January 8, 2021 — Outgoing Federal Communications Commission Chairman Ajit Pai recalled a shift in American views towards China, which he says largely occurred over the course of his past four years in office, during an interview with the Center for Strategic and International Studies on Wednesday.
“The United States government’s orientation toward geopolitical threats and the FCC’s orientation toward national security were entirely different before I came into office,” said Pai.
The official position of the U.S. government during the previous Administration was that the United States “welcomes the rise of a China that is stable, prosperous and peaceful,” and that “our two great nations, if we work together, have an unmatched ability to shape the course of the century ahead.”
The Obama FCC issued a white paper on cybersecurity on January 18, 2017, two days before Inauguration Day, that didn’t mention China at all.
“Things are different now—much different,” said Pai, adding that Americans today hold increasingly negative views of China.
Pai referenced statistics, saying “In the U.S., the percentage of people with an unfavorable opinion of China increased from 60 percent to 73 percent over the past year.” He questioned where the sentiment came from.
The change may be a result of China ‘showing its hand’ over past years, as the People’s Republic of China aimed to have more of a stake in publicly-available technology. There is increasing recognition that the Chinese state government is using its growing influence over global commerce to become a leading international tech supplier.
In May 2015, China’s State Council issued Made in China 2025, a national strategic plan to further develop the manufacturing sector of the PRC, by upgrading the production capabilities of Chinese industries from labor-intensive workshops into more technology-intensive powerhouses.
To help achieve independence from foreign suppliers, the initiative encourages increased production in high-tech products and services, with its semiconductor industry central to the plan, partly because advances in chip technology may “lead to breakthroughs in other areas of technology, handing the advantage to whoever has the best chips.”
In response, in 2018, the Council on Foreign Relations, an American think tank, stated that MIC 2025 is a “threat to U.S. technological leadership.” In June 2018, the Trump administration imposed higher tariffs on Chinese goods, escalating trade tensions between China and the U.S. The tariffs primarily apply to the manufactured goods included in the MIC 2025 plan, such as those integral to IT and robotics industries.
Pai’s FCC has played a known role in promoting anti-China rhetoric. Over the past four years, the FCC has gone from essentially not acknowledging China to holding a bipartisan consensus that the PRC poses national security threats to U.S. communications infrastructure.
The Trump FCC has hyper-focused on issues related to larger, geopolitical U.S.-China altercations, such as Pai’s ‘Rip and Replace’ and ‘open radio access networks’ initiatives, promotion of rhetoric surrounding a ‘5G race’, signaled approval of blocking TikTok and WeChat, and more.
Under Pai, the FCC prompted and largely completed ‘Rip and Replace’ initiatives, which barred, and further ordered the removal, of telecommunications equipment from Chinese manufacturers, like Huawei and ZTE, in U.S. networks.
Pai’s FCC further prioritized streamlining 5G deployments, through pole citing and other infrastructure provisions, in what became the ‘race to 5G’ between the U.S. and China. Pai’s open RAN initiative, announced in September 2020, mirrors MIC 2025, in the sense that it attempts to reignite American tech manufacturers to lead in software and hardware development to support 5G.
“As part of the FCC’s 5G FAST Plan, the agency has taken many actions to promote American leadership in next generation wireless services,” said Pai. “To that end, we want the United States to lead the way in researching and developing innovative approaches to mobile network deployment.”
Pai says U.S. manufacturers are having a hard time competing with Huawei
“As this market has consolidated, Huawei is in a position of strength,” said Pai.
In conversation with CSIS President and CEO John Hamre, Pai compared American company’s attempting to compete with Huawei, which is directly subsidized by the Chinese government, to fighting with “one-hand tied behind your back.”
“China’s subsidizes Huawei which gives them a leg up,” said Pai, adding that Huawei wireless equipment is often 30 to 70 percent cheaper than technology from competitors Ericcson and Nokia.
“We’re trying to address things defensively, by taking Huawei equipment out,” said Pai, going on to detail the U.S. strategy for a strong offense. “Given that we have an advantage in software, and given that open RAN technologies generally have shown great promise, why don’t we pursue that area as well to enable us to break that consolidation, which has given Huawei an advantage.”
Pai noted that in order to compete with Huawei, the U.S. must build at a certain scale, and continually invest in research and development.
Huawei’s Success In China A Win For Washington, Expert Says
The Chinese telecom giant is finding greater financial success on home turf, keeping it away from the U.S.
April 16, 2021— The Biden administration’s current maintenance of the previous government’s policy on isolating Chinese technology companies is appearing to pay off, according to experts.
Huawei, which has become the American symbol of alleged Chinese espionage, has seen increasing success in its home country of China, which is where the U.S. wants it to stay, experts say.
“The more you isolate Chinese tech companies, the more the [Chinese] government keeps them at home,” said “Splinternet” author and journalist Scott Malcomson at a Techonomy panel on Wednesday. He added that this strategy is beginning to pay off, citing the Chinese market now being more profitable for Huawei than going abroad.
The United States has instituted a number of restrictions against Chinese telecommunications companies like Huawei and ZTE, which has forced these companies to pivot.
He described China’s “soup to nuts” effort to establish a completely independent network: everything from satellites, to undersea fiberoptics, to e-commerce companies—China’s primary goal was to be able to handle all these sectors domestically.
Joy Tran, who is senior vice president of public affairs for Huawei Technologies USA, corroborated the company’s domestic success, saying the Chinese market is now the biggest part of Huawei’s portfolio, which makes up 65 percent of its global revenue.
But Tran also said the company has always been completely compliant with Chinese and American law. “The US government really never told us about their concerns—we don’t understand [why Huawei is restricted from U.S. networks].”
Tran stated that Huawei has never had any “cybersecurity related issues,” and pointed to Huawei’s long-term operation in the U.K. as evidence that Huawei is not a bad-faith actor. Huawei also has deep relationships with academic and government institutions in Canada, which is the only country in the Five Eyes intelligence pact – which includes the U.S., Australia, New Zealand, Australia – that has yet to make a determination about whether to ban Huawei from parts of its 5G networks.
Security concerns with Huawei
Tran also attempted to dispel the notion that the Chinese government forced Huawei to maintain backdoors into their hardware and software for spying purposes.
Though the U.S. government has long maintained the opposite, Malcomson argued that the point was moot. “Frankly, if you have a front door, you don’t really need a back door.” Malcomson said that the backdoor argument was merely a red herring that distracted from China’s aspirations and behaviors it had engaged in over the past several years.
Zachary Karabell, another author and former head of a financial services firm, argued Wednesday that the ongoing duel between the U.S. and China over Huawei’s standing was emblematic of the entire U.S.-China relationship.
Karabell’s position is that the question needed to be reframed: the question that needs to be asked is not, “Is the U.S. spying on China and is China spying on the U.S.?” The answer is clearly, yes.
The question that Karabell believes has not been sufficiently addressed is whether the production of equipment and the location of where said equipment is produced offers a competitive edge for intelligence gathering efforts.
Loopholes Allowing Private Purchase Of Chinese Goods Must Be Closed: Commissioner Carr
April 5, 2021 – Loopholes that allow U.S. companies to use private funds to purchase equipment from Chinese-based companies like Huawei and ZTE should be closed, Federal Communications C Commissioner Brendan Carr said Tuesday.
Carr said last week at a virtual event hosted by the Center for Strategic and International Studies that while the U.S. government has been able to prevent companies from spending federal dollars on Chinese telecom equipment, legal loopholes still persist that allow companies to use private funds to purchase such equipment, leaving agencies like the FCC helpless in preventing these transactions.
Communist China has made it clear it wants to dominate the global semiconductor and chip market, and it is not opposed to using forced labor to achieve that goals. Be it garage door openers or computers, nothing should be allowed if it has ties to Uighur-related forced labor, Carr said.
“The CCP is committing genocide—crimes against humanity—in Xinjiang,” he noted.
Carr spoke broadly about the continued threats Chinese telecom equipment poses to U.S. national security interests.
Secretary of State Antony Blinken outlined the new Biden administration’s strategic vision for U.S. foreign policy and identified China as the top geopolitical challenge facing the United States.
Commissioner Carr said there are bipartisan commitments to address threats from China, and that the FCC can continue to take steps to protect the U.S.’s 5G network infrastructure, including moving to block approval of devices that contain parts made from companies with ties to “Communist China,” or forced labor from places like Xinjiang.
FCC February Meeting Targets 911 Fee Diversion and Replacing Foreign Telecommunications Equipment
February 17, 2021 – The Federal Communications Commission adopted two proposals in Wednesday’s meeting: Seeking comments on rule changes for 911 fee diversion, and also the secure and trusted network reimbursement program.
The first proposal seeks comment on a 911 fee diversion rule that would define what constitutes a diversion of those funds from their intended use. Part of the Consolidated Appropriations Act of 2021, passed in December 2020, requires the FCC to issue these rules. Fees from 911 are levied by state and local governments to help pay for the operating costs of emergency services, which consumers pay through their phone bills.
The rule change intends to prevent states from diverting some of those funds for purposes other than 911 operations.
“Both Congress and the commission have long recognized that 911 fees should serve 911 purposes and have worked to combat fee diversion,” said Commissioner Geoffrey Starks.
According to the FCC’s 2020 report, five states diverted over 200 million dollars from the 911 fees they collected. The vast majority of fee diversions occur in New York and New Jersey, according to National Emergency Number Association’s Brian Fontes.
The second proposal seeks comment on the secure and trusted network reimbursement program, which subsidizes funds to companies for replacing communications equipment due to national security concerns.
Several of the commissioners expressed concern about Chinese companies Huawei and ZTE technologies being used in the United States due to their ties to the Chinese government.
The Consolidated Appropriations Act of 2021 allocated $1.9 billion to “remove, replace, and dispose of communications equipment and services that pose a national security threat,” said the FCC’s news release.
Both proposals received 4-0 affirmative votes.
Also notable during Wednesday’s meeting was Acting Chairwoman Jessica Rosenworcel’s announcement of a new task force to address poor broadband mapping data. Jean Kiddoo was named chair of the task force.
During a press call following the meeting, Rosenworcel said that she supports spectrum sharing, which would allow providers to share space in certain areas of the radio wave spectrum. There are a lot of entities interested in the popular bands of the spectrum, and we need to be creative and efficient in how we use that space, she said.
Rosenworcel’s position conflicts with the Cellular Telecommunications Industry Association, a trade association comprised of many communication companies, which supports exclusive access to parts of the spectrum.
Wednesday’s meeting marks the first FCC meeting chaired by Rosenworcel in her new position as acting chairwoman. She can serve in that position until President Biden puts forward a candidate to serve as chairman or chairwoman, and that candidate is confirmed by the Senate. Because Rosenworcel was already confirmed as a commissioner, she can serve in that role until her term expires.
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