Back in May, we told you that the Commerce Department was working on a draft of a new rule that would allow U.S. companies to work with Huawei to create 5G standards. After the company was placed on the Commerce Department's Entity List last year, it was banned from accessing its U.S. supply chain and U.S. firms were not sure what information they were allowed to discuss with the Chinese manufacturer. As a result, during meetings held with Global telecom firms to discuss 5G standards, engineers working for U.S. companies would stay silent giving Huawei a stronger voice in the creation of these standards.
U.S. amends Entity List rule against Huawei to allow U.S. to participate in meetings to set 5G standards
Reuters reports that U.S. Commerce Secretary Wilbur Ross is calling a new rule that allows the U.S. to work with Huawei in the creation of 5G standards "a clarification." The rule makes a change to the Huawei "entity listing" to allow U.S. firms to release certain technology to Huawei and its affiliates if it adds "to the revision or development of a 'standard' in a 'standards organization.'" Ross says, "The change is really simply a clarification. It isn’t that we’re doing something to help Huawei. What we’re doing is something to make it easier for global standards to be symmetrical. This is to help make sure we have ubiquity in 5G."Today,
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U.S. tech companies are also concerned about whether they can participate in these meetings because they need to have their input in the development of 5G standards heard. Naomi Wilson, senior director of policy for Asia at the Information Technology Industry Council (ITI), which represents companies like Amazon, Intel, and Qualcomm, said, "As we approach the year mark, it is very much past time that this be addressed and clarified." Wilson noted that the U.S. wants its companies to be competitive with Huawei "But their policies have inadvertently caused U.S. companies to lose their seat at the table to Huawei and others on the entity list."
The U.S. put Huawei on the Entity List last year, calling the company a threat to U.S. national security because of its perceived ties to the communist Chinese government. The plan was to make it very difficult for Huawei to obtain the software and components it needs to produce its handsets and networking equipment. Not being able to license Google's Mobile Services, Huawei could not allow its phones to run apps like the Google Play Store, Search, Gmail, YouTube, Maps, Drive, and others. This didn't matter in China where Google banned most of Google's apps anyway, but it did have an impact on Huawei's international units. Still, Huawei managed to increase its phone shipments last year by 17% to 240 million phones allowing it to surpass Apple and become the world's second-largest smartphone manufacturer.
Not happy with these results, the U.S. took things to the next level last month when it changed an export rule. Foundries that employ U.S. technology to produce semiconductors cannot ship these components to Huawei without obtaining a license from the U.S. Without cutting-edge chips to use for its phones and 5G base stations, Huawei could have a tough time ahead. Still, the firm is looking for a way around the new rules including one plan that would allow Samsung to produce 7nm chips for Huawei's 5G base stations in return for some smartphone market share.
Secretary Ross says that the national security concerns about Huawei continue. He states that the spying that Huawei is accused of is a real issue and the U.S. is concerned about the security of its 5G networks. Despite the amendment to the Entity List rules against Huawei, the global leader in networking equipment is not allowed to participate in the construction of 5G networks in the states.