O-RAN Alliance made safer for US firms in controversial new rules

Supplying US or even US-origin technologies to Huawei and other sanctioned organizations has long been prohibited under US export rules. Enforced strictly, those rules should have stopped companies from participating in standards-setting bodies like the 3GPP, which feature Huawei and other blacklisted firms. An exception was made in June 2020 to prevent the US from losing its influence in the groups behind 5G and other important standards. Yet the uncertainty remained, especially when it came to less mature groups.

It is why Nokia, a Finnish equipment maker with a big US presence, last year temporarily stopped making technical contributions to the O-RAN Alliance, a young group developing new specifications for mobile networks. Nokia appeared worried about three Chinese members of the O-RAN Alliance subject to one US restriction or another. It resumed activities when the O-RAN Alliance sought to make itself more transparent, and possibly after receiving an assurance from US authorities that it did not risk prosecution. But the continued participation in the O-RAN Alliance of companies on the Entity List (a US trade blacklist) appeared to make some other members uncomfortable.

Figure 1: Joe Biden is making it easier for US firms to participate in standards-related activities.
(Source: The White House via Creative Commons)

Under rules announced by the Biden administration this week, that discomfort should vanish. Unveiled by the Bureau of Industry and Security (BIS), a part of the US Department of Commerce, they are designed to address the lingering anxiety about cooperating with Entity List organizations on "standards-related activities."

That phrasing, which BIS uses in its latest statements, seems critical. In its June 2020 rule, BIS referred to "standards organizations," an official label for well-established groups, including the 3GPP, that meet various World Trade Organization criteria. Despite the changes it made after the Nokia affair, the O-RAN Alliance does not look fully compliant. Its founder members – AT&T, China Mobile, Deutsche Telekom, Orange and NTT Docomo – still have veto rights, for instance. The more expansive "standards-related activities" brings the O-RAN Alliance into the fold.

At odds with the broader clampdown

It is undoubtedly good news for the fledgling group, set up to work on specifications for more open and interoperable mobile networks. With O-RAN Alliance technologies, an operator would theoretically be able to combine radio access network products from multiple suppliers at the same mobile site. In a traditional network, all components and software would typically come from the same vendor's system.

Yet the organization did not respond to Light Reading's request for comment on the rule change, which looks at odds with other moves against China and Russia by the Biden administration. The US continues to prohibit the sale of various semiconductor tools and technologies to Huawei, SMIC (a Chinese semiconductor foundry) and other blacklisted firms. In recent weeks, concern about sharing US expertise with China has led to a new embargo on the sale of EDA software, used in the semiconductor-manufacturing process, to Chinese companies.

Authorities presumably felt the US had more to lose than gain from restrictions that shut American companies out of standards-setting groups. "Today's rule continues to prevent technology transfers that harm our national security while ensuring that US companies fully participate and lead in standards development," insisted Thea Rozman Kendler, the assistant secretary of commerce for export administration, in prepared remarks.

US policymakers have also championed open RAN, the concept the O-RAN Alliance promotes, seeing it as a potential spur for US companies and future alternative to Huawei. Together with Sweden's Ericsson and Finland's Nokia, the Chinese vendor has dominated the market for mobile network infrastructure. Open RAN, US policymakers hope, will generate homegrown options for US networks.

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The irony is that the O-RAN Alliance now features dozens of Chinese companies, including ZTE, a vendor once again under scrutiny for its dealings in Iran, and Phytium, a Chinese chipmaker that still features on the Entity List. Also listed on its membership page are two Russian organizations – Yadro, which makes servers and is designing its own chips, and Skoltech, a university in Moscow. In August, it was added to the Entity List because of the "close relationship" it was believed to have had with Russia's military for nearly ten years. Uralvagonzavod, a tank manufacturer, and Mashinostrovenia, a missile maker, are just two of the "sanctioned Russian weapon development entities" apparently involved with Skoltech.

"This is great news for all the Chinese and Russian companies that are a part of the O-RAN Alliance," said John Strand, the CEO of Danish advisory firm Strand Consult, after the BIS update. Biden's critics are bound to complain that blacklisted Chinese and Russian entities have been given unfettered access to the expertise of companies such as Cisco, Intel and Qualcomm, all of which participate in the O-RAN Alliance next to dozens of other US firms. Given the charge that the O-RAN Alliance remains insufficiently transparent, it is a controversial move.

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— Iain Morris, International Editor, Light Reading