foreign Affairs Committee to make sure that this is also being accomplished. We must create incentives for other countries to use communication equipment that does not contain a government back door access, and the United States should have a great source of allies to work with us on these issues.”
Competitive Carriers Association President and Chief Executive Officer Steve Berry thanked Congress for passing the Secure and Trusted Communications Networks Act (HR 4998), which would provide $1 billion for carriers to rip and replace insecure equipment in their networks. He also urged officials to be flexible in its implementation and provide extensions of a one-year deadline if needed.
“While the legislation that recently passed establishes a swift one-year timeframe, I appreciate the inclusion of a waiver process to ensure that carriers that are unable to complete changes to their networks in such a rapid fashion remain eligible for support,” said Mr. Berry, who suggested that one year might not be long enough for many rural carriers. “Several factors, including available spectrum resources, equipment availability, limited windows to build in certain harsh geographic areas, permitting processes, the need for testing and configuration of new equipment, and even the availability of a properly trained workforce will all impact the time necessary for each impacted carrier to complete the transition process.”
He also praised the bill for requiring the FCC to compile a list of trusted vendors, legwork that he said rural carriers don’t have the resources to do.
Mr. Berry also told the senators that timing is key in removing insecure equipment from networks, with additional technologies that will come to market perhaps helping in the process. However, he said that technologies such as virtualization won’t inherently make networks more secure.
Mr. Berry also said that while HR 4998 is known as a “rip and replace” bill, in fact providers must “replace and then rip” to ensure customers don’t lose service. “These carriers essentially are trying to rebuild the airplane in mid-flight,” he added.
Mr. Berry also said that while new technologies can help save carriers save money and spur innovation, “policymakers should not mandate technologies.”
Mr. Berry said it is unclear whether $1 billion will be enough to enable carriers to replace unsecure equipment. He said his members are seeking bids from vendors now.
Mr. Murphy agreed that rural carriers might be challenged in removing equipment in 12 months, and he urged officials to “liberally” grant six-month extensions.
Asha Keddy, corporate vice president and general manager-next generation and standards, for Intel Corp., said virtualization will be key to secure 5G networks.
As for relying on cloud-based solutions to secure networks, James Lewis, senior vice president and director of the Technology Policy Program at the Center for Strategic and International Studies, said that experts have told him that such assistance won’t be available for three to 10 years. He also agreed that there are multiple alternatives to Chinese vendors.
While bemoaning the fact that countries such as the United Kingdom have refused to ban Chinese vendors from their 5G networks, Mr. Lewis said that it is incumbent on the U.S. to work with them as they implement partial bans to ensure that systems are secure as possible.
“I believe America’s 5G problem is overstated. If we take the right steps, we can win this race,” he said.
He also said that the U.S. should make it clear to other countries that it’s “complete nonsense” that Huawei is the only vendor that carriers can rely on for 5G gear. He added that U.S. support for exports would also be helpful.
“I see an international coalition emerging,” Mr. Lewis added, although he said getting it up and running has been “a little bumpy.”
Mr. Murphy repeatedly stressed the firsts the U.S. has seen in 5G, including the first deployments, the first use of millimeter-wave band spectrum, the first use of nationwide low-band frequencies, and the first virtual network solutions.
Mr. Boswell stressed the importance of mid-band spectrum, streamlined small cell rules, and, like Mr. Berry, a skilled 5G workforce.
Sen. John Thune (R., S.D.), chairman of the communications, technology, innovation, and the Internet subcommittee, announced that he plans to introduce a bill this week “to ensure the security of our communications infrastructure is a clear negotiating objective of U.S. trade policy. Unfair trade practices of communications equipment suppliers owned or controlled by a foreign government should not be tolerated.”
“I think this legislation is long overdue. It is essential,” Mr. Lewis said.
Sen. Cory Gardner (R., Colo.) pressed Messrs. Boswell and Murphy on the security of their products that are made in China.
Mr. Boswell said that none of its products made in China is used in the U.S. market. He also said that all software development funnels through Sweden, providing greater control and transparency.
Mr. Murphy also said that no U.S. equipment is made in China. As for R&D that Nokia conducts in China, he said that employees there must make the same ethical pledges as Nokia employees in other parts of the world.
In a related development, Verizon Communications, Inc., AT&T, Inc., and Juniper Networks, Inc., have written letters to the Senate Commerce Committee expressing support for bipartisan legislation introduced in January that would provide at least $750 million from FCC spectrum auction proceeds for an R&D fund to counter Chinese companies’ dominance in building 5G networks (TR Daily, Jan. 14). The Utilizing Strategic Allied (USA) Telecommunications Act (S 3189) also would create a $500 million Multilateral Telecommunications Security Fund.
The measure was introduced by Sens. Mark Warner (D., Va.) vice chairman of the Senate Intelligence Committee; Richard Burr (R., N.C.), the Intelligence Committee’s chairman; Bob Menendez (D., N.J.), ranking member of the Foreign Relations Committee; and Marco Rubio (R., Fla.), Michael Bennet (D., Colo.), and Cornyn. —Paul Kirby, [email protected]
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