U.S. vs. Huawei: Is future of the internet at stake?

U.S. vs. Huawei: Is future of the internet at stake?

21 Feb    Finance News

“The 360” shows you diverse perspectives on the day’s top stories.

What’s happening

Last week, the U.S. government charged the Chinese company Huawei with running a campaign to steal trade secrets from American businesses over the course of two decades. It was the latest move in the Trump administration’s effort to constrain the tech giant, which it considers to be a threat to national security.

Huawei is one of the world’s largest telecommunications companies. Its technology powers networks in more than 170 countries. It is also the second largest seller of smartphones globally. 

In addition to accusations of intellectual property theft, the Trump administration has raised concerns that Huawei’s networks could be used to spy on behalf of the Chinese government — a charge the company denies. Those fears have escalated as Huawei has become a major supplier for the technology behind 5G, the next generation of mobile networks that is designed to serve as the backbone for future innovations like self-driving cars. 

Allowing Huawei to dominate the 5G market would pose “monumental danger” to American interests, Attorney General William Barr said. The U.S. has banned American companies from using Huawei networking equipment since 2012. A rule barring American firms from doing any business with the company is set to go into effect in April. 

Despite strong opposition from the U.S., Huawei’s 5G presence has continued to expand.  

The United Kingdom announced last month that Huawei would build a portion of its 5G infrastructure. Germany is reportedly set to do the same. A few countries, however — including Australia, New Zealand and Japan — have joined the U.S. in banning Huawei.

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Why there’s debate

High-ranking officials in the U.S. government have warned that the information advantage brought by Huawei’s 5G infrastructure could tip the balance of world power in China’s direction. “Huawei technology is a threat to the U.S. and, we really think, to the world order,” Sen. Lindsey Graham, R-S.C., said. Huawei has countered that despite significant efforts by security experts, no “backdoor” into its networks has been found. 

The disagreement has put America’s allies into a tough position in which they must choose between upsetting the U.S. by contracting with Huawei or potentially falling behind in the technology race if they spurn the company. The Trump administration has reportedly worked with U.S. tech companies to accelerate the creation of American-made 5G alternatives. Verizon, the American telecommunications company that owns Yahoo, is providing 5G coverage in some U.S. cities using equipment made by Ericsson, Samsung and Nokia.

Some experts say the dispute could change the fundamental nature of the internet by splitting networks based on politics and geography. Others say the 5G competition is indicative of a larger race between China and the West over who will control the technology that powers the future.

What’s next

The U.S. is reportedly considering further measures to undercut Huawei’s reach, including making it harder for Chinese tech companies to use American-made equipment in their factories. Germany and France are expected to include Huawei in their future 5G plans. Canada is reportedly considering a ban, despite a move by one of its largest communications companies to begin building 5G networks with Huawei equipment. 

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Bans will do little to hold back China’s future tech dominance 

“The proposed quick fix of banning Chinese technology in western countries may offer a degree of increased security, depending on the equipment and networks in question. More broadly though, such tools will do little to interrupt the ongoing economic and innovation achievements of China’s technology leaders.” — Henry Tugendhat, Guardian

The dispute could fundamentally change the nature of the internet

“A full US ban on Huawei products could mark the beginning of the end of a one-world internet. It could calve the world into two separate tech ecosystems, one in North America and parts of Europe and the other across Asia and the Southern Hemisphere.” — Garrett M. Graff, Wired

Chinese surveillance could permeate throughout Europe

“Huawei is a global leader in surveillance cities, exporting its ability to suppress human freedom, including to eager despots. If Huawei wins the contracts to build Europe’s 5G infrastructure, the Chinese government will enjoy unprecedented access to its civilian opponents.” — Annie Fixler and Mikhael Smits, The Hill

The 5G is a sign of how China is outcompeting the West  

“Some people ask how we have got to a position where we are needing to even consider using Chinese technology. The answer is because Western countries failed to think strategically about protecting or nurturing their own full spectrum telecoms industry over the last two decades. Companies went bust or were taken over. Meanwhile Beijing pursued a focused long-term strategy to become a leader in the technology.” — Gordon Corera, BBC

Huawei could be an important technological partner with proper oversight

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“5G will ultimately revolutionize lives, at least in major urban centres. All advanced countries will want to be leaders and innovators, not laggards.The model is one of identifying security risks and mitigating them, not practising blanket bans with serious economic costs more for political and ideological purposes.” — Wesley Wark, Globe and Mail

The U.K. has provided a model for avoiding the worst risks of partnering with Huawei

“Many countries are watching Britain closely on the Huawei move, and they are likely to be relieved to see such a hybrid solution, that is to allow a certain level of Huawei participation while implementing enough mechanisms to guard against potential risks involved.” — Jeremy Paltiel and Wenran Jiang, Toronto Star

Security fears about Huawei are overblown

“Washington has kept insinuating that Huawei poses a security risk to all companies and governments that use its 5G infrastructures. Yet, it has never provided actual evidence despite having searched high and low for it.” — Alex Lo, South China Morning Post

Intelligence-sharing between the U.S. and allies could be compromised

“If the United States did halt sharing intelligence with key allies … it would be a momentous move with dramatic national security consequences.” — Joseph Marks, Washington Post

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Photo illustration: Dado Ruvic/Reuters

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