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A cameraman records during Huawei stream product launch event in Barcelona, Spain February 24, 2020

US drafts rule allowing firms to develop 5G standards with Huawei

Image credit: REUTERS/Nacho Doce/File Photo

The US Department of Commerce is set to sign off on a rule that would allow US companies to work with Huawei Technologies on setting standards for next-generation 5G networks, people familiar with the matter have said.

Engineers in some US technology firms stopped engaging with the Chinese company to develop 5G standards after the Commerce Department blacklisted the company in 2019. The listing left companies uncertain about what technology and information their employees could share with Huawei, the world’s largest manufacturer of telecommunications equipment.

According to industry and government officials, the blacklisting has subsequently put the US at a disadvantage. In standards-setting meetings, where protocols and technical specifications are developed that allow equipment from different companies to function together smoothly, Huawei gained a stronger voice as US engineers sat back in silence.

In May 2019, the Commerce Department placed Huawei on its “entity list” due to concerns regarding national security. The listing restricted sales of US goods and technology to the company and raised questions about how US firms could participate in organisations that establish industry standards.

After nearly a year of uncertainty, however, the department has drafted a new rule to address the issue, two sources told Reuters. The rule, which could still change, essentially allows US companies to participate in standards bodies where Huawei is also a member, the sources said.

The draft is under final review at the department and, if cleared, would go to other agencies for approval, the source said, adding that it is unclear how long the full process will take or if another agency might object.

“As we approach the year mark, it is very much past time that this be addressed and clarified,” said Naomi Wilson, senior director of policy for Asia at the Information Technology Industry Council (ITIC), which represents companies such as Amazon, Qualcomm and Intel Corp.

Wilson added that the US government wants companies nationally to remain competitive with Huawei, but “their policies have inadvertently caused US companies to lose their seat at the table to Huawei and others on the entity list”.

The people familiar with the matter said that the rule is only expected to address Huawei, not other listed entities such as Chinese video surveillance firm Hikvision.

When the Commerce Department added Huawei to the entity list, it cited US charges pending against the company for alleged violations of US sanctions against Iran. It also noted that the indictment alleges Huawei engaged in “deceptive and obstructive acts" to evade US law. Huawei has pleaded not guilty in the case.

“I know that Commerce is working on that rule,” a senior State Department official said. “We are supportive in trying to find a solution to that conundrum.”

Meanwhile, another senior administration official, who also did not want to be identified, said: “International standard setting is important to the development of 5G. The discussions are about balancing that consideration with America’s national security needs.”

In April this year, six US senators - including China hawks Marco Rubio, James Inhofe and Tom Cotton - sent a letter to the US secretaries of Commerce, State, Defence and Energy about the urgent need to issue regulations confirming that US participation in 5G standards-setting is not restricted by the entity listing.

“We are deeply concerned about the risks to the US global leadership position in 5G wireless technology as a result of this reduced participation,” the letter said.

In the telecommunications industry, 5G networks are expected to power everything from high-speed video transmissions to self-driving cars. Industry standards also are big business for telecommunications firms, as each one strives to have their patented technology considered essential to the new standard. This could boost a company’s bottom line by billions of dollars.

However, the ITIC’s Wilson said that the uncertainty has led US-based standards bodies to consider moving abroad, noting that the non-profit RISC-V Foundation (pronounced 'Risk-five') decided to move from Delaware to Switzerland a few months ago.

The foundation oversees promising semiconductor technology developed with Pentagon support and, as Reuters has reported, wants to ensure those outside the US can help develop its open-source technology.

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