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US-China 5G slowdown could threaten global standards process

The climate of suspicion and hostility surrounding US-China trade relations is not only threatening to increase the time and cost to deploy 5G, but is also risking a damaging international split in the standards-setting process, claim operators.

Executives from three US operators – Sprint, AT&T and the public safety network FirstNet – failed to attend the most recent 3GPP meeting, which was held in Shenzhen, China (though Verizon and T-Mobile representatives were there). The ‘final drop’ of Release 15 standards was released there (see Wireless Watch April 8 2019).

The companies gave no reason for staying away, but AT&T’s absence, in particular, caused raised eyebrows, given the telco’s heavy influence over 3GPP processes – it even led the move to have a subset of the Release 15 standards fast-tracked, resulting in the Non-Standalone specifications. Sprint, AT&T and FirstNet have sent representatives to every plenary meeting of the 3GPP’s RAN Technical Specification Group (TSG) for more than two years.

There was speculation that the real reason was the poor relationship between the US and China, and the disputes over allegations of cyber-espionage by Chinese firms, which has been the pretext for a ban on Huawei and ZTE from infrastructure contracts including mobile networks.

“When making decisions about an upcoming 3GPP meeting, the only questions should be: which airline, what flight itinerary, and should I come early or stay late in order to do some sightseeing?” Mike Thelander, an analyst with Signals Research Group, who attended the meeting in China, wrote in a client note. “Unfortunately, the question seemed to have been, ‘given the political climate, what are the optics associated with my company attending a Huawei-hosted 3GPP meeting in Shenzhen, China?’ We doubt fear of flying or spring break plans on a beach in Florida or a golf course in Arizona factored into the decision not to attend.”

Attending the plenary meetings is not just a matter of presenteeism – operators use these sessions to understand and influence issues that will be crucial to their network plans.

Thelander added: “When a mobile operator doesn’t attend a standardization meeting then it isn’t present to further its agenda, which could be of strategic importance to the operator’s network evolution.”

Standards are part of the rising US-China hi-tech wars:

More broadly, the incident raises the issue of rising competition between the USA and China when it comes to leading standards. The days of China largely going its own way on core technologies – as when it was the sole adopter of TD-SCDMA as the basis of 3G – had seemed to be over, but now the country is once again seeking a technology self-sufficiency which may impact on its approach to supporting global efforts, at least those it cannot drive itself.

Conversely, the current US administration has complained about the deep influence China has on technical standards-setting, risking a split in processes which have generally managed to stay above international geopolitics. Recently, two Senators – Democrat Mark Warner and Republican Marco Rubio – called on the US Director of National Intelligence, Dan Coats, to “issue a comprehensive and unclassified report on China’s participation in the international standard-setting bodies for … 5G. This report would allow companies in the US to fully assess any existing threats to fair competition and push back against them.”

President Trump’s main economic advisor, Larry Kudlow, director of the National Economic Council, said recently: “I don’t want certain countries to run away with certain standards.”

The rising tensions risk a standards split of the kind seen in the GSM/CDMA and the 3G eras, which would also put at risk the scale of the global ecosystem of equipment and devices, achieved in LTE and envisaged for 5G.

That would be another blow to the hoped-for economic efficiencies of 5G networks, to add to the potential additional cost that will be incurred by operators in countries where Huawei and ZTE are barred from 5G deals, reducing the MNO’s choice of suppliers, for macrocells at least, to three.

As well as reduced price competition, companies that use Huawei for 4G – like Vodafone in Australia, a country that has blocked Chinese vendors from 5G deals – fear the cost of making a 5G network from a new vendor compatible with the 4G systems, or ripping out the Huawei gear and replacing it.

USA may soften line to allies as few agree to bans:

Many Huawei customers are loud opponents of any restrictions. Vodafone UK, conscious of the dilemmas facing its Australian stablemate, has warned that it would need to rip out 6,000 Huawei base stations, and that would delay its 5G network reaching scale because of the additional cost and migration effort required.

So far, only the USA and Australia have issued outright bans, while Japan has barred its federal agencies from using equipment from Huawei or ZTE. Other countries continue to debate the issue, and the possible risks of security breaches via Chinese equipment. France’s parliament is the latest to discuss a bill to introduce stricter security rules for 5G networks, though these would not be specific to Chinese equipment but follow the EU line that the main priority is to strengthen 5G protections across the board.

The proposed legislation would mandate special testing of 5G equipment before its vendors would be eligible to win network contracts. It would also extend vetting processes to electronic components and RAN or tower software. However, an earlier version of the bill failed to gain support in the parliament earlier this year.

The USA has intensively lobbied its allies, especially fellow members of the ‘Five Eyes’ intelligence partnership, to follow its lead and impose bans on Chinese equipment, and the administration may be surprised at the lukewarm response so far, as many countries, such as Germany, instead say they will tighten their security rules rather than issue bans.

US politicians have warned that they may have challenges working with countries whose infrastructure they do not trust, implicitly threatening a cooling of relations. “Those who are charging ahead blindly and embracing the Chinese technology without regard to our concerns may find themselves in a disadvantage in dealing with us,” said Gordon Sondland, US ambassador to the EU, last month.

But now, other nations may have called their bluff, and US security officials are saying they are now exploring ways to manage any risk posed partners using Chinese kit in their 5G networks or other critical infrastructure. Sue Gordon, deputy director of the US intelligence community, told the LA Times last week: “We are going to have to figure out a way in a 5G world that we’re able to manage the risks in a diverse network that includes technology that we can’t trust. We’re just going to have to figure that out.”

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