Attorney General Barr: The US, Allies Should Take Nokia or Ericsson Stake for 5GAttorney General Barr: The US, Allies Should Take Nokia or Ericsson Stake for 5G
White House officials have reportedly discussed incentives for US private equity firms to buy stakes in Ericsson or Nokia for 5G. But there appears to be discord among Trump's appointees.
February 6, 2020
US Attorney General William Barr has suggested the US purchases a controlling stake in either Nokia or Ericsson for access to secure 5G equipment. He said such a move could blunt the rise of China and Huawei in the space.
Barr also said that another recently introduced White House proposal on 5G was unworkable and "pie in the sky." That proposal, floated just a few days ago by White House economic adviser Larry Kudlow, calls for the US government to invest into software developed for 5G by US-based companies.
The situation appears to highlight a clear split among Trump's top government appointees when it comes to 5G.
One Democratic FCC commissioner said as much after Barr's comments: "It's becoming clear as day this Administration does not have a coordinated plan for our 5G future. We need one," tweeted FCC Commissioner Jessica Rosenworcel, who has often spoken against the Trump administration's policies.
Barr is Trump's attorney general, the head of the US Department of Justice and the President's top legal counsel. As the Wall Street Journal noted, he's also a former Central Intelligence Agency official who earned his master's degree in Chinese studies. Barr discussed the topic of 5G and China today during a speech at the Department of Justice's China Initiative Conference in Washington, DC.
"There are only two companies that can compete with Huawei right now as 5G infrastructure suppliers: Nokia and Ericsson. They have quality, reliable products that can guarantee performance. They have proven successful in managing customers' migration from 4G to 5G. The main concern about these suppliers is that they have neither Huawei's scale nor the backing of a powerful country with a large market, like China," Barr said.
"Some propose that these concerns could be met by the United States aligning itself with Nokia and/or Ericsson through American ownership of a controlling stake, either directly or through a consortium of private American and allied companies. Putting our large market and financial muscle behind one or both of these firms would make it a more formidable competitor and eliminate concerns over its staying power," he continued. "We and our closest allies certainly need to be actively considering this approach."
Concluded Barr: "What we need today is a product that can win contracts right now -- a proven infrastructure that network operators will make a long-term commitment to today. In other words, we need a product that can blunt and turnaround Huawei's momentum currently."
Citing a person familiar with the matter, the WSJ reported that White House officials have discussed incentives for US private equity firms to buy stakes in Ericsson or Nokia.
Representatives from Nokia (based in Finland) and Ericsson (based in Sweden) didn't immediately respond to requests for comment on the topic, according to the WSJ.
Open RAN: Not ready for prime time
In his speech, Barr also appeared to react to the proposal floated by White House economic adviser Kudlow earlier this week.
"The big-picture concept is to have all of the US 5G architecture and infrastructure done by American firms, principally," Kudlow told the WSJ. "That also could include Nokia and Ericsson because they have big US presences."
Kudlow said President Trump is "squarely behind" his effort, according to the WSJ.
Barr did not name Kudlow, specifically, but said "there has been some talk about trying to develop an Open RAN approach, which aims to force open the RAN into its components and have those components to be developed by US and western innovators."
Barr said such an approach would not work. "The problem is that this is just pie in the sky," he said. "This approach is completely untested, and would take many years to get off the ground, and would not be ready for prime time for a decade, if ever."
Trump has a history of pitting his employees and appointees against one another. Even with a reality TV show star as president, it's rare to publicly see so much discord among top US administration officials over major economic policies.
Interestingly, Barr also called for action on L-Band spectrum for 5G. That's a nod to a startup called Ligado, which has been urging the FCC to issue rules that would allow 5G operations in the L-Band spectrum it owns. The FCC hasn't yet made any indication it will act on the L-Band, and Ligado has reportedly been mulling bankruptcy.
Barr spent much of his speech outlining the threats that China and Huawei pose to the West's economy and 5G specifically. He said Western nations need to unite against such threats as they did during World War II and the Cold War.
"In the 1950s, we had the Sputnik moment that helped galvanize the nation and bring unity to our response. We have not seen a similar catalyst today," he said. "If we are going to maintain our technological leadership, our economic strength, and ultimately our national security, we need the public and private sectors to work together and come shoulder to shoulder."
Barr, of course, isn't the only Trump official that has taken a hard line against Huawei and China. A wide range of other Trump initiatives have sought to block Huawei and China in 5G, and to foster US alternatives. And that's all happening under a wider, Trump-led trade war between the US and China.
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