U.S. security concerns could stall Huawei’s and ZTE’s 5G expansions



Will U.S. citizens get their first 5G phones from Huawei or ZTE? Not if Congress has its way.

Over the past week, members of Congress have been getting tough on the two Chinese companies, formally identifying both as threats to national security following years of investigations. Today, Reuters reported that unidentified U.S. lawmakers asked AT&T to stop collaborating with Huawei on standards for its next-generation 5G network, and cut ties to Huawei altogether.

The report follows U.S. Representatives Michael Conaway’s and Liz Cheney’s introduction of the Defending U.S. Government Communications Act, a bill to bar the U.S. government from using or contracting with Huawei and ZTE, after a House intelligence committee report concluded that their products were insecure for government and military use.

In the works since well before a September House hearing on Huawei and ZTE, the Congressional actions appeared to coincide with ZTE’s claim at CES that it would launch its first 5G phone in the United States by early 2019 and AT&T’s unexpected decision to kill plans to start selling Huawei phones in this country.

Today’s report suggests that AT&T walked away from Huawei under pressure from government regulators, who were most likely lobbied by the same members of Congress involved in the investigation. It’s unclear whether or how much AT&T was collaborating with Huawei on 5G; the company was reportedly working with Qualcomm and Ericsson prior to announcing its end of 2018 5G network plans, but could easily have had other partners.

There is good reason to be concerned about the security of cellular networks. As VentureBeat reported last week, the upcoming U.S. launches of two 5G networks will mark the beginning of a long-planned drive to put 5G cellular radios everywhere, and within everything.

Designed to add connectivity to billions of devices — securely — 5G is also expected to serve as the networking technology inside next-generation cities and car traffic infrastructures. Consequently, if a foreign government had a secret back door to infiltrate 5G networks, it could take control of entire cities, including all of their 5G-connected devices and vehicles.

That nightmare scenario is the flip side of the “ubiquitous 5G” dream, and the precise reason 5G was built with new security protocols. As Ericsson noted in a 5G security white paper, the ubiquity of 5G will turn virtual vulnerabilities into tangible public safety threats, so 5G networks demand extra protections: integrated attack resistance, multiple layers of encryption, integrity protection against injection or modification of traffic, and authentication superior to username/password combinations, just to name a few. Today, LTE networks running compromised equipment or software can be susceptible to intrusions, and even networks with solid hardware can be taken down by one or more inexpensive devices.

While Trump administration protectionism might otherwise be blamed for the recent Congressional actions, investigations into Huawei’s and ZTE’s potential threats to critical U.S. infrastructure date back to at least 2012, when 60 Minutes and the aforementioned House report spotlighted the concerns. Although ZTE and Huawei are supposedly private companies, ZTE is state-owned and was founded by investors associated with China’s aerospace ministry; Huawei was started by an ex-Chinese military engineer, and has what has been described as an “opaque” corporate structure. Both are suspected of covert ties to the Chinese government, and neither would explain why Chinese Communist Party committees had been set up within their business structures.

In recent years, both companies have been investigated for breaking U.S. laws: Huawei has been accused of assisting an alleged elite cyberwarfare unit of China’s army, as well as bribery, corruption, and immigration violations, while ZTE pled guilty to selling sanctioned computer equipment to Iran, and allegedly obstructed an investigation into the sales.

At the same time, both companies are in the top five for global telecom equipment sales, with significant supply contracts for overseas governments. Their continued growth depends in part upon the United States market, but given the directions Congress is taking, the likelihood of seeing either company making major inroads here has just dropped significantly.

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