September 14, 2021
In the time it took Emma Raducanu to go from tennis unknown to US Open-winning global superstar, the O-RAN Alliance has pulled off a similarly improbable and stunning transformation. Just days ago, Nokia paused all technical activity in the group, apparently worried it was not compliant with US law. After a few changes executed as swiftly as a Raducanu forehand, the Finnish equipment maker's concerns have seemingly vanished.
It had been worried that several Chinese members of the O-RAN Alliance are in the US bad books. Sharing American expertise with those companies – in the form of US employees or US-origin technologies – risked penalties. Nokia has long claimed to be one of the oldest members of the club, and one of its most active contributors. It also has thousands of employees based in the US.
So what has changed between August 27, when Politico first wrote about Nokia's pause, and today? Not much, discernibly. In recent weeks, the most noticeable difference is that Kindroid, an obscure Chinese company that Joe Biden added to his trade blacklist (the notorious Entity List) in July, has disappeared from the membership pages. Its removal, however, is apparently down to non-payment of membership fees.
Meanwhile, Inspur and Phytium, two other Chinese firms deemed bad actors by the US (Phytium is also on the Entity List, while US investors are prohibited from owning Inspur shares), are still named as O-RAN Alliance contributors. Nokia has not suddenly thrown its US staff overboard. Other members are also crewed by Americans using American technology. The rift between China and the US still yawns.
Nope, the big reveal is that the O-RAN Alliance has now "approved changes to O-RAN participation documents and procedures." And while the details were concealed from the prying eyes of the public, this exercise in bureaucracy seems to have calmed Nokia's nerves.
"Nokia is delighted that the important work of the O-RAN Alliance can now continue fully and Nokia's technical contributions to the Alliance will resume," it said in a statement issued moments after the O-RAN Alliance's own update. "The speed with which the Alliance has been able to resolve recent issues speaks to the spirit of community and co-operation on which it was founded."
Looking more respectable
For all the group's opacity, its "approved changes" may have been intended to make the O-RAN Alliance look more respectable – more like a proper standards body, in other words. Committed members had grumbled that penalizing it would be unfair when Nokia and others are allowed to routinely share their expertise with Huawei, a blacklisted Chinese vendor, inside the 3GPP and similar organizations. The O-RAN Alliance should be extended the same treatment, they argued.
Unfortunately, a new club cannot simply decide to be universally acknowledged as a standards body. The World Trade Organization has very exacting requirements of what a standards body should be. Transparency and fairness to contributors are high on the list. As recently as August, the European Commission (EC) doubted the O-RAN Alliance would qualify.
Without further details, the EC and others are unlikely to be convinced by the O-RAN Alliance's latest four-paragraph update. It risked non-compliance with WTO criteria, said the EC in its August report, partly because it has not made essential information "easily accessible to all interested parties." The vague statement it issued today seems to back up that criticism, as does its failure to respond to questions posed by Light Reading.
The EC had also argued that O-RAN Alliance procedures are "not open in a non-discriminatory manner during all stages of the standard-setting process." It went on to attack the veto given to founder members, noting that "although interested contributors have opportunities to contribute to the elaboration of the specifications, the founding members have a privilege, because they have the necessary minority of more than 25% to block proposals."
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It is hard to believe those founder members – comprising AT&T, China Mobile, Deutsche Telekom, NTT DoCoMo and Orange – have agreed in the space of a week to relinquish the veto and effectively give up control of the group. The O-RAN Alliance, of course, did not respond to a question about this. But if the veto does remain, certain prominent US politicians cannot be happy that a firm controlled by China's government retains this much power.
When Politico published its report, Michael McCaul of the House Foreign Affairs Committee was quick to tweet his approval of the Finnish move. "I commend Nokia for suspending its activities in the O-RAN Alliance," he said. "It is well reported that CCP [Chinese Communist Party] military companies are participating in the O-RAN Alliance."
Back in business
And yet Nokia has speedily resumed work, something it would surely not have done without legal reassurance. "It is possible that some US firms could be satisfied with the O-RAN Alliance proposals, but the fact remains that Chinese firms still exert disproportionate authority on the group," said John Strand, the CEO of Danish advisory group Strand Consult, in a research note.
A study carried out by his firm last year showed that 44 Chinese companies are members of the O-RAN Alliance. They include all three state-controlled operators and ZTE, a Chinese vendor that was removed from the Entity List as recently as 2018, after it had agreed to pay enormous fines, replace executives and be supervised by US authorities.
"It is not yet clear whether Biden/NTIA [the National Telecommunications and Information Administration] will weigh in on the matter, but this could be interpreted as placating or even going soft on China," said Strand in today's research note. The O-RAN Alliance will just have to pray that Nokia's return to the fold marks the end of the affair.
— Iain Morris, International Editor, Light Reading
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