No way, Huawei! Brexit Britain's decision to ban Chinese firm from 5G rollout will please Trump, but cripple the UK's infrastructure future

Profile picture for user cmiddleton By Chris Middleton July 14, 2020
Summary:
The US will be pleased by the UK's decision to cut ties with China's Huawei, but it's an act of Washington-appeasement and digital self-harm for which Brexit Britain will pay dearly.

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In a spectacular own goal, the UK government today bowed to pressure - transatlantic and internally political - to ban Chinese electronics and communications giant Huawei from Brexit Britain’s rollout of 5G networks.  It’s a decision that is owned by US trade restrictions and by UK political perspectives rather than hard facts.

The move to strip Huawei kit out of supporting 5G infrastructures by 2027 was announced today by Oliver Dowden, the UK's Secretary of State for Digital, Culture, Media, and Sport, and marks a significant u-turn by the British government which only months ago was ready to allow the firm some role in the future infrastructure plans.  In a lengthy statement to the House of Commons, Dowden said:

From the end of this year, telecoms operators must not buy any 5G equipment from Huawei. And once the Telecoms Security Bill is passed it will be illegal for them to do so…By the time of the next election, we will have implemented in law an irreversible path for the complete removal of Huawei equipment from our 5G networks.

In the meantime, every mainstream media outlet without fail has talked about “the UK’s 5G network” as though there is some central, government-run infrastructure, the components of which can simply be swapped out at will.  No such network exists; there are multiple 5G networks, with private providers including EE, Vodafone, Three, and O2, together with others that use some of the same infrastructures, including city-wide schemes.

The UK government has now effectively politicised those companies’ entire operations in the UK, dragging them into a wider economic and political dispute and forcing their hands on technology choices. All will now be subject to market forces, and may be pushed into the arms of American suppliers. That, of course, was perhaps the real point of US demands all along?

America, heal thyself?

The great irony, of course, is that countless US technology companies source components from China themselves or have their hardware manufactured in that country.  A non-exhaustive list includes Amazon, Apple, Dell, Google, Hewlett Packard, Intel, Microsoft, Motorola Mobility, and Vizio, which all use Taiwanese supplier Foxconn, whose largest factories and presences are in China. Another customer is US networking hardware giant Cisco, whose own routers and switches are at the heart of numerous communications networks.

The saga behind all this is as murky and cynical as it gets, with pressure from a US government that has everything to gain by hobbling another country’s technology ambitions – in this case, the UK’s – in the course of an ongoing trade war with China, its key economic and political rival - and then throw in current innuendo around COVID-19. ('Kung Flu', anyone?)

The US influence element of the debacle was made explicit in a separate announcement today from the British government, which laid bare the real roots of the problem:

The decision was taken today in a meeting of the National Security Council (NSC) chaired by the Prime Minister, in response to new US sanctions. These were imposed on Huawei in May, after the UK’s initial decision on high risk vendors, and are the first of their kind removing the firm’s access to products which have been built based on US semiconductor technology.

Technical experts at the NCSC reviewed the consequences of the sanctions and concluded the company will need to do a major reconfiguration of its supply chain as it will no longer have access to the technology on which it currently relies and there are no alternatives which we have sufficient confidence in. They found the new restrictions make it impossible to continue to guarantee the security of Huawei equipment in the future.”

In other words, it’s not that Huawei’s kit contains some existing backdoor to the Chinese government, as many have alleged – or at least, none has ever been found, beyond the re-use of common open source components – it’s that the future security of the company’s supply chain cannot be guaranteed, thanks to the US trade restrictions introduced by an electorally-hungry Trump administration. 

In reality, since Huawei began its partnership with BT in the UK back in 2005, all of its activities have been monitored by GCHQ - the UK’s spymasters-in-chief - and by an organisation called The Cell  - more formally, the Huawei Cyber Security Evaluation Centre Oversight Board - near Oxford.

The Brexit Britain price tag

While the move might be politically expedient to critics of the Chinese government, it will have a direct and entirely negative impact on the UK, acknowledged Dowden:

We have not taken this decision lightly. And I must be frank that this decision will have consequences for every constituency in the country. This will delay our 5G rollout. Our decisions in January had already set back that rollout by a year and cost up to a billion pounds. Today’s decision to ban the procurement of new Huawei 5G equipment from the end of this year will delay rollout by a further year and will add up to half a billion to the costs. Requiring operators, in addition, to remove Huawei equipment from their 5G networks by 2027 will add hundreds of millions to the cost and further delay roll out. This means a cumulative delay to 5G rollout of two to three years and costs of up to two billion pounds.

The move was partly triggered at home by vocal criticism of Huawei by senior right wing British political figures, such as Brexit-backing Conservative MP Iain Duncan Smith. However, links between Huawei and the British government deserve much deeper scrutiny. 

For example, the company’s VP of Data Security is John Suffolk, a Brit and the former CIO and CISO of... the UK Government, something that has been the case for years, yet oddly unacknowledged by the mainstream media. Meanwhile, erstwhile advisors to former Prime Minister David Cameron hold senior management positions at Huawei UK.  In fact, co-incidentally, just prior to today’s announcement, Huawei Chairman Lord Browne announced that he is stepping down today, six months before the end of his originally planned tenure.

Huawei itself, which posted over 13% revenue growth during the pandemic, is a long-term partner to BT and its kit is deeply embedded in the UK’s existing communications infrastructure, a reliance which successive post-privatisation political regimes have done nothing to lessen. It is also a major UK employer, which has been investing millions of dollars into the country, despite the looming threat of a No Deal Brexit. Those investments must now surely be in doubt?

My take

No one denies that the Chinese government has adopted a surveillance-led, command-and-control approach to the Internet within its own borders. And no one denies that surveillance of other nations’ communications is an ongoing strategic aim, just as it is for the the UK and the US. 

In this sense, people are right to maintain a degree of reasonable skepticism about the role of Chinese suppliers in the UK, the US, Australia and elsewhere. But France and Germany, for example, aren’t talking about a ban. Why is the UK, especially given its government’s own admission that the decision will set back its 5G ambitions by up three years, at an untold long-term cost to the country’s Industrial Strategy and UK ambitions for fast, low-latency mobile broadband. 

At present, the UK is nowhere in the world league of mobile or fixed-line broadband speeds, and national 5G coverage will be critical to a broad range of new technologies, including robotics, automation, driverless transport, and so on.

So the UK will suffer from this decision – deeply and in the long term. The wider context is an already depressed, pandemic-afflicted economy that is facing the increasingly likely prospect of a No Deal Brexit, leaving the UK with no significant trade deals in place – not to mention likely disruption to supply chains and the regulatory environment in 2021.

China is one of the UK's top five national trading partners, so now is a truly bizarre time to start a trade war with a country that is also the world’s second largest economy, and its manufacturing hub.  The UK is, once again, looking increasingly isolated, and almost entirely at the mercy of the United States - or rather, whoever wins in November....