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Blocking Huawei’s 5G could isolate Australia from future economic opportunities


Marina Yue Zhang, Swinburne University of Technology

Trade conflict between the US and China has accelerated towards the brink of trade war.

A recent Trump executive order preventing US companies from working with “adversaries” (China fits this description) was hammered home by a ban on selling US high-tech products to Chinese tech company Huawei.




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Blocking Huawei from Australia means slower and delayed 5G – and for what?


Australia too has put a halt on 5G infrastructure coming from China.

But this is about more than just which company’s poles and wires will provide internet for your phone and movie downloads in the future.

Choices the US, Australia and other nations make around how they set up 5G will determine how we use technology for collaboration, innovation and global business.

Huawei’s 5G is becoming a global standard

5G is the fifth generation network for mobile connectivity. It has been described as “game changing” due to high speeds and high capacity, and provision of superior service to high numbers of users.

5G relies on standardisation – the technical specifications used in mobile networks – supported by patents and licensing agreements.

In mobile networks, standard essential patents (SEPs) are those patents that any company will have to license when implementing 5G. History suggests companies holding SEPs benefit significantly from royalties.

Data from April 2019 shows China, collectively, owns over one-third of the world’s SEPs for 5G.

China lost its opportunity in 1G and 2G, learned an expensive lesson from its failed 3G standard, and achieved substantial catch-up in 4G. It is determined to lead in 5G.

Chinese tech companies such as Huawei and ZTE understand that transition to 5G opens a window of opportunity for them to achieve this goal. To do this they need to build followers – and momentum is already moving in this regard.

By the end of March 2019, Huawei had reportedly been awarded 40 5G commercial contracts from carriers around the world (including 23 from Europe, six from the Asia Pacific, ten from the Middle East and one from Africa).

The battle of radio spectra

In addition to standardisation, radio spectrum is another critical factor in 5G. Radio spectrum is a limited resource that is used for communications from Earth to space.

Spectrum allocation is at the heart of 5G competition.

Huawei’s 5G technology has been developed for mid-band spectrums which are available for commercial use in many countries, including Australia.

The best plan for Australia is that mid-band solutions be used to cover the bulk of 5G networks, with high-band technologies to provide complementary coverage in densely populated areas.

The US has limited access to mid-band spectrums for commercial 5G, as most in this range are for defence use. So the US developed its 5G technologies for high-band spectrums – which presents that country with a dilemma.

It is not easy for the US to switch from high-band to mid-band 5G in a short time. And it’s not likely the rest of the world will give up using mid-band solutions, which provide wider coverage and require less investment in infrastructure.

A short-term answer is for the US to push its allies to jointly exclude Huawei from their 5G networks. This might be sought to protect the US from 5G “isolation”, and perhaps have other commercial or political implications – or a combination of these factors.




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The consequence is that Australia, as one of those allies, would likely need to spend more money on base stations and the necessary infrastructure and wait a longer time for a fully operational 5G system.

For example, a Huawei 5G base station is only one-third the size of its 4G equivalents and weighs only 20 kilograms: it’s easier to install, and the technology is at least 18 months ahead of its competitors such as Nokia. This advantage is lost if Australia continues to block Huawei.

Australia’s fourth mobile telco, TPG, argues that there is “no credible case” to rollout its 5G as planned without Huawei.




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Fractured globalisation?

5G will support many applications such as industry automation, self-driving cars, massive machine-to-machine communications, internet of things, smart cities and more.

This means the growth of 5G will accelerate development of an ecosystem in which different countries can co-exist and co-develop, supported by interconnected and interdependent supply chain networks.

Such ecosystems are built on mobile network infrastructures, upon which are layered technology platforms for manufacturing, medical treatments and payments (for example) and then applications for working, studying and living.

For example, in the future this sort of system might be used by Australian and Chinese academics and industry experts to work together on innovations related to health care, environmental protection or industrial automation.

But this may fall down if the involved countries build their 5G infrastructures differently.

Australia’s final 5G plan could have profound implications for Australia’s economic development into the future.The Conversation

Marina Yue Zhang, Associate Professor of Innovation and Entrepreneurship, Swinburne University of Technology

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Blocking Huawei from Australia means slower and delayed 5G – and for what?


Stanley Shanapinda, La Trobe University

The United States and Australia are deliberately restricting the place of Chinese telco Huawei in their telecommunications landscapes.

We’re told these changes will be worth it from a security point of view.




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But Huawei infrastructure is already ubiquitous in telecommunications networks, and we have other avenues available to us if we’re concerned about cybersecurity.

In the end, halting involvement of Huawei in Australia will be felt directly by customers. We will have to be satisfied with below-par 5G internet speeds and delayed service rollouts.

And we probably won’t be able to use Google Play on Huawei smart phones after 2020.

Huawei offers the best 5G

5G is a mobile phone network that promises top speeds, especially in highly populated areas. Australia has been expecting the network to be broadly up and running by around 2020 – there is limited availability in some central business districts right now.

Top 5G speeds can reach up to 10 gigabits per second, 20 times faster than 4G. This means movie downloads in a matter of seconds – as opposed to minutes with 4G. A mobile phone, gaming laptop or smart TV can communicate with a 5G network at a response speed of 1 millisecond, as opposed to 30 milliseconds with 4G.

Huawei, the world’s biggest manufacturer of telecommunications equipment, is leading the 5G race. The Chinese company is around 12 months ahead of its competitors Nokia and Ericsson.

Huawei has been involved in providing 3G and 4G services in Australia since 2004 – reportedly working with Vodafone and Optus, but not Telstra or NBN Co. Huawei built a private 4G network for mining company Santos, and digital voice and data communication systems for rail services in Western Australia and New South Wales. This includes radio masts, base stations and handheld radios, but not the core network.

But Huawei was restricted from participating in future development of Australia’s and the US’s telecommunications networks from August 2018 and May 2019, respectively.

This stems from apparent Australian and US government concerns that Huawei infrastructure could allow the Chinese government to collect foreign intelligence and sensitive information, and sabotage economic interests.




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Costs passed on to consumers

Australia’s telecommunications networks have already felt the impact of the Coalition’s Telecommunications Sector Security Reforms announced in August 2018.

These reforms “place obligations on telecommunications companies to protect Australian networks from unauthorised interference or access that might prejudice our national security”.

The guidance effectively put the companies on notice, implying that use of Huawei could violate cybersecurity laws. No company wants to be in such a position. Continuing with Huawei after being informed that the company may pose a national security risk could bring legal and reputational risks.

The result is companies such as Optus and Vodafone were left scrambling to re-negotiate 5G testing and rollout plans that had been in the works since 2016. Optus has already delayed its 5G roll out.

Most operators do use additional manufacturers such as Nokia and Ericsson for networks and testing. But it’s already clear from cases in Europe that such companies have been slow to release equipment that is as advanced as Huawei’s.

Costs incurred by such changes and the delays in rolling out high-quality services are absorbed by mobile phone companies in the first instance, and eventually passed on to the consumer.

Given existing frustrations with the NBN, customers will continue to wait longer and may have to pay more for top 5G services.

Customers who prefer to use Huawei-made phones could be hit with a double whammy. Recent actions by Google to suspend business operations with Huawei could prevent these customers from having access to Google Play (the equivalent of Apple’s app store on Android devices) in the future.

Huawei is already here

It’s no secret that China’s foreign intelligence-gathering over the internet is increasing.

But it’s doubtful Huawei has assisted such efforts. Technical flaws detected in Italy are reported to be normal in the sector and not due to a backdoor.

Germany has decided to introduce a broad regulatory regime that requires suppliers of 5G networks to be trustworthy, and provide assured protection of information under local laws.

A similar approach in Australia would require telecommunications equipment to be tested before installation, and at regular intervals after installation for the lifetime of the network, under a security capability plan the supplier is required to submit.




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More broadly speaking, the Coalition has pledged A$156 million to cybersecurity, aimed at developing skills to defend against cyber intrusions and to improve the capabilities of the Australian Cyber Security Centre (ACSC). These plans could reasonably be timed with the expected launch of 5G at the end of 2020.

Added to this, the 2018 Assistance and Access Act – commonly referred to as the Encryption Bill – already requires all telecommunications manufacturers to protect their networks and assist national security and law enforcement agencies to share information. Huawei is subject to this legal obligation.

If there are security fears about 5G, those same fears would exist in respect of 4G that has been installed and is supported by Huawei in this country for more than a decade.

It’s not clear what we gain by blocking Huawei’s involvement in Australia’s 5G network.The Conversation

Stanley Shanapinda, Research Fellow, La Trobe University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Huawei or the highway? The rising costs of New Zealand’s relationship with China



File 20190219 129545 fuc4q0.jpg?ixlib=rb 1.1
New Zealand’s Prime Minister Jacinda Ardern meeting with the Premier of the State Council of the People’s Republic of China Li Keqiang during last year’s ASEAN summit.
AAP Image/Mick Tsikas, CC BY-ND

David Belgrave, Massey University

Until recently, New Zealand’s relationship with China has been easy and at little cost to Wellington. But those days are probably over. New Zealand’s decision to block Huawei from its 5G cellular networks due to security concerns is the first in what could be many hard choices New Zealand will need to make that challenge Wellington’s relationship with Beijing.

For over a decade New Zealand has reaped the benefits of a free-trade agreement with China and seen a boom of Chinese tourists. China is New Zealand’s largest export destination and, apart from concerns about the influence of Chinese capital on the housing market, there have been few negatives for New Zealand.

Long-held fears that New Zealand would eventually have to “choose” between Chinese economic opportunities and American military security had not eventuated.




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But now New Zealand business people in China have warned of souring relations and the tourism industry is worried about a downturn due to backlash following the Huawei controversy.

China’s growing might

During Labour’s government under Helen Clark (1999-2008) and under the National government with John Key as prime minister (2008-2016), New Zealand could be all things to all people, building closer relationships with China while finally calming the last of the lingering American resentment over New Zealand’s anti-nuclear policies. But now, there are difficult decisions to be made.

As China becomes more assertive on the world stage, it is becoming increasingly difficult for New Zealand to keep up this balancing act. Two forces are pushing a more demanding line from Beijing. One is China’s move to assert more control over waters well off its coast.

For decades, Beijing was happy to let the US Navy maintain order over the Western Pacific to facilitate global trade with China. As China’s own economic and military abilities have grown, it has begun to show that it is willing to protect what it sees as its own patch. Its mammoth island building in the South China Sea is a testament to its new-found desire to push its territorial claims after decades of patience.




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Despite strong words, the US has few options left to reverse China’s gains in the South China Sea


China’s stronger foreign policy is testing what is known as the “rules-based order”, essentially a set of agreed rules that facilitate diplomacy, global trade, and resolve disputes between nations. This is very concerning for New Zealand as it needs stable rules to allow it to trade with the world. New Zealand doesn’t have the size to bully other countries into getting what we want.

Trump-style posturing would get New Zealand nowhere. A more powerful China doesn’t need to threaten the rules-based system, but the transition could create uncertainty for business and higher risks of trade disruption. It is vital for New Zealand that an Asia-Pacific dominated by China is as orderly as one dominated by the US.

Tech made in China

The other force challenging the relationship is China’s emergence as a source of technology rather than simply a manufacturer of other countries’ goods. Many Chinese firms like Huawei are now direct competitors of Western tech companies. Huawei’s success makes it strategically important for Beijing and a point of pride for ordinary Chinese citizens.

Yet, unlike Western countries, China actively monitors its population through a wide variety of mass surveillance technology. Therefore, there is a trust problem when Chinese firms claim that their devices are secure from Beijing’s spies. New Zealand’s decision to effectively ban Huawei components from 5G cellular networks could be the first in many decisions needed to ensure national security.

Chinese designed goods are becoming more common and issues around privacy and national security will get stronger as everyday household goods become connected to the internet. Restrictions on Chinese-made goods will further frustrate Beijing and will invite greater retaliation to New Zealand exporters and tourist operators.

In more extreme cases, foreign nationals have been detained in China in response to overseas arrests of prominent Chinese individuals. As many as 13 Canadians were detained recently in China following the arrest of Huawei’s CFO Meng Wanzhou in Vancouver at the request of US prosecutors.




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Australian-Chinese author’s detention raises important questions about China’s motivations


Declaring the limits of the relationship

If New Zealand is to maintain a healthy relationship with China, it needs to be clear on what it is not willing to accept. It is easy to say individual privacy, national security and freedom of speech are vital interests of New Zealand, but Wellington needs to be clear to its citizens and to China what exactly those concepts mean in detail. All relationships require compromise, so Wellington needs to be direct about what it won’t compromise.

New Zealand spent decades during the Cold War debating how much public criticism of the US the government could allow itself before it risked its alliance with the Americans. New Zealanders wondered if they really had an independent foreign policy if they couldn’t stand up to their friends. Eventually nationalist sentiment spilled over in the form of the anti-nuclear policy.

New Zealand is now heading for the same debate as Kiwis worry about how much they can push back against Beijing’s interests before it starts to hurt the economy. Now that the relationship with China is beginning to have significant costs as well as benefits, it’s probably time New Zealanders figured out how much they are prepared to pay for an easy trading relationship with China.The Conversation

David Belgrave, Lecturer in Politics and Citizenship, Massey University

This article is republished from The Conversation under a Creative Commons license. Read the original article.