"It is not too late to achieve technological sovereignty in some critical technology areas," stated Ursula von der Leyen, the former German defense minister, in a position paper published on the day she was elected President of the European Commission. Her five-year term began November 1. "Europe already sets standards in telecoms. It is time to replicate this success and develop joint standards for our 5G networks."
There's a signal being sent by the incoming leadership of the upper house of the European Union' government. Just what the signal means and to whom it's being directed both seem self-evident. If China and the United States want to resume playing "Superpowers," then Europe is saying it can afford the table stakes.
"The geopolitical situation makes this Europe's hour," stated then- European Commission President Jean-Claude Juncker, in his September 2018 State of the Union speech. "The time for European sovereignty has come. It is time Europe took its destiny into its own hands... Sharing sovereignty, when and where needed, makes each of our nation states stronger."
Barring a deal with the US, the EU is preparing to proceed with a 3 percent tax on revenues from "digital activities." It's moving forward with plans to build a home-grown cloud platform, building on a concept floated by German Chancellor Angela Merkel back in 2014 for a separate, nationalized, innovationsfreundliche Internet. And some of the EU's incoming chief ministers are advancing the idea of assembling a standing army, possibly to ease its dependence upon protection from NATO and a diminishingly reliable US.
"We have to protect ourselves with respect to China, Russia, and even the United States," stated France President Emmanuel Macron, during a recent joint appearance with German Chancellor Angela Merkel. For this reason among others, Mr. Macron stated he would support the formation of a "true European army."
While the world is taking up arms against itself once again, Europe is likely to lose the United Kingdom as a member state — if not at the end of January, then perhaps a few months down the road after the European Council has kicked the Brexit date forward a few more times like a tin can.
BT is Britain's principal telco. It was once an agency of the UK Government until being spun off into a private entity in 1984. In December 2018, BT pledged to remove Huawei equipment from the core of its 3G and 4G networks, and not to add any more Huawei equipment for 5G. Despite this pledge, the following month, the China government granted BT the first foreign operating license to do business in China, competing with its state-owned services China Mobile, China Telecom, and China Unicom.
In the UK's absence, the remaining pillars of any forthcoming European empire would be France and Germany.
Orange SA is the current name for the former state-owned monopoly France Télécom, now a multi-national public telco with France continuing to own about a one-fourth stake. Although Orange pledged in December 2018 to exclude Huawei from its 5G bids, France's government continues to deliberate measures that would open the door to certain Huawei equipment on a case-by-case basis, following a thorough security screening. Orange held a 2.5 percent stake in BT, but in anticipation of Brexit, sold off that sake last June. Orange also operates competitively in Belgium, Luxembourg, Moldova, Poland, Romania, Slovakia, and Spain, as well as much of Africa.
Deutsche Telekom AG (DT) was spun off from Germany's state-owned Bundespost in 1996, though the state is estimated to hold a 38 percent stake. DT estimates its stake in Britain's BT to be about 12 percent. In August, the company announced it intends to retain that stake indefinitely. It presently owns a 63 percent stake in US-based T-Mobile, and expects to hold a 48 percent stake in the mobile network provider once it completes its planned merger with Sprint.
DT and Huawei have already been close partners in some of Germany's first 5G rollouts, including what is said to be the first working 5G transmitter in Europe, located just above rooftop level on the antenna shown above, along Winterfeldstrasse in Central Berlin. In late October, Chancellor Merkel once again resisted calls from opposition ministers to take a harder stance on Huawei. The country maintains what it calls a "security catalog" listing global equipment suppliers that have pledged to refrain from including tools that may be leveraged in clandestine surveillance and spying. Although ostensibly toughening its "no-spy" regulations last May, the following October, Huawei officially made the revised approval list, and will continue to be a part of Germany's core 5G network for the foreseeable future.
These telcos are among 5G's premier customers. Despite how the EU government would position itself, these companies are the ones tasked with implementing 5G standards, and maintaining interoperability among its implementations. Working collectively under the auspices of the 3GPP industry organization, they have already set in stone the principal standards governing 5G.
But even these standards leave the door open for customers and implementers to build their 5G networks as they see fit. Should the UK find itself under no obligation to follow any European standard for telecom network access, then interoperability between these implementations becomes a more difficult objective to attain, especially if the UK should find its stance being swayed by other forces.
This fact is part of the impetus behind globalizing 5G in the first place. Should 5G become fragmented like the various smartphone vendors' implementations of Android, no single supplier can afford to service all its customers' variations while simultaneously maintaining affordability. 5G's implementation plan was based on a business model that sounds like an Ian Fleming novel title: The world or nothing.
It's the concept that frightened Britons at the time a majority of them voted in June 2016 to leave the EU: A collective sovereignty, necessary to level the playing field between a more mercurial West and a more opaque East, can only come when member states forfeit some of their sovereignty to the Union. It's a principle that many in power in the EU would see translated to technology and telecommunications. In this model, power can only be gathered together if it is also being centralized.
The decisions the United Kingdom must make on international trade and global allegiances will determine whether "sovereignty" will mean what Pres. von der Leyen implied it would. Should any government steer the direction of technological standards, especially if failure to do so diminishes its standing in world affairs?
"With the departure of Great Britain," remarked Chancellor Merkel during a joint press conference with French Pres. Macron in mid-October, "a potential competitor will of course emerge for us. That is to say, in addition to China and the United States of America, there will be Great Britain as well."
Last October 17, UK Prime Minister Boris Johnson and outgoing EC President Juncker announced an agreement — the odds of which had appeared rather low — to amend a Brexit deal reached earlier in the year with then-Prime Minister Theresa May. The amendments concerned the state of the border between Ireland and Northern Ireland, which would become the new UK / EU border.
In light of this agreement, the EU Council offered to extend the official Brexit date to January 31, 2020, which PM Johnson — reluctantly — accepted.
For the revised Brexit deal to become official, it must be approved by the UK Parliament. This decision will determine the time when 5G officially becomes an urgent discussion item, and at that time, who gets to set its terms.
Should the deal pass Parliament, then on January 31, the UK would enter an extendable nine-month transition period, during which it would continue to participate in the EU's Single Market, along with its subsidiary Digital Single Market (DSM). Nations that are members of this market have their customs charges waived. Presently, a UK citizen pays no customs tax for ordering goods from elsewhere in the EU, because the EU doesn't consider the shipment of those goods as imports. Also, a ban is currently in place on geo-blocking — which is the practice of an online retailer banning access to its site to customers based in any other participating country. As long as the UK's participation in the Single Market is extended, its businesses would conduct commerce and e-commerce as though nothing had changed.
In July 2018, under Ms. May's leadership, the UK Government released a position paper spelling out its intentions for this transition period. "While the UK will not be a part of the EU's Digital Single Market," the white paper stated, "the UK wants to develop an ambitious policy on digital trade with the EU, as well as globally." It proposed the establishment of a joint regulatory framework between the two governments, where presumably the two would agree to regulate their respective sides of the digital market as though they were essentially one body anyway.
BT's 2018 Annual Report [PDF] summarized its expectations for these negotiations: "In EU countries, electronic communications networks and services are governed by Directives and Regulations set by the European Institutions. These create an EU-wide framework (the Common Regulatory Framework) for fixed and wireless telecoms, Internet, broadcasting and transmission services." In a sidebar, BT advised that while the UK is due to leave the EU, its customers should continue to be protected by whatever regulatory framework emerges from Brexit, just as they were before. "So while existing regulations might be fine-tuned to suit specific UK market conditions," BT writes, "we don't expect fundamental changes."
It would be the kind of Brexit where the market into which the UK would emerge would be synthetically engineered and "fine-tuned," to borrow BT's term for it, to resemble the market it left behind — an exit without an exit.
Although officially the Conservative Party continues to support the policy as Ms. May's team framed it, PM Johnson has been less opposed to his country exiting the EU with no deal whatsoever. In his now-famous speech at a police academy in early September, he said he would rather be "dead in a ditch" than see Brexit be delayed yet again. Then on October 2 during a Conservative Party conference, he moderated his tone somewhat, though reiterated it remained his goal for the UK to leave both the EU and its Single Market. Later, with no control over the parliamentary agenda, lawmakers compelled him to apply for a Brexit delay anyway, which the EU Council approved.
Britain's opposition Labour Party officially favors the country's continued participation in the Single Market, and thereby the DSM. Yet although Labour leader Jeremy Corbyn has voiced his support for DSM in the past, in recent months, that stance has appeared to soften. The Web site for the Labour Campaign for the Single Market appears to be down, and earlier this year, its backers began voicing their displeasure with Corbyn's moderation.
So late last September, Corbyn turned up the volume, making his position clear that the impetus to remove the UK from the EU's back pockets without a deal would be the opportunity to place it in someone else's.
"A no-deal Brexit is really a Trump-deal Brexit," Corbyn told the Labour Party Conference. "That would be the opposite of taking back control. It would be handing our country's future to the US president and his America First policy. Of course, Trump is delighted to have a compliant British prime minister in his back pocket. A Trump-deal Brexit would mean US corporations getting the green light for a comprehensive takeover of our public services."
Here is where any of the minor parties could become a kingmaker for 5G.
In the UK, no single party holds a majority of parliamentary seats. Conservative PM Johnson hopes that will change on December 12, when the country is set to hold a new round of parliamentary elections, although chances then may be remote. Still, Conservatives may emerge with the largest plurality. Whether or not this happens, though, either the Conservatives or Labour may yet wrest control of the parliamentary agenda, if they form alliances with enough minority parties (there are officially 16 others) to form a tentative majority coalition.
It should come as no surprise that, last June at the very Banqueting House in the Palace of Whitehall where King Charles I was beheaded in 1649, Huawei threw a lavish party for both British telcos and lawmakers, including the former leader of the Liberal Democrats, Vince Cable. During that banquet, Cable told reporters from Bloomberg that he saw nothing to fear from Huawei.
Presently, the Liberal Democrats want to recall any Brexit deal. In a recent blog post, the party explained, "The Single Market replaces a large number of complex and different national laws with a single framework. This means less bureaucracy and lower prices."
The largest of Great Britain's small parties is the Scottish National Party, led by First Minister Nicola Sturgeon [shown at left above]. An opponent of Brexit from the start, Ms. Sturgeon has consistently emphasized what she perceives as the importance of the UK — and in turn, Scotland — remaining in the DSM. In a 2018 report [PDF], Ms. Sturgeon's government reasserts the EU's claims that simply reinforcing the terms of the DSM, and the UK's place within it, could boost the EU's annual GDP by about 2 percent.
At the same time, however, the Democratic Unionist Party, representing the interests of Northern Ireland, immediately opposed PM Johnson's new deal, claiming it lacks clarity on the issue of value-added taxes (VAT) on EU goods traversing the Northern Ireland border. Although goods and services traded between EU member states are not considered imports, VAT still applies when they cross state borders. That's a major potential source of income for Northern Ireland to which it might not be entitled if it were to be treated as part of the UK.
The UK's Brexit Party led by Nigel Farage, though relatively small, is disproportionately influential. In a recent appearance on Farage's radio show — whose content certainly had to have been anticipated, if not coordinated in advance — the US President bluntly stated that any deal finalized between the EU and UK on Brexit would render it impossible for the US to continue making trade deals with the UK. Stopping just short of commandeering the EU's vocabulary on the subject, he suggested that Britain could be walking away from a kind of trade partnership with the US equivalent to what it experienced with the EU. This despite PM Johnson having stated just hours earlier that the renegotiated Brexit deal would enable the UK to call its own shots on trade deals anywhere in the world.
With the distance growing between the UK's major and minor parties, any coalition with either Labour or the Conservatives will be overwhelmingly challenging after December 12, should the vote end up once again with a hung Parliament. Scottish FP Sturgeon has been on record begrudgingly supporting a coalition with Labour, but that would only come if Corbyn were to take a harder stance against Brexit. Such a coalition could conceivably include the Liberal Democrats, should they set aside their differences with Corbyn. In a best-case scenario for the smaller parties, Labour would reassert its support for a second referendum on Brexit, which after almost certain legal challenges, would result in the UK revoking Article 50 of the Lisbon Treaty and remaining in the EU.
All of which would make whatever Huawei spent on that banquet well worth it. It would have had a hand in trading a situation that may or may not, though probably not, work out in Huawei's favor, for one that may or may not work out, but probably may.
Two of the world's top three 5G telecommunications equipment providers reside in Europe: Sweden's Ericsson and Finland's Nokia. China has Huawei; the US has one of the also-rans.
On October 9, the EU's Network and Information Systems (NIS) Cooperation Group published its final report of its assessment of the potential dangers and security threats that a fully established 5G Wireless network for Europe was likely to encounter. It was anticipated to be the culmination of the analysis and seasoned opinions of organizations such as the independent Huawei Cyber Security Evaluation Centre (HCSEC), which had earlier reported to the UK Parliament the existence of several security issues, both existing and potential, that could put individual citizens at risk.
The word "Huawei" appears all of twice in the entire 33-page report: once in a list of the world's leading 5G equipment suppliers, and once in a footnote citing HCSEC. While tech analysts cited the report's warning about so-called state actors, including those with influence over the equipment supply chain, as veiled references to Huawei, anyone paying closer attention to the events of the preceding 12 months could form a completely different opinion.
"State interference through 5G supply chain," as defined by the report, is a potential risk scenario where "a hostile state actor exercises pressure over a supplier under its jurisdiction to provide access to sensitive network assets through (either purposefully or unintentionally) embedded vulnerabilities." At one point, the report notes the following:
In particular, as 5G networks will be largely based on software, major security flaws, such as those deriving from poor software development processes within equipment suppliers, could make it easier for actors to maliciously insert intentional backdoors into products and make them also harder to detect. This may increase the possibility of their exploitation leading to a particularly severe and widespread negative impact.
The Huawei components that have come under so much rhetorical scrutiny this year reside at or near the core of the 5G network, with its critical routing functions (not the Radio Access Network, or RAN, which exists on a separate layer). Claims last April of the discovery of an actual backdoor in Huawei equipment turned out the following month to be a vulnerability in a Telnet interface that impacted several other brands as well.
The RAN is actually more along the edge of 5G, where mobile and fixed wireless devices negotiate for access to service, and provision the frequencies this service will use. While the report credits 3GPP, the global industry standards body responsible for deciding what constitutes 5G, for developing a comprehensive security architecture for the 5G core, it goes on to warn that the edge could pose a serious danger: "The decentralization of the 5G network infrastructure," the report reads, "makes a robust and fault-tolerant service more complex to implement." With the increased chance of human error comes greater opportunities for exploitability. Indeed, some countries' mobile network operators (MNO), including the Netherlands' KPN, have asserted they may use Huawei equipment for the RAN layer, but someone else's — in KPN's case, preferably "a Western vendor" — for the core.
If any real opportunity exists for the EU to take charge of developing standards for 5G, and whatever should succeed it, from this point forward, it's here: at the edge of the network, where implementation details depend more on software than hardware. This is where the EU, if it were so inclined, could build a moat around its network. Similarly, this is where each member states' MNOs, had the authority or the mandate from their respective governments, could do quite the same thing.
As Xilinx engineer Dr. Sassan Ahmadi writes in the introduction to his Stanford University textbook on 5G New Radio (5G NR):
The key challenge in the design and deployment of 5G systems is not only about the development of a new radio interface, but also about the coordinated operation in a highly heterogeneous environment characterized by the existence of multi-RAT [radio access technology] systems, multi-layer networks, multi-mode devices, and diverse user interactions. Under these conditions, there is a fundamental need for 5G to achieve seamless mobility and consistent user experience across time and space.
The danger implied here is that any state actor seeking to build a big, beautiful firewall around its networks (a policy some certain states are actually pursuing) would have an easier time establishing it around the edge than the core. A similar point was raised by the former FCC CTO, Dr. Henning Schulzrinne, in a conversation with ZDNet earlier this year: Theoretically speaking, any equipment manufacturer can intentionally build a backdoor into its core routers. But sneaking information out of a country's telecom network would require not just several such backdoors not only implemented at various layers, but acting in concert with one another — which is foreign to the separation of functions implemented in the first place by 3GPP, an organization that includes Huawei. It would be easier, at least theoretically, to worm one's way into the existing network at the edge, however it's being implemented, than to plant some backdoor that may or may not be reachable from that edge.
The NIS Group's report appeared to be cognizant of these facts in its refusal to single out Huawei as a specific example of a clear and present danger to information systems. Judging from excerpts alone, it might seem the report's description of a state actor could only be referring to Huawei's unique relationship with China. But in a world where nationalist interests take hold — continuing a trend that led to Brexit in the first place — it would not be all that great a stretch to apply the NIS Group's description to any state actor that leveraged its large, if not majority, ownership stake to compel a telco to share the information it collects in a clandestine and exclusive way.
To borrow a phrase from yet another point of contention in the world, you'd have a quid and you'd have a quo. All you'd need would be a sprinkle of pro.
"An empire of peace"
European politics in 2019 has been defined by nationalism, although in two competing respects. In the vocabulary of the European Commission, "sovereignty" is the right for Europe to bargain for itself as a single, cohesive whole.
"It may be too late to replicate hyperscalers," stated von der Leyen in her June position paper, referring in this case to major data center builders such as Facebook and Google, "but it is not too late to achieve technological sovereignty in some critical technology areas... I believe Europe can successfully manage the transformation into the digital age, if we build on our strengths and values."
Bruno Le Maire is France's highly visible Minister for the Economy, hand-picked for the position by its maverick centrist president, Emmanuel Macron. His recently published book can be summarized by its title alone: The New Empire: Europe of the 21st Century. In it, Le Maire argues that Europe's stature in the world must be raised if it is to withstand, in his view, attempts at domination from China and the US. In a November 2018 interview with the German business publication Handelsblatt, Le Maire argued that the US President's threatened sanctions on France and other EU nations for conducting business with Iran, illustrated the need for Europe to stand up for its own affairs as an equal player.
"Europe's sovereignty is the struggle of a generation," Le Maire intoned. He continued (translating from the publication's German):
It's clear to everyone that today, it takes courage to stand up to the government of Donald Trump, and to say we want an instrument for the independence and sovereignty of Europe... This is about Europe becoming a kind of empire, like China and like the US. Don't get me wrong, I'm talking about a peaceful empire that's a constitutional state. I use this term to raise awareness that the world of tomorrow will be about power. Power will make the difference — technological power, economic, financial, monetary, cultural power, all will be critical. Europe should no longer shy away from putting its power to use [as] an empire of peace.
The alternate definition of nationalism in Europe comes from its swiftly emerging, populist right wing. In a dazzling display of coordination that would inspire shock and awe if we were still capable of being shocked or awed, the nationalist and Eurosceptic parties of their respective member states have recently come together in coalition. Spain's VOX party, France's National Rally, Italy's La Liga, the Netherlands' Party for Freedom, and Austria's Freedom Party, are all seeing surges in representation in the European Parliament in the wake of elections last May. Their keyword is also "sovereignty," but they define it as a resource they each have a shared interest in not sharing with each other. Even the UK's Brexit Party won the largest single share of seats (29) of any party representing Britain in the EP, for however long they should be seated there.
Here, then, is the ultimate irony: The United Kingdom may at last ratify its Brexit deal with the European Union, paving a route for it to remain in the Digital Single Market. Subsequent negotiations would make it feasible for the UK's 5G system to remain interoperable with the rest of Europe, whether or not it includes Huawei equipment. (The US President would be angry, but whether or not he takes punitive action may yet depend upon which side of the bed he's tweeting from when he hears the news.) Boris Johnson would be hailed for a diplomatic masterstroke that he himself would subsequently condemn as doomed to failure.
And yet, with nationalism absorbing the rest of Europe like a California wildfire (which the US President would also choose to ignore), a European Parliament that flips sides may take the first steps to dissolve the very Single Market that the UK would have sacrificed a chunk of its identity to protect. The MNOs would be left to their own devices anyway, and whether Huawei, Ericsson, Nokia, or even Samsung plays a significant role in their networks, may end up not mattering much if people find themselves switching phones every time they cross two nations' borders — which could, quite conceivably, happen at least twice a day.
For a while, globalization was hailed as the force driving the evolution of technology forward, potentially remaking the world economy and perhaps becoming the great equalizer between those who lack access to services, and those who don't need being served as much as others. It was nice while it lasted.