As 2020 begins, here are some intuitions about what might happen with key US and foreign digital and cybersecurity policy issues in the year ahead — specifically Huawei, 5G wireless, the fight over encryption, and export controls. These are not predictions but rather my sense of how these issues and challenges will unfold in the next year.
Huawei
It is crunch time for the Trump administration’s drive to persuade, cajole, and demand that US allies, particularly in NATO, forgo installing Huawei equipment in the rollout of 5G wireless networks. In the early months of 2020, European governments will make crucial decisions about which telecoms equipment providers they will choose for the baseline equipment for their next generation wireless networks. At this point, few final decisions have been made, but European governments and the European Commission greatly fear being left behind in the race for the next wave of 5G connected technologies, the Internet of Things, and more.
As I’ve noted previously, Germany is the key, and German Chancellor Angela Merkel is holding out against pressure, not only from the US but also from her own party and German intelligence, to completely exclude Huawei technology. Merkel fears the blowback from China if Huawei is banned, with good reason, as China is a major German trade and investment partner and Beijing has publicly threatened retaliation should Germany exclude Huawei.
Should Merkel and other European nations allow Huawei 5G technology into their networks, the Trump administration face a momentous decision: whether to refuse to exchange vital intelligence data over national networks that include Huawei equipment. It is also unlikely that the US will accept a so-called compromise pushed by some European nations to allow Huawei equipment only in the “periphery” of their 5G networks, given the myriad points of entry in 5G systems and continual updating of software, technology experts view this distinction as meaningless.
Alternatives to Huawei in 5G equipment
Ironically, the US has no domestic “dog in this fight.” Potential competitors to Huawei are all foreign companies: Ericsson, Nokia, and Samsung. Huawei dominates many markets around the world, with Ericsson and Nokia struggling to compete, despite producing state of the art technology. The Trump administration has internally discussed various options for countering Huawei over the short and long haul. Obviously, one step would be to provide direct support, in the form of some kind of subsidy for technology development and sales, to the two European rivals to Huawei. Though normally support for a foreign technology firm would produce backlash in Congress, in this case, there would almost certainly be substantial support from both parties.
In the last week of December, however, the administration came up with a wild card proposal. The Pentagon is now urging US telecoms equipment manufacturers, specifically Cisco and Oracle, to join a crash effort to develop novel open-source software that would allow wireless carriers to buy off the shelf hardware from various equipment manufacturers. This would upend the current proprietary system in which each company produces its own dedicated software. While cautious because of the gravity of any Pentagon request, both Cisco and Oracle reacted skeptically (in effect, negatively) to the proposal.
The
late-breaking Pentagon initiative, whatever the outcome, demonstrates that US
security and intelligence officials are increasingly alarmed at Huawei’s
seemingly unstoppable advance — and are desperately searching for alterative
options. All of this is likely to become more urgent in the early months of
2020.
Encryption
Pressure on Silicon Valley to crack encrypted devices is rearing its ugly head again. US Attorney General William Barr and FBI Director Christopher Wray have mounted a renewed push for companies — particularly Apple — to provide access to encrypted messages. This continues a drive begun by then–FBI Director James Comey to get the FBI and local law enforcement access to encrypted messages and phones. Comey tried to persuade the tech industry, appealing to American ingenuity. Barr has adopted a much darker stance, accusing the companies of irresponsibility in the face of potential child molesters and sex offenders.
Unfortunately for both Comey and Barr, the issue is not policy but technology. Nothing has changed since the first assault on encryption in the 1990s. There is widespread agreement among technical experts that there is now no way to create “golden keys” or backdoors without badly compromising the security of all encrypted devices. Still, that may not stop the Trump administration from undertaking another assault on encryption at some point in 2020.
Export controls
Finally, there are the multiple complex issues surrounding export controls and the depth and reach of the recent Export Control Act of 2018. The US Commerce Department is in the final stages of publishing the first list of covered sectors particularly with respect to “emerging technologies.” Industry and high-tech experts were alarmed at initial indications that the Commerce Department would target widely. However, recent reports indicate a more limited list.
The real problem here, as with other foreign direct investment and security rules, is that Congress has its eyes on China, but the legislation it has recently passed covers US foreign direct investment in all countries. Emerging technologies — in artificial intelligence, quantum computing, robotics, and more — span the globe. And if the US overreaches, it could well cut itself off from key strategic supply chains far outside China. Much hinges on getting the balance of security and investment flows right. Happy New Year!
The post Huawei, 5G, encryption, and export controls: Intuitions for 2020 appeared first on American Enterprise Institute – AEI.