Don’t ban Huawei. Do this instead
- Fast Company
Formally preventing U.S. companies and universities from conducting business and research with Huawei—the next step beyond the current pressure on the company from Congress and the Trump administration—will not make America’s communications
An official ban of the use of Chinese telecommunications equipment by U.S. companies might come in the form of a “national emergency” based on an “extraordinary threat.” But the real threat is that unsubstantiated accusations against Huawei will prevent the U.S. from having a more important, more rational conversation about the need to manage cyber risk. This failure may prevent the U.S. from achieving the technological and economic progress it could have made, had it chosen to look more closely at the facts. This is particularly true at places like my university, MIT, which had to stop research with Huawei, the most advanced partner we had in the telecommunications field.
The desire to ban companies like Huawei has little to do with technology, and nothing to do with effective risk management. Huawei has an unblemished 30-year cybersecurity record and more than 500 satisfied telecom customers around the world. None of them has ever experienced a security breach related to Huawei’s equipment. Furthermore, the company’s research today leads the world and is widely copied.
Listen to the DHS
Concerns about Huawei based on geopolitics are understandable, but are best addressed by collaboration, as well as a comprehensive risk management approach, as recommended by America’s own Department of Homeland Security (DHS). A ban, by contrast, would create several harmful effects and a guarantee that we will fall further behind.
First, a ban would exclude a major source of innovation—ideas, people, and products—from the U.S. technology market. Last year, Huawei was the fifth-largest investor in R&D worldwide, outspending companies such as Apple, Intel, and GE. Huawei began researching 5G wireless technology 10 years ago, and so far has invested more than $2 billion in 5G research, including $800 million last year alone. This led an expert at Britain’s largest telecom operator, BT, to call Huawei the “only true 5G supplier right now.”
When governments block major vendors from their markets, competition is reduced. Costs go up, businesses curtail their investments, and there is less innovation overall, which means that consumers pay higher prices for inferior products and services. Reducing competition is especially problematic in the United States, where more than 90% of wireless equipment is sold by just two companies, Ericsson and Nokia (neither of which is based in the U.S.). This market concentration has led small wireless operators to complain for years about the high prices they would pay for network equipment if they had to use either of those vendors.