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Loopholes Allowing Private Purchase Of Chinese Goods Must Be Closed: Commissioner Carr

Derek Shumway

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Screenshot taken from CSIS event

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.

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FCC February Meeting Targets 911 Fee Diversion and Replacing Foreign Telecommunications Equipment

Tim White

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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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FCC Chair Ajit Pai Says U.S. Sentiment Towards China Changed Under Trump

Jericho Casper

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Screenshot of Ajit Pai from his presentation

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.

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President-Elect Joe Biden Needs to Reassure Global Allies That ‘America First’ Policy is Over

Liana Sowa

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Photo of Former CIA Director John Brennan from February 2019 by Gage Skidmore used with permission

December 4, 2020 – Panelists at The Center for Strategic and International Studies on Friday morning agreed that for the U.S. to reassert its power globally, the incoming administration of President-elect Joe Biden needed to convince U.S. allies that Trump’s isolationist “America First” policy was over.

Former CIA Director John Brennan said that the country needs to reassert itself on the global stage in organizations where it has recently pulled back, like the United Nations and the World Health Organization.

He also said that the U.S. would need to have constructive dialogue with Russia, as well as deal with Iran and North Korea, assuring other countries that Trump administration isolationism was “just a blip.”

Sue Mi Terry, CSIS senior fellow and Korea chair was emphatic about the need to reassure our allies of our break with isolationism. She said it must be disconcerting to our allies that many Americans still voted for Trump this year.

Screenshot from the CSIS webinar

Brennan predicted that one of the challenges of the incoming administration would be having to deal with issues like the pandemic, climate change, and cybersecurity simultaneously.

Unlike previous administrations, said Victor Cha, CSIS senior advisor and Korea chair, Biden won’t be able to put the biggest crisis—the pandemic—on the back burner when prioritizing issues.

Brennan said that the new administration would likely be putting together an National Intelligence Priorities Framework document, NIPF, to aid in the prioritization decision-making. He also predicted that Biden would make more use of the interagency process.

Cha asserted that fixing the US’ domestic issues first would build credibility with our allies as we tried to “mend” those relationship because they would know we’re coming from a solid place.

CSIS Non-Resident Senior Advisor, Korea Chair, and Moderator of this discussion Mark Lippert, referenced a statement from National Director of Intelligence Dan Coats in his U.S. Worldwide Threat Assessment intelligence report (PDF),  which said that China and Russia were more aligned than they ever have been and that that alliance is likely to strengthen.

Disagreement over whether China and Russia are a joint threat

Brennan however disagreed with Coats, saying that while Russia and China may be flexing their muscles more, he doesn’t think there’s strong alignment between the countries.

Brennan said that while the U.S. has pulled back internationally, that may have given those countries the opportunity to strengthen other ally relationships. Going forward, Brennan said that things will be different.

Brennan also projected that Biden would take a pragmatic approach with China instead of viewing them as enemy, easing tensions in some areas, but competing in others. He admitted that some of the ways we may have to engage with China would be “distasteful,” but “we have to do it,” he said.

He asserted that Biden while he would probably not allow problems to fester in Iran and North Korea, would find ways to navigate these “global shoals” to maximize peace for global benefit.

Panelists also discussed North Korea specifically. Sue Mi Terry mentioned North Korea’s hacking attempts to get a cure for the virus and was adamant that the Biden administration needed to send some sort of peace signal to North Korea to avoid a major provocation down the road.

Victor Cha pointed out that North Korea has historically shut down their country longer than most others in the wake of a pandemic. He predicted that economically they might not be able to do that this time, which may lead to their collapse.

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