WSJ
6/25/2020
11:34 AM
White House Considers Broad Federal Intervention to Secure 5G Future
wsj.com
The Trump administration has discussed a range of strategies to build competition against Huawei
Trump administration officials have talked about inserting the federal government deep into the private sector to stiffen global competitionagainst Chinese telecom giant Huawei Technologies Co.
The ideas, discussed intermittently with U.S. tech giants, private-equity firms and veteran telecom executives, include prodding large U.S. technology companies like Cisco Systems Inc. to acquire European companies Ericsson ERIC 5.32% AB or Nokia Corp., NOK 5.95% according to people familiar with the matter. In more than one case, they said, the company wasn’t interested in buying into low-margin businesses.
Policy makers have also discussed shoring up Ericsson and Nokia with tax breaks and export-bank financing, or supporting a private-equity group that would take one of the European equipment makers private. Other proposals would support “open” network technology that would make it easier for U.S. startups to develop new technology for 5G equipment.
The ideas show how far the U.S. is willing to go in its fight with China over who will supply the world with advanced technologies.
The pandemic has complicated an already knotty planning process. The White House postponed a planned April 1 meeting on 5G technology with Mr. Trump and executives from U.S. wireless carriers, equipment makers and major tech companies including Dell Technologies Inc., Intel Corp., and Microsoft Corp. after the virus shut down most travel.
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The attorney general later promoted the idea of “integrated open networks,” a concept that allows cellphone companies to mix and match network components from different companies. Today’s carriers generally buy bundles of software and equipment from one supplier for specific cities, stunting competition.
A Justice Department spokeswoman declined to comment further.
Other companies have closed ranks behind the Open RAN Policy Coalition, a new group that advocates for competition in cell-tower equipment. The group, led by wireless carrier AT&T, includes several U.S. software companies seeking a foothold in wireless networks, as well as more established players, including Nokia.
“Some see this as an opportunity to facilitate the creation of an industrial base inside the United States,” said Brian Hendricks, Nokia’s policy chief for the Americas. “The U.S. has been out of the game for a while.”
Mr. Hendricks said the Finnish company’s U.S. research and manufacturing assets will play a role in the future supply chain but acknowledged more competition is inevitable.
Ericsson executives have said they don’t expect to join the policy coalition. The Swedish supplier’s technology chief, Erik Ekudden, said governments shouldn’t interfere with technical work that the private sector is well equipped to handle.
Samsung strategy executive Alok Shah said the South Korean technology giant already manufactures some 5G components in the U.S., including cellular base station chips made at an Austin, Texas, factory.
An AT&T spokeswoman said a more diverse and secure supply chain is a company priority.
To end
DFC chief Adam Boehler said the agency normally prefers to direct investment dollars to U.S. companies but has authority to support non-domestic manufacturers. “We’re not out to play defense,” he said. “We’re out to play offense.”
Even if wireless carriers have access to a more diverse group of vendors, it is unclear whether carriers will buy from new entrants. Some American technology has appeared in networks abroad, such as in Japan and India, but many of those deployments are only a few months old.
U.S. startups including Airspan Networks Inc., Altiostar Networks Inc., Blue Danube Systems, Mavenir Systems Inc. and Parallel Wireless Inc. have developed new technologies. Their executives say they have made some progress but are nowhere close to securing the billions of dollars of orders American cellphone carriers steer each year toward the established hardware companies.
Some U.S. companies see an opening in a recently passed law ordering American carriers to remove “untrusted” Huawei equipment, a technology swap that could generate more than $1 billion in potential sales. The measure still lacks funding.
Altiostar strategy chief Thierry Maupilé said government officials are more familiar than ever with the details of cellular technology but he would like to see more coordination. Mavenir Chief Executive Pardeep Kohli said Washington’s focus on countering Huawei has helped raise the U.S. company’s profile, especially in the past year, though that interest hasn’t yet translated into many pro-domestic policies.
“There’s a lot of talk, but nothing concrete,” he said. |
