China, the United States… and the war to control 5G
Following the last-minute announcement at CES by US telecommunications giant AT&T, under pressure from the White House, to pull out of a distribution deal with Huawei, meaning that Americans will only be able to use the Chinese company’s smartphones if they purchase them independently (almost 90% of smartphones in the United States are still sold through operators’ packages) due to fears about their possible use for espionage, the US government is now considering nationalizing the country’s 5G network, which it would allow operators to use and charge customers for.
The reason for this policy volte face is a fear of China controlling the country’s 5G network, fundamental for the deployment of all kinds of technologies. The proposal, in the form of a PowerPoint presentation and a 30-page report still in the early stages of circulation in government, highlights the importance of 5G networks, comparable to the national highways construction project carried out by Eisenhower in the 1950s, and reflecting what the United States stands to lose in political, economic and military terms if the transition from 4G to 5G is carried out predominantly with Chinese technology. In fact, the report defines China as the leader in the manufacture and operation of network infrastructures, and also as the “dominant malicious actor in the Information Domain”.
US operators already are already advancing in their development of 5G. The decision would undoubtedly be a blessing for non-Chinese 5G infrastructure competitors such as Qualcomm, Cisco, Juniper, Nokia, Samsung or Ericsson, which in some cases have lost component supply contracts in the face of the competitiveness and drive of Chinese companies.
The US is on the brink of a trade war of the kind the Trump administration has shown an appetite for, but there is more behind this: awareness that 5G is the future, and a determination to prevent that future from being dominated by foreign companies. In the face of Chinese expansionism, made clear at the XIX Congress of the Communist Party in that “the world needs China”, the US reaction might be to circle the wagons and veto China and its companies from the construction of 5G infrastructure, converting the initiative into a strategic goal, building it within three years and making it public infrastructure so as to ensure control over it.
There is little hard information so far. Reports like that published in Axios could end up becoming government plans or be abandoned at any phase in the process, while the idea of committing billions of dollars to build public infrastructure, despite its appeal to someone like Donald Trump, goes very much against the strategy in the United States and other countries of encouraging private initiatives for many years. On the other hand, state-owned infrastructure would in theory provide much greater control, reflecting the surveillance mentality of this administration.
Nationalized infrastructure in the world’s leading capitalist democracy, protectionism to keep Chinese companies out and concerns about spying: all herald big changes in world leadership: but what does it say about who is the weaker and who the stronger?
(En español, aquí)