You might think that Huawei, China’s global tech giant and secret surveillance tool, is no longer a threat to the United States. Recent action by the Federal Communications Commission suggests otherwise.
On March 21, FCC Chairman Brendan Carr, announced the formation of a national security group within his agency to investigate how Huawei and other Chinese companies are still sneaking into our telecom networks. The chairman said these companies skirt bans on doing business inside the United States. He said they are making “an end run” around federal restrictions “to do business in America on a private or ‘unregulated’ basis.”
But the Trump administration’s actions against Huawei are not coordinated. While the FCC acts against Huawei, the antitrust division of the Department of Justice is buoying Huawei’s prospects by working to degrade America’s ability to compete against it in 5G technology.
This is the latest twist in a long saga. In 2018, President Donald Trump barred purchases of Huawei equipment by the U.S. government. Washington later followed up with a wider ban on the sale of key parts by Huawei to U.S. telecom networks. These actions were predicated on myriad instances of Huawei exemplifying Chinese business ethics, stealing American intellectual property and jobs, while enabling industrial and military espionage.
One story is now industry lore: The general counsel of Cisco had to confront Huawei’s founder Ren Zhengfei over the theft of intellectual property. His proof? Huawei’s technical manual had imported every detail, even typos from Cisco’s technical manual. In a separate incident, Huawei employees visiting a T-Mobile lab photographed and measured parts of Tappy, a robot used for testing smartphones. When they found that wasn’t enough, they stole a part.
Worst of all, was hard evidence from the Netherlands to Australia that Huawei’s networking equipment gave Beijing a backdoor into conversations and data. Huawei was investigated in the United States for fitting cell towers to capture and disrupt sensitive communications in military bases and disrupt the U.S. Strategic Command. With bans by both the Trump and Biden administrations, it seemed this gap in national security was patched — until Carr took public action against Huawei.
FCC’s actions, however, are undermined by freelancing by Omeed Assefi, who ran the Justice Department’s Antitrust Division until Trump’s nominee Gail Slater could be confirmed in March. While Assefi was temporarily in charge, he made the inexplicable decision to sue to block a merger targeted by Biden regulators. In January, Assefi announced his lawsuit against Hewlett Packard Enterprise for its $14 billion acquisition of Juniper Networks, both of which make wireless local area network technology.
Industry analysts had applauded this deal as a smart combination of HPE’s business acumen with Juniper’s upstart mentality. The progressive antitrusters of the Biden administration did not see it that way. As they did with practically every tech merger of size, they held it up for a long investigation. Not a single customer complaint was filed. The last thing America’s innovators need is such an antitrust own goal. 5G wireless technology reduces latency and provides faster speeds to enable the emerging “internet of things” — autonomous vehicles, industrial automation, remote surgery, and smart cities. If the United States doesn’t lead on 5G, it doesn’t lead.
In this context, Assefi’s lawsuit makes no sense. Both HPE and Juniper are in fierce competition, nationally and globally, with other U.S. companies — Cisco, Fortinet, and Arista. They are all duking it out with each other but also with the globally dominant player, Huawei. In 2023, Huawei had a 31% share of the worldwide 5G market.
According to former Rep. Tom Feeney, who served on the Judiciary Committee’s antitrust subcommittee, Germany “keeps slow-walking its ban and in 2022 close to 60% of German 5G came from Chinese companies. Huawei has a higher market share in Berlin than even Beijing … As Trump renegotiates America’s trading relationship with the European Union, it’s possible Huawei could gain even more influence there.”
Europeans, sufficiently alarmed by their dependency on China, have restrained their customary objections to U.S. tech mergers. Regulatory authorities in the United Kingdom and European Union approved this merger. Why, then, did the antitrust division set out early this year to hobble our own players?
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January is always an awkward time for a new administration. The president is settling into the Oval Office, but his Cabinet is still waiting to be confirmed. As all the pieces and players fall into place, it’s like listening to an orchestra tuning up, the strings, woodwinds, brass, and percussion sections issuing discordant notes.
This is one discordant note that Trump and Assistant Attorney General Slater should smooth over. All it takes is for the conductor to raise his baton.
Robert H. Bork Jr. is president of the Antitrust Education Project.