US Antes $1.5B to Keep 5G Plans Alive and Secure

The U.S. hopes to boost domestic wireless equipment competition with gear made by China’s Huawei.

The move comes amid a festering national security dispute between the federal government and the Chinese manufacturer, whose equipment has played a major role in the rollout of a national 5G network.

The Chinese company’s products are widely believed to present an “unacceptable” national security risk for the U.S., given the multinational’s close relationship with the Chinese government and its intelligence arm.

As a result, the federal government is reportedly making a $1.5 billion investment  in “Huawai alternatives,” as reported by Axios, that is meant to mitigate the risk.

The United States isn’t alone in this fear. Other major governments including Japan, Australia, and Canada have blacklisted Huawei technologies from operating on their wireless carriers’ high-speed networks.

A representative from Hauwei did not respond to a request for comment. The company has repeatedly denied allegations that its telecommunications equipment could be used by the Chinese government as a tool for global spy craft and cyber espionage.

The Future and 5G

Technology and security are often inextricably linked. Huawei’s products are priced on the lower end of the market, making them the most affordable option for many smaller telecommunications providers and carriers who don’t have the scale and size to absorb higher costs.

Most telecom operators and carriers globally are using the major incumbents like Huawei to build out their big-bet investments in 5G infrastructure, which is seen as a critical foundation for the country’s consumer-led economy.

One frontrunner seen as a possible beneficiary of the government seed money is the Open Radio Access Network (ORAN), which counts involvement from the country’s three biggest telecom operators — Verizon, T-Mobile and AT&T.

Broadly speaking, the investment is designed to help domestic companies bring their offerings up to speed, quite literally, without opening an inadvertent backdoor to a foreign actor.

Why It Matters

To be sure, fifth-generation (5G) networks are poised to revolutionize the way people interact and connect online in real-time. Where 3G networks provided cellphones with internet access, and 4G allowed streaming video to enter the mainstream, 5G is reportedly up to 100-times faster.

As such, with vastly more data capacity than existing networks, 5G is believed to be the tip of the spear when it comes to supporting and enabling future internet-reliant innovations like virtual reality (VR), augmented reality (AR), immersive experiences across metaverses, and even the broader feasibility of autonomous vehicles and remote surgeries.

The issue behind the specter of Hauwei’s threat to America’s economic and national security is that the company has taken an early and sizable lead in developing 5G technology, and currently sits atop the consolidated global market for wireless equipment, alongside other non-U.S.-based companies like Samsung, Nokia and Ericcson.

Efforts to create a U.S.-based alternative to compete against the hegemony of foreign offerings are supported by both the government and private businesses. As it stands, the balance of power does not favor the United States. China enjoys a projected 5-year lead over America in realizing a fully scaled, nationally connective 5G infrastructure.

5G will revolutionize the mobile experience, changing the app user experience and unlocking the potential for all new products and platforms. Of course, consumers will need to have a phone with 5G connectivity to enjoy the advantages of the network. Given the current economic realities and their corresponding consumer sentiment, paired with the heftier price tag of 5G devices, it’s unclear how quickly mainstream adoption will proceed.