5G supply chain order worries industry, experts

Trump administration officials are hoping that an executive order issued this week will keep compromised or insecure gear out of the U.S. telecommunications pipeline as it builds 5G networks. Industry groups and experts want to know more about how those rules will be developed.

Following the issuance of the order, which directs the secretary of the Commerce Department to develop new rules for when to ban information and communications technology (ICT) sales on national security grounds, a number of industry associations and experts expressed concern over how such rules will be drafted and implemented.

The Information Technology Industry Council put out a statement saying any government decision to ban or restrict ICT products or services "should be based in rigorous, evidence-based analysis of the risks and involve close coordination with the private sector."

With the executive order, the Trump administration made clear that it doesn't want companies like Huawei, which it believes are legally compelled to cooperate with their home governments in intelligence matters, involved in building out the U.S. 5G network.

So who will build the U.S. 5G network?

There are no clear domestic alternatives capable of manufacturing key chunks of the networking equipment that will go into 5G. Chris Boyer, assistant vice president for global public policy at AT&T, said that while there are "quite a few different suppliers" for equipment and components that will make up the core of 5G networks, the diversity in suppliers for other areas, such as radio access networks, is limited to Huawei, ZTE, Nokia, Eriksson and Samsung.

Huawei and ZTE are viewed by many in government to be direct national security threats, while the remaining companies still rely on the global supply chain to manufacture 5G equipment. Figuring out how to incentivize a new generation of domestic suppliers, Boyer said, will be a challenge for U.S. telecoms going forward.

"A few of those options are off the table.… That leaves us basically with three major suppliers in [radio access network], and so how do we ensure that we have diverse supply chains so we can continue to invest in that capability … and what are the long-term ramifications of some of these issues that we're seeing involving particular entities overseas?" Boyer said at a May 16 event in Washington, D.C., hosted by the U.S. Chamber of Commerce. "That's a critical concern I think for both the industry and the government, and we're trying to figure out how do we deal with that."

John Godfrey, senior vice president for public policy at Samsung, sounded a similar note, saying the executive order alone won't solve U.S. challenges around 5G, and it must be followed up with corresponding moves by policymakers to lay the groundwork for new entrants into the market and encourage domestic investment.

Trump administration officials have indicated that they are sensitive to those concerns and said that the Commerce Department and any other groups they rely on, such as the ICT Supply Chain Task Force, will be open to feedback from the public and industry.

"The intention from Commerce and from administration leadership is that this is going to be a transparent process," said Joyce Corell, assistant director for the supply chain and cyber directorate at the Office of the Director of National Intelligence. "It's going to be an iterative process with frequent opportunities for industry consultation."