5G and the Huawei Apocalypse
Is Ren Zhengfei of Huawei a backdoor man?
This is the trillion-dollar question.
Like other trillion-dollar issues, such as climate change and whether government should maintain detailed control of trade and money, the Huawei issue seems to pivot less on science and facts than on partisan faith.
The Wall Street Journal said this morning that the US government thinks it has an open-and-shut-case that Huawei has retained a “secret capacity to covertly access mobile phone networks.”
Sounds pretty bad. Hey, it’s “secret” and it’s “covert” and “backdoor” and according to the Secretary of State Mike Pompeo, it puts our national security on the line.
This argument seems to replace the previous contention that all Chinese companies are suspect because of a Communist law that they have to cooperate with Chinese government demands.
The new argument bowled over Wall Street Journal reporters with the notion that Huawei somehow illegitimately retains the ability to exploit interfaces to its equipment “mandated by law” for police wiretaps.
How this US law differs from the Chinese requirement that Chinese companies cooperate with national intelligence bodies is a matter for parsing by sophisticated lawyers.
No one denies that the US leads the world in this vital resource.
Telecom networks are managed by telecom companies and remain in the US. Even Huawei gear is full of US-designed components and software. To the extent that these devices can be accessed and tested, they are under the control of Americans.
Preaching to the Choir
The US arguments did not convince British-Conservative Prime Minister Boris Johnson and it has not persuaded the Germans. Both of these US allies are still purchasing Huawei gear and plan to deploy it further in 5G networks. The tech-savvy and defense-oriented Israelis also retain Huawei gear in their networks despite constant pressure from the United States.
By contrast, the Australians and New Zealanders down under have mostly complied with the US policy.
The obvious conclusion is that this outbreak of national security protectionism with trillion-dollar consequences is based on murky evidence.
I do not uphold a principle of “moral equivalence.” I believe that our democratic and capitalist regime is morally superior to the Communist Chinese government and ostensible Marxist ideology.
Nor do I uphold a principle of intellectual equivalence, though. US officials seem to be significantly inferior to their Chinese counterparts in grasp of the basics of engineering and technology.
It is simply stupid for the US to jeopardize the worldwide fabric of trade and technology supply chains on the basis of clouded issues of access to a global network that leaks information everywhere and is constantly hacked by both governmental and criminal parties.
The National Security Administration (NSA) is constantly hacking networks. So is the FBI.
The US has apparently bought into the idea that the new generation of wireless networks is a technology upgrade of such reach and importance that it must be controlled by government. Because 5G is a worldwide standard that has been in the works for a decade, Huawei targeted it early and outperformed all the Chinese state-owned enterprises in developing full turnkey systems for deployment. None the less, the Chinese government now also makes ritual tribute to 5G as a core technology for the future.
My prophecy is that in such a morass of entrenched political involvement the new standard will bog down. It is a hugely complex, expensive, and challenging movement of global networks massively up the spectrum into millimeter waves ultimately as high as 48 gigahertzes and above. These frequencies have properties radically different from the prevailing channels between about one and five gigahertzes. This rollout faces endless security challenges as it is used for the internet of things (IoT), autonomous cars, and artificial intelligence (AI) everywhere.
In order to consummate this agenda, we will need all the help and capital we can get. Like all frontier technologies, this is a worldwide pursuit. No country, including China, is even remotely close to doing it alone. It is not going to be accomplished by US telecoms that are currently less excited by 5G than by their ventures in Hollywood.
One of their chief obstacles is the 5G and Huawei apocalypse theory of the Administration’s advisory gaggle of retired generals, trade warrior economists, and politicians such as Pompeo.
A key rule for investment is to stay away from the hustlers, lawyers, lobbyists and bureaucrats currently infesting the political backdoors to the 5G space.
I’m a “front door” man. As my readers understand, the most important breakthrough potential in 5G is its proposed near doubling of the unlicensed spectrum bands — mostly free of political static — that can be exploited by the new generation of Wi-Fi called WiFi6.
Watch for it here.
Editor, Gilder’s Daily Prophecy