U.S. needs to have more allies to bypass Huawei

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Michael Chertoff is co-founder of consulting firm Chertoff Group and formerly served as the Secretary of the Department of Homeland Security. Mike McConnell is vice chairman of Booz Allen Hamilton and formerly served as director of the National Security Agency.

On Wednesday, the FCC opened additional mid-band spectrum to support 5G mobile communications in the U.S., reducing reliance on short-range microwave spectrum that comes with high deployment costs. This move will help to ensure the U.S. doesn’t fall further behind other countries in the adoption of 5G, which is expected to spark $12 trillion in new economic activity by 2035, especially in enabling the internet of things.

Perhaps more importantly, this proposal demonstrates one way the U.S. can reinforce elements of what the government calls the “national technology and industrial base” (NTIB), the collection of companies who design, build and supply the U.S. with vital national-security related technologies. These technologies, which now include 5G wireless networks, increasingly underpin everything from the financial sector to the supply chains that deliver our food.

Government support for portions of the NTIB is nothing new. World War II prompted the government to foster the “defense industrial base,” ensuring that American forces had the tanks, aircraft and ships needed to win the war. The Defense Production Act formalized this system at the dawn of the Cold War, granting the President broad authorities to ensure a reliable, domestic supply of vital national security goods. While some defense goods have collateral, non-military uses, others, such as tanks and fighter jets, do not. When the military is the only customer for a good it must place regular orders, or offer other forms of support, in order to guarantee its continued supply.

Yet this system’s limitations are beginning to show. The rapid technological rise of China, and its intellectual property theft, have eroded America’s advantages, while globalization has made it prohibitively expensive to manufacture certain technologies in the U.S. For example, the government’s secure computer chip program has long faced challenges that have severely limited the number of trusted suppliers, driven up costs, and limited the availability of U.S.-made versions of some chips.

Similarly, the economies of scale required to bring advanced technologies to market limit the number of companies that can compete in any given segment. For example, while U.S. vendors still exist, just four companies — Ericsson, Nokia, Huawei and ZTE — account for two-thirds of the global telecommunications equipment market. Some market segments, such as 5G base stations, have no U.S. competitors. Worse, China’s Huawei focuses on low and mid-band base stations that increase their range and reduce costs, making them appealing to much of the world.

As such, we must reexamine how we think about the NTIB, expanding its scope beyond DoD and military operations technologies, and better leverage it to protect our cyber industrial base. Our entire society, not just the military, has become highly technologically dependent. Citizens rely on the same GPS systems, 5G base stations and cloud server technologies used by the military. These technologies power Netflix, the electrical grid, Waze, nuclear submarines and the global financial system. Such dual-use technologies are just as, if not more, important to our national security as any tank, aircraft or ship.

In this environment we must bolster our ability to protect the cyber industrial base of the U.S. and our allies. Fortunately, some pieces for such a move are already in place. Congress has already allowed the Defense Production Act to include dual-use technologies and for coordination with Canada, the U.K., and Australia on securing and protecting our shared industrial bases. However, we must do more.

First, support for our cyber industrial base must grow — the government must take an active role in the roll-out of vital technologies.

In the case of 5G, the U.S. should follow the lead of other countries, freeing vital spectrum and easing the deployment of new base stations. The U.S. must also go further to support key suppliers, either American or allied. In some instances this may require the U.S. government to purchase a certain volume of a technology to ensure the viability of the supplier, as the military does today for naval vessels, or for the government to invest in a key factory, as the Army has at the Joint Systems Manufacturing Center in Ohio.

Second, we must expand our cooperation beyond four allies. Key technology companies, such as Ericsson, Samsung, Nokia and Siemens, are based in other allied countries, such as Sweden, South Korea, Finland and Germany. The U.S. can benefit greatly from enhanced coordination with its allies, leveraging their innovations to address our own technological and manufacturing gaps. Coordination can come in varying forms, including multi-lateral purchase arrangements, like those for the F-35, or by purchasing 5G technologies from Sweden’s Ericsson rather than China’s Huawei.

Now is the time for the U.S. to expand its work to safeguard and grow our cyber industrial base. In an environment of rapid technological change and globalization it is imperative that we take the actions necessary to ensure we continue to have access to secure forms of the advanced technologies that underlie both our economy and military. Without such action we could end up with little choice but to buy from the likes of Huawei — and be forced to accept the security risks that come with it.

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