BARFIELD: Watch Germany on Huawei and 5G


Europe is at the center of a worldwide debate and conflict over the role of Chinese telecom giant Huawei in the emergence of 5G technology. Within Europe, Germany occupies the most significant decision-making focal point. Germany has Europe’s largest and most advanced economy (and telecom market). Its decisions regarding the technological foundations of its future wireless market will exert commanding influence over other European nations’ paths (particularly with the UK set to leave the EU).

Against that background, here is an update on recent actions by top European Union officials, Germany, and the US. At this point, confusion reigns.

On October 6, the European Union issued an advisory report that, while not naming Huawei specifically, contained warnings that pointed directly at the Chinese company. The advisory report, based on research in a number of EU countries, warns of “uncontrolled software updates, manipulation of functionalities, the inclusion of functions to bypass audit mechanisms, backdoors, undocumented testing features left in the production version, among others.”

It also raised questions about contracting with companies that have direct ties with states “where there are no legislative or democratic checks and balances in place.” The advisory will be followed up with more detailed recommendations in the coming months.

On October 15, German regulators published preliminary instructions to German operators in contracting for baseline 5G equipment. This “security dialogue” explicitly affirmed that no company would be excluded from contracts, including — by inference — Huawei. The new document set forth a certification process of technical hoops that vendors would have to pass before receiving clearance for 5G equipment sales.

Critics, both German and foreign, immediately condemned the proposed regulations as lacking enforcement muscle and allowing “Huawei almost unhindered access to [Germany’s] telecom market.” The central focus revolved around a so-called “no spy” clause, which is technically a pledge of “trustworthiness” for suppliers of crucial components and gear. As currently written, the proposed catalog of instructions does not include mandatory verification procedures or enforcement penalties for suppliers who do not follow the regulations.

The US, which has long pressed European allies to ban Huawei equipment from their 5G rollouts, immediately expressed strong disagreement with the proposed guidelines. Top White House cybersecurity official Rob Strayer stated that if Germany used “untrusted” equipment, the US would have to reassess the flow of security-related information between the two countries and, most importantly, between their intelligence agencies.

The Merkel government also found itself at odds with key German political leaders, including members of its own majority party. A group of legislators from the Christian Democratic Union led by Norbert Röttgen, who chairs the party’s foreign affairs committee, have dissented from the security dialogue guidelines, calling for Huawei’s exclusion from 5G equipment competition. They have also challenged the government’s authority to act alone, arguing that the German parliament should make these decisions.

Röttgen has stated: “The last word is far from spoken and I’m also cautiously optimistic that this matter can be decided in the Bundestag in the coming weeks or months.” In the past several days, the head of Germany’s Federal Intelligence Service has also warned against using Huawei equipment in parts of the network central to German “core interests.”

Make no mistake, there are extremely difficult trade-offs for the Merkel government. China is Germany’s top trading partner, with huge future export potential.  Further, German telecom operators, particularly Deutsche Telekom, have invested heavily in Huawei equipment for 5G rollout. To totally replace Huawei equipment in their 5G networks would cost hundreds of millions, even billions of dollars.

Further, German operators worry that Huawei’s competitors, Nokia and Ericsson, are not as technologically advanced and cannot match Huawei’s prices. (No doubt such fears were aggravated when Nokia’s shares fell more than 20 percent after the company reduced profit forecasts due to the increasing costs of rolling out equipment for 5G networks.)

Still, the security imperatives seem inexorable. And not just US political leaders are challenging the Merkel government. Both NATO Secretary General Jens Stoltenberg and NATO Allied Supreme Commander Europe Curtis Scaparrotti have warned that Huawei equipment in 5G systems would gravely threaten military communications. Scaparrotti stated flatly that should Huawei be allowed into a country’s national defense communications system, the US military would no longer communicate with that system.

Much is riding on Germany’s decision. So, to return to a famous German song and slogan of the 19th century: “Wacht am Rhein” (Watch on the Rhine).

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