Dutch Government Mulls Restrictions on Chinese 5G Suppliers

Dutch Government Mulls Restrictions on Chinese 5G Suppliers

The Dutch government may look at restricting the use of Chinese network equipment suppliers such as ZTE and Huawei in the conditions of the upcoming 5G tender, according to a news report. The China strategy that the state presented last year will also be taken into account, according to a spokesperson for the economic affairs ministry.

The Netherlands’ strategy looks to protect sensitive technology from Chinese state-supported companies. The Dutch intelligence service AIVD has already warned of Chinese spying activity in the Netherlands.

Tim Sweijs, at the Centre for Strategic Studies in The Hague (HCSS), an organization that advises the Dutch government on international security trends, said that the 5G networks will be a utility to be used as vital infrastructure for the economy and society in the future. As such, it is not advisable to leave such networks to untrustworthy parties, he said.

Sweijs noted that Chinese suppliers do not need to be completely excluded from the roll-out of 5G networks, pointing to the example of BT, which uses Chinese suppliers for parts of its radio network, but not the core network.

Tarifica’s Take

Historically, mobile operators, technology suppliers, and national governments have been extremely motivated to pursue maximum speed in the deployment of next-generation networks, within the confines of economic feasibility. In the case of 5G, which is expected to be rolled out in advanced markets during 2019, there are reasons to believe that matters are different.

That is largely because of the nature of 5G itself and because of some of the purposes to which it can and will be put. It is also due in part to greater awareness across the board about the dangers of hacking.

5G networks offer higher speeds, of course—indeed, up to 100 times higher than 4G/LTE. But the 5G era, when it fully arrives, will offer more than just increased speed to make current applications of mobile technology work faster and more efficiently. It will enable technologies to operate that simply would not have been feasible under 4G. In other words, it will bring about a quantum leap rather than an incremental improvement.

This situation was explained lucidly in an article by former chief U.S. regulator Tom Wheeler, published this week in the New York Times. Wheeler, who chaired the Federal Communications Commission from 2013 to 2017, cited self-driving cars as a key example, writing, “The autonomous car is something vastly different, in which the 5G network allows computers to orchestrate a flood of information from multitudes of input sensors for real time, on-the-fly decision-making. It is estimated that the data output of a single autonomous vehicle in one day will be equal to today’s daily data output of three thousand people.” Wheeler argues that since 5G will enable this and other complex systems, many of which will profoundly affect the safety of human lives, the imperative to protect it from hacking is greater than with any mobile network to date. Because of 5G’s capacity to link devices and create a “smart” future, the stakes have been very significantly raised.

Wheeler, like the Dutch government regulators, points to China as a particular risk—in fact, the biggest risk right now. He believes that the U.S. is pursuing hurried development of next-generation networks while neglecting cybersecurity, in large part because of a Trump administration policy of treating the process as an “arms race” with China to be first in 5G. This is particularly ironic in that industry watchers generally identify China as the number-one cybersecurity threat to future U.S. 5G networks.

The government in the Netherlands is considering a more cautious approach. Aware that cooperation with Chinese technology companies could lead to introducing spyware into the country’s emerging 5G ecosystem, they may move to limit—though not entirely eliminate the involvement of these companies and their products, which are building blocks for 5G. Considering the degree of Chinese government control of Chinese companies, this would appear to be a wise strategy. While looking for technology partners other than Huawei and ZTE may slow down the development process to some extent, the delay, if there is one, would end up being very worthwhile in the long run. Mobile operators, of course, stand to benefit hugely from the development and widespread adoption of 5G, but we believe that caution is necessary—more so than ever before.