5G roll out: Merkel’s headache

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The Huawei dilemma continues to stir emotions inside Merkel’s CDU. At the party conference last weekend, a group of members strongly argued for exclusion of the Chinese telecom giant in the rollout of 5G, without mentioning Huawei by name. This group submitted a motion stating that suppliers “under the influence of non-democratic countries”, an obvious reference to Huawei / China, should be excluded from participation.

In a heated debate, a slightly annoyed Merkel once again made it clear to her party members that, as far as she is concerned, neither a specific country nor a specific company should be excluded from the outset. She also pointed out that 70% of the current (3G / 4G) mobile network in Germany already consists of Huawei components, but that the share of Nokia and Ericsson in 5G will grow considerably in the future. The CDU party congress eventually reached a compromise proposal that stipulated that “only those suppliers will be deemed reliable who can meet the new stricter security measures, which should, among other things, be able to rule out any influence by a foreign state.” The motion also requires the German parliament (the Bundestag) to be involved in the final decision-making on the 5G rollout. Given that the CDU is the largest government party, the party motion is expected to become government policy, although Merkel was anything but happy with her party’s motions …

The German debate continued on Sunday evening with an ARD TV program in which spokespersons from various political parties participated. The debate was very lively: the most striking contribution was made by the Minister of Trade and Economy, CDU member Peter Altmeier, who stressed that after the NSA eavesdropping scandal under Obama, no one in the CDU or Germany had called for a boycott of America. Morever, he added, the US government also requires US companies to pass on information to its intelligence services in the context of America’s fight against crime and terrorism. In other words, the fact that the Chinese (communist) government demands the same of its companies and nationals is not a sufficient reason to exclude Huawei from participating in the 5G roll-out. Altmeier seemed (unintentionally?) to almost equate a communist state system with a democratic system with an elected president and independent courts and to depict American companies or institutions as equally untrustworthy as Chinese …

Altmeier’s remarks must not sit well with those CDU party members who still interpret the compromise reached at the party congress as a de facto exclusion of 5G suppliers that are under state influence, i.e. Huawei / China. Maybe they can rely more on the support of the other governmental party, the SPD, which is said to be working on its own proposal that would rule: “Beim Ausbau des 5G-Netzes sollten nicht vertrauenswürdige Hersteller – insbesondere dann, wenn nicht-rechtsstaatlich kontrollierte Einflussnahme, Manipulation oder Spionage nicht auszuschließen sind – grundsätzlich ausgeschlossen werden.” The SPD most likely no longer wants to accept suppliers whose independence of state influence and manipulation can’t be proven without any doubt. That is not just a technical evaluation, but of course also a political one.

Are German political circles just shadowboxing? While the debate at the CDU congress was raging, a preliminary agreement was reached in Finland between all permanent representatives at the EU. Their agreement stipulates that when selecting 5G suppliers, the EU must and will also consider the domestic legal system of the country of origin of the companies concerned. This preliminary accord is expected to be approved at ministerial level in December. And whatever Minister Altmeier may think, we should still assume at least the EU does still see a difference between a Chinese communist legal system and an European or American legal system, no matter how much Trump has been trying to attack or sabotage his country’s democratic institutes and jurisprudence. The preliminary agreement also explicitly states that the individual European member states should not make themselves dependent on one 5G equipment supplier…

Whatever the case, Germany’s government and the Germans are struggling with the Huawei dilemma. And with their (strategic) positioning towards China. “Wandel durch handel ist gescheitert” : it’s become an illusion to believe political change in China can be enforced through trade, at least according to what seems to become the consensus among a growing part of the political establishment in Germany, not just in America. What does the Netherlands think? The Dutch parliament has not been very vocal about the whole issue. And Prime Minister Rutte prefers to remain silent too, while normally he has an answer to any question asked. His attitude blends in seamlessly with the many years of absence of any (public) discussion about the implications of the rise of China, about the role of Europe and about national and European policies towards China and about the link between digital technology & strategy and national security. That public debate should apparently still be kicked off in the Netherlands, a few months before the planned rollout of 5G …

The telecom operators are meanwhile anxiously awaiting the so-called “toolbox of measures”, or the guidelines for stricter security measures that the European Cyber Security Agency will propose “towards the end of the year” to reduce cyber security risks at national and European level. The agency will map all these risks in detail to encourage the European member states to take adequate measures to protect their 5G network … If that won’t work out in the Netherlands, we could of course still try to call 911…

ps: Reuters Nov 25 2019

PARIS (Reuters) – France will not follow the United States and exclude China’s Huawei from its next-generation 5G network, but will have the power to vet all equipment makers for any potential security threat, a minister said on Monday.

French telecoms regulator Arcep kicked off the long-awaited sale of 5G spectrum on Thursday, ending months of intense debate between the country’s telecoms operators and authorities on how to best deploy the new ultra-fast mobile internet technology.

“We do not target one equipment maker,” Junior Economy Minister Agnes Pannier-Runacher told BFM Business television on Monday. “There is no exclusion.”

There are three equipment makers active in France. Huawei has a 25% market share, there is also Nokia and Ericsson. Samsung is not active yet in France but is interested by 5G,” said Pannier-Runacher.

“The government will not exclude anyone. We are not following the position of the United States,” she added. “We will proceed on a case by case basis

Telecoms operators will have to seek permission from the prime minister for their 5G network projects, and receive clearance based on national security considerations.