Exclusive: US version writes rule to allow Huawei and US companies to work together on 5G standards – sources

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(Reuters) – The US Department of Commerce is about to approve a new rule that would allow US companies to work with Huawei Technologies in China to set standards for next generation 5G networks, people familiar with the matter said .

FILE PHOTO: A Huawei logo is seen on a device during a media event in London, Britain, February 18, 2020. REUTERS / Peter Nicholls

Engineers from some US tech companies stopped working with Huawei to develop standards after the Commerce Department blacklisted the company last year. The list left companies unsure of the technology and information their employees could share with Huawei, the world’s largest maker of telecommunications equipment.

This has disadvantaged the United States, said industry and government officials. During standardization meetings, where protocols and technical specifications are developed to allow equipment from different companies to work together smoothly, Huawei gained a stronger voice as American engineers sat in silence.

The Commerce Department placed Huawei on its “list of entities” last May, citing national security concerns. The list restricted sales of American products and technology to the business and raised questions about how American companies could participate in organizations that set industry standards.

After nearly a year of uncertainty, the ministry has drafted a new rule to resolve the problem, two sources told Reuters. The rule, which could still change, essentially allows American companies to participate in standards organizations of which Huawei is also a member, the sources said.

The project is under final review by the Commerce Department and, if approved, would be submitted to other agencies for approval, people said. It is not known how long the whole process will take or whether another agency will oppose it.

“As we approach the end of the year, it is high time that this is resolved and clarified,” said Naomi Wilson, senior policy director for Asia at the Information Technology Industry Council (ITI), who represents companies like Amazon.co Inc, Qualcomm Inc and Intel Corp.

The U.S. government wants U.S. businesses to remain competitive with Huawei, said Wilson. “But their policies inadvertently caused American companies to lose their seat to Huawei and others on the list of entities. “

The rule should only apply to Huawei, said those familiar with the matter, and not to other listed entities such as the Chinese video surveillance company Hikvision.

Adding Huawei to the list last May, the Commerce Department cited US charges against the company for alleged breaches of US sanctions against Iran. He also noted that the indictment alleged that Huawei had committed “deceptive and obstructive acts” to evade US law. Huawei has pleaded not guilty in this matter.

A Commerce Department spokesperson declined to comment. A Huawei spokesperson also declined to comment.

“I know the trade is working on this rule,” a senior State Department official told Reuters on Wednesday. “We are in favor of finding a solution to this riddle.”

The White House and the Departments of Defense, Energy, and the Treasury did not immediately respond to requests for comment.

“The establishment of international standards is important for the development of 5G,” said another senior administration official, who also did not want to be identified. “The discussions are about balancing this consideration with the national security needs of the United States.”

Six US senators, including Chinese hawks Marco Rubio, James Inhofe and Tom Cotton, sent letters to the Secretaries of Commerce, State, Defense and Energy last month regarding the emergency to publish regulations confirming that US participation in the standardization of 5G is not limited by the list of entities.

“We are deeply concerned about the risks to the United States’ world leading position in 5G wireless technology due to this reduced participation,” the letter said.

In the telecommunications industry, 5G or fifth-generation wireless networks should power everything from high-speed video transmissions to autonomous cars.

Industry standards are also a big deal for telecommunications companies. They are vying for their patented technology to be considered essential to the standard, which can boost the profits of a multi-billion dollar business.

Wilson of ITIC said uncertainty has led U.S.-based standards organizations to consider moving abroad, noting that the nonprofit RISC-V (pronounced risk-five) has decided to move from Delaware to Switzerland a few months ago.[L2N27N1JY]

The foundation oversees the promising semiconductor technology developed with the support of the Pentagon and, as Reuters reported, wants to make sure that those outside of the United States can help develop its open-source technology.

Karen Freifeld report; edited by Chris Sanders, Steve Orlofsky, Cynthia Osterman and David Gregorio

Our standards:Principles of the Thomson Reuters Trust.

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