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Huawei conundrum starts heating up (again)

In among the trade war rhetoric, 5G launch announcements, privacy scandals and smartphone rumours, the UK is also supposed to be making a decision on the fate of Huawei.

Despite the Supply Chain Review being one of the most critical decisions in recent history of the UK’s telecommunications industry, it seems to have become background noise as the Government has become so well-practiced at kicking the can. However, the debate is rearing its head once again as US diplomats are in town for a lobby mission and the MI5 declares it isn’t that worried about the threat of US intelligence starvation.

“Perhaps the thing that needs more focus and more discussion is how do we get to a future where there’s a wider range of competition and a wider range of sovereign choices than defaulting to a yes or no about Chinese technology,” said Sir Andrew Parker, Director General of the MI5, the UK’s domestic counter-intelligence agency.

Sir Parker was surprisingly upbeat about the situation, despite the threats moving from chest-beating to a paper trail.

Last week, the Republican Senator for Arkansas, Tom Cotton, presented a new bill to Congress which would officially ban the US from sharing intelligence with any country which had Huawei components or equipment in telecommunications infrastructure. Should this bill pass into law, this would no-longer be considered an idle threat, but a piece of legislation the US Government would (theoretically) be forced to obey.

But speaking to the Financial Times, Sir Parker has said he does not feel there would be any reason the data-sharing relationship between the US and UK would be in jeopardy. The intelligence chief believes relationships between the ‘Five Eyes’ nations are the strongest ever, and this is not going to change in the near future.

That said, it is difficult to understand where Sir Parker’s optimism originates. Perhaps he assumes the bill will not pass to law, or there is some clause in US law which would supersede the bill? Or perhaps the intelligence community will just revert to back channels and secretive communications? As you can see from the extract below, the bill does not leave a lot of wiggle room.

“(a) PROHIBITION – Intelligence of or under the control of the United States, including intelligence products of the intelligence community, may not be shared with any country that permits operation within its national borders of fifth generation (5G) telecommunications technology of Huawei Technologies Co. Ltd.”

The above text is quoted directly from the bill introduced to Congress by Senator Cotton last week. It is very explicit and does not leave much (or any) room for interpretation.

Sir Parker seems to be leaning on the idea that everything will be fine as long as Huawei is excluding from the network core, though there is no evidence to support the US would agree to this state of affairs. The US does not seem to buy into the idea that risk can be mitigated by separating the network into dumb (radio and transmission) and intelligent (core) segments. This is a popular idea in the UK, which has gained traction in the industry.

Alongside Sir Parker’s comments, a US delegation is currently in London to hold discussions with Prime Minister Boris Johnson and senior officials on the future of Huawei in the UK. As with other visits from US representatives, this delegation is very much likely to be pushing for a complete ban.

The US stance in this equation is not very difficult to guess, but when the UK might actually say something material is. Some are expecting a decision on whether the telcos can buy components and equipment from Huawei will be made this month, though considering the track record, it is perhaps just as likely to see another delay.

After being debated for what seems like years, the UK telco industry is no clearer on what the outcome will be. After Matt Hancock was replaced by Jeremy Wright as the Secretary of State for Digital, Culture, Media and Sport (DCMS), Wright decided to delay any decision as there was a change of leadership in Downing Street. Once Johnson had settled in as PM, the decision was again delayed due to the General Election in December.

The current Secretary of State for DCMS Nicky Morgan complicated matters by stating she would no-longer be standing as an MP at the General Election, but the decision to make her a Life Peer allowed her to continue leading the department.

The current political landscape is a mess, largely thanks to the B-word. It does appear that there might be a decision in the immediate future, though we are just as likely to be waiting until the summer. That will certainly be getting the telcos a bit twitchy.

 

UPDATE 13:00 14/1/20: In a live TV interview this morning the UK Prime Minister hedged his position when asked about Huawei and 5G by asking those who would ban Huawei to suggest an alternative (a couple at least spring to mind). On the other hand he said he doesn’t want any infrastructure that will threaten UK security or deny it access to the Five Eyes intelligence network.

Subsequently Victor Zhang, Vice President of Huawei, issued the following statement: “We strongly agree with the Prime Minister that ‘the British public deserve to have access to the best possible technology’. That is why we invested more than $15 billion last year in research and development to ensure our customers receive just that. Huawei has worked with the UK’s telecoms companies for 15 years and looks forward to supplying the best technologies that help companies like BT and Vodafone fulfill the government’s commitment to make gigabit broadband available to all.

“We are confident that the UK Government will make a decision based upon evidence, as opposed to unsubstantiated allegations. Two UK parliamentary committees concluded there is no technical reason to ban us from supplying 5G equipment and this week the Head of MI5 said, there is ‘no reason to think’ the UK’s intelligence-sharing relationship with the US would be harmed if Britain continued to use Huawei technology.”

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