Talking Point

Boris breaks ranks on 5G

How Huawei has strained the UK’s ‘special relationship’ with the US

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Johnson’s Huawei decision irked security hawks in Washington

Boris Johnson, who read Classics at university, seems more comfortable looking back to the ancient world than peering ahead to the technologies of the future.

During his stint as London’s mayor he talked up the British capital as a tech hub. But his utterances on next-generation technology were generally limited to requests like the one that smartphone brands build in a ‘kill switch’ that deactivates stolen handsets.

Since becoming UK prime minister the Eton and Oxford educated politician has taken a more expansive tone on technology, including a speech to the United Nations last September on a future where mattresses monitor our nightmares, fridges beep to replenish cheese, and doors swing open as if “some silent butler” is in situ.

Loosely framed, that sounds like the Internet of Things, although Johnson also predicted that a “giant dark thundercloud of data” was “waiting to burst”, adding a sense of foreboding to that pre-election UN address.

So perhaps it was appropriate that one of his first big decisions since his landslide win at the polls in December was whether to allow Huawei, the Chinese telecom giant, to be part of Britain’s digital destiny. And with caveats Johnson will do just that: announcing on Tuesday that Huawei was getting the green light to build a significant portion of the nation’s new telecom networks.

Of course, that was much to the irritation of the Trump administration, which has been campaigning hard for its allies to kick Huawei out completely.

So the pressure to reject Huawei has been intense?

The warnings from Washington are well known, especially the threats to confidentiality in relying on Huawei’s equipment, and the danger that key parts of the economy could be vulnerable to situations where the network is deliberately disrupted or shut down.

Huawei has always refuted the claims of snooping, saying that it has never been asked to intercept internet traffic and that it would refuse if the request were ever made. But its opponents will never be convinced, highlighting that Chinese firms are legally bound to assist the state under national security laws.

In the meantime the world’s developed nations have been taking the plunge on whether to allow Huawei to bid for telecoms contracts. On one side are the countries that have chosen to reject its offer, led by the United States, Australia and Japan. On the other are those that have delayed their decision, including the UK until this week.

In the lead-up to the announcement the Americans ratcheted up the pressure, offering more intelligence said to demonstrate Huawei’s complicity in espionage. Commentators have generally been sceptical about the spying claims, saying that the Americans would have made the evidence publicly available if they really had a smoking gun. But there was no doubting the intensity of Washington’s position, with a stream of senior figures in the Trump administration pleading with the British to do the ‘right thing’.

One of the most recent was Mike Pompeo, the US Secretary of State, who visited London this week. On the eve of his trip he warned that Johnson’s government was on the verge of a “momentous decision”. Pompeo also added: “The truth is that only nations able to protect their data will be sovereign.”

On hearing of Johnson’s bold decision this week to approve Huawei, US Senator Tom Cotton ominously expanded on Pompeo’s warning, even referencing Britain’s historic EU exit at midnight today: “I fear London has freed itself from Brussels only to cede sovereignty to Beijing. Allowing Huawei to build the UK’s 5G networks today is like allowing the KGB to build its telephone network during the Cold War.”

How have the British handled the relationship with Huawei in the past?

British security officials have argued that contracts with Huawei are a risk that can be managed. The Chinese firm has been a supplier to the UK’s telecom network since 2003 and the British established an evaluation centre seven years later to screen Huawei’s code for vulnerabilities. Two years ago the evaluation centre reported that Huawei’s engineering processes were a concern and it complained again last year that some of the issues hadn’t been addressed. “Huawei is shoddy – the others are less shoddy,” its technical director told the BBC in a further putdown.

However, the evaluation team hasn’t found any evidence of “malfeasance” on Huawei’s part and the telecom operators that buy Chinese equipment have taken the same view that there is no sign of subterfuge, as have two UK parliamentary committees, which both examined the issue.

Senior security officials seem relatively sanguine as well, including the head of MI5, Britain’s domestic security service, who argued last week that there was “no reason to think” that there would be a rupture in the relationship with Britain’s allies if it continues to use Huawei technology.

The counterargument is that the UK’s stance is outdated?

The Americans have never been convinced by the British approach, viewing the monitoring programme with growing incredulity (their ambassador to the UK described it as akin to letting kleptomaniacs into your home and hiring three people to follow them around).

British officials have resisted American pressure, even as the Trump administration has been pushing for a more combative stance. The previous UK government under Theresa May was already feeling the heat to take a new ‘security-based’ approach but she shelved her decision. Time then ran out for her successor, who faced an awkward choice at a time when Britain’s departure from the European Union is making it anxious to deepen trade ties with its other major trading partners (including China). As a result, the decision looks like an attempt to find middle ground, designating Huawei as a “high risk” vendor but refusing to exclude it completely.

That won’t appease the US, of course, which will be deeply disappointed that Huawei hasn’t been banned outright and worried that other governments might follow Britain’s lead. There was a similar episode in 2015 when Britain irked Washington and joined China’s Asian Infrastructure Investment Bank. After Britain signed up, a number of European countries scrambled to follow suit – to the chagrin of the US (see WiC442).

Analysts will now watch what happens next, with other nations – most notably Germany – set to announce their own verdict on Huawei in the weeks ahead.

The BBC also expects an almost instant impact on some other equivocating members within the Five Eyes intelligence-sharing partnership, such as Canada. Might it follow the UK’s lead?

How have the British tried to find a compromise position?

The UK’s National Security Council is sticking with its view that the risks can be contained as long as Huawei’s code is scrutinised closely. Indeed, British officials have been briefing that they have a better understanding of the potential risks of doing business with Huawei than others – even the Americans, MI5’s boss told Sky News – because the UK has monitored Huawei’s products for so long.

Johnson’s deal also includes rules that prevent Huawei from taking a dominant position, with the share of the equipment that it can provide capped at 35% of the British 5G network. Other provisions are supposed to reduce the risks further, including clauses that its equipment is interoperable (i.e. it works) with that of other providers.

The UK government, moreover, says it has only given the green light on the basis that Huawei’s role will be restricted to non-core parts of the network. This approach draws a distinction between the antennae and base stations that populate the periphery of the network and the servers at its core that drive the applications where data is collected and deployed. Huawei’s presence will be permitted at the edges of the network, British officials say, but it will be excluded from the core, with encrypted information flowing between the core and the edge, and with the centre maintaining the security of the network around it.

Local carriers BT and Vodafone have made a similar distinction in the past, taking Huawei’s products out of the core areas of their 3G and 4G networks and replacing them with equipment from Nokia and Cisco. The belief is that 5G infrastructure can be treated similarly.

Can the network’s ‘core’ really be segregated from its periphery?

The opposing view is that this is a fundamental misunderstanding of how 5G is going to work as more processing power migrates towards the edges of the network, bringing it closer to the environments where the data is being used.

More data is also going to be cached in base stations and much of the network is going to be virtualised, meaning that it will rely on software running from dynamically configurable hardware.

All of this is going to be important in reducing the risks of delays or disruptions to how 5G-enabled applications work – like the navigation signals that will guide driverless cars, for instance.

But critics of the British decision say the proliferation in computing power will make it much harder to police Huawei’s performance as the distinctions between core and periphery begin to blur. Marco Rubio, one of the most vocal campaigners against Huawei in the United States Senate, made the same point last week in an opinion piece in the UK’s Daily Telegraph. “The strength of 5G is that the core and periphery of a network are one and the same, meaning that giving Huawei any access poses a tremendous risk,” he argued. “Furthermore, the software requirements of a 5G network require an unmanageable amount of code to review for security, creating numerous vulnerabilities for Chinese intrusion. Once the equipment and software are on the system, the question is whether you trust the vendor. Huawei should fail that test.”

Yet there’s still reluctance to block Huawei completely?

There was opposition to Johnson’s decision inside his own government, particularly from Defence Secretary Ben Wallace who was said to have described the Chinese as “a friend of no one” in this week’s meeting of cabinet. A number of members of parliament are also unhappy, fearing the decision will compromise national security and cloud Britain’s relationship with its most important ally (Sky News reported on Wednesday that up to 40 of Johnson’s MPs could revolt in a parliamentary vote on the Huawei question – though that is still far short of destabilising his 80-seat majority).

But 5G services are already being installed in Britain’s bigger cities and a superfast network was one of Johnson’s key pledges during his election campaign. Additionally, much of the initial buildout is layered on equipment installed by Huawei under earlier 3G and 4G standards. Were the Shenzhen firm boycotted telecom carriers would have to rip out the old equipment and buy new kit from other providers. The warning is that the cost and disruption of this would delay the benefits of 5G for several years, with significant damage to the wider economy.

In a telling January 21 column by the Financial Times’ editorial board that newspaper noted that Britain’s 5G rollout would be delayed by two to three years if local operators were forced to eschew Huawei. The FT’s key point was summed up in its headline, where it seemed to indicate – like Prime Minister Johnson – that economic concerns predominated: “Barring Huawei from Britain’s 5G is too costly to justify.”

Indeed a frequent complaint about Washington’s campaign against Huawei is the lack of cost-effective alternative suppliers. “We’ve been asking for almost a year, but there has been no answer at all,” an unnamed UK official told the Financial Times of the American silence on this issue.

Did Trump offer a Plan B?

A measure of how desperate Washington is about the Huawei threat was its proposal of subsidies and other financial support to non-Chinese companies (such as Nokia and Ericsson) to bring down the prices of their 5G infrastructure equipment and make them more competitive with their Chinese rival. The Americans made this unusual move – the first time it has ever proposed subsidising European manufacturers (ironic given all the legal cases between Boeing and Airbus in this space) – hoping it would help to loosen Huawei’s grip.

There was even speculation in the British media this week that Trump would try to forge a new transatlantic partnership by tweeting that the two nations should work together to develop their own 5G giant to rival Huawei. Johnson seemed to play on the point in a phone conversation with the American president on the day his decision to approve Huawei was announced, describing it as a stopgap solution that “underlined the importance of like-minded countries working together to diversify the market and break the dominance of a small number of companies”.

That indicates that Huawei’s foothold in Britain may not last forever, with government sources briefing of a new commitment to having “non high-risk vendors in the system”. Yet this won’t happen overnight, the British press reported, with ministers admitting that it could take at least three years before new entrants come into the market.

How is Washington likely to react?

The initial response from the Trump administration was subdued, saying that it would work with the British on a way forward. But there’s also the threat of punishment for any countries that break ranks, including a new bill in the House of Representatives that would deny US intelligence to nations that use Chinese technology in their telecoms infrastructure.

Opponents argue that legislation like this is counterproductive and that barring Chinese vendors from networking contracts is never going to be the silver bullet that stops snooping through so-called ‘back doors’ in the telecoms infrastructure. As The Economist pointed out last week: “Back doors are a worry but most hackers make do with the accidental flaws that plague all digital devices. Russia, for instance, has no domestic electronics industry to speak of, and thus no ability to insert back doors. That does not hamper its hackers – nor those of Iran and North Korea.”

There’s also a sense of irritation that Washington doesn’t always practice what it preaches – not least in leaving its own loopholes that have allowed US companies to sell billions of dollars of goods to Huawei, despite its designation on an ‘entity list’ intended to restrict business dealings with the Chinese firm. This was supposed to make it harder for companies like Huawei to source crucial components from American suppliers such as Qualcomm, Micron and Intel. Yet many US firms are still making substantial sales into China, often from overseas subsidiaries and typically on the basis that less than 25% of the value of their goods is categorised as a sensitive product.

As a result, Huawei has been able to buy many of the parts that it needs, still spending billions last year on American components.

Stung by Huawei’s resilience in the face of the restrictions, hawks in the Commerce Department have been pushing to lower the threshold to a more onerous 10% of product value, as well as expanding the ruling so that all domestically made content is included. But that proposal got pushback from other parts of the administration – such as the Pentagon – which has argued volubly that these tighter curbs could erode America’s technological advantages rather than safeguard them.

“Commerce officials have withdrawn proposed regulations making it harder for US companies to sell to Huawei from their overseas facilities following objections from the Defense Department as well as the Treasury Department,” the Wall Street Journal reported. “The Pentagon is concerned that if US companies can’t continue to ship to Huawei, they will lose a key source of revenue – depriving them of money for the research and development needed to maintain a technological edge, the people said.”

In that context, US allies wanting to sign contracts with Huawei have another argument to make when Washington calls. They will ask: why should we give the Chinese the cold shoulder when even your own defence department disagrees on how to do business with the telecoms behemoth. It’s a reasonable point.


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