Loyola University Chicago School of Law, JD 2023
On October 20, the House of Representatives passed several bills directed at the Department of Homeland Security (“DHS”) and the Department of Commerce (“DOC”) that may impact network security compliance measures affecting U.S. businesses. These bills take aim at much of the software and network technology used by companies within the supply chain to ensure that security is not dismissed in the effort to cut costs and to maintain healthy competition between network communication equipment vendors.
Where does the need for this regulation come from?
In recent years, concerns have risen out of the fact that foreign companies, specifically Chinese companies, have dominated much of the telecommunication network equipment sales in the U.S. The fear faced by the U.S. government and other businesses within the U.S. is two-fold, allowing China to continue to dominate network infrastructure in the U.S. poses not only an economic threat, but a national security threat that would impact America’s current key role on the global stage. The critical development driving Chinese growth comes from the expansion of 5G across the world. Between 2015 and 2020, China outspent the U.S. by roughly $24 billion in terms of 5G infrastructure, which has allowed China to build roughly twelve times the 5G base stations that the U.S has. Having a strong grasp on the emergence of 5G would establish a country as the worldwide leader in technology as well as grant an advantage in terms of national security.
The company driving such rapid advances for China and putting countries around the world on notice is Huawei, the same company that was charged with racketeering and conspiracy to steal trade secrets by the Department of Justice just one year ago. These attempts to gain and take from their U.S. counterparts come from stolen intellectual property through employees misappropriating information as well as using backdoors intended for law enforcement to access networks.
How are these concerns being addressed?
There are three bills in total aimed towards shoring up network and supply chain security. The first, the DHS Software Supply Chain Risk Management Act of 2021, requires that DHS contractors submit software bills of materials that show the origins of each component of the software furnished to the DHS. Second, the Information and Communication Technology Strategy Act, was developed with the purpose to maintain the competition within those companies involved in the information and communication technology supply chain. With the exception of Cisco and a handful of foreign companies, many of the companies providing inexpensive communications equipment hail from China thus providing potential “backdoors” to China. This Act requires the DOC to create a report of government strategy ensuring that trusted vendors within the U.S. maintain competitiveness. The report is required to be produced within a year and supports U.S. dependency on certain vendors as well as what resources could be provided to reduce the dependence on these foreign actors.
The third and final bill within this set is the Open RAN Outreach Act. This Act specifically addresses the equipment used within Open Radio Access (“Open-RAN”) networks, which are networks which use an infrastructure that allows the use of different components produced by different companies; creating more options for carriers. These networks facilitate several different uses within the cell phone network, including radios, hardware, and software. Under this bill, the DOC must provide technical assistance to small network providers who use these technologies and provide them with information regarding the pros and cons of using such networks. In addition, they must provide information about getting access to the Wireless Supply Chain Innovation Grant Program, which provides funds to replace foreign equipment in U.S. infrastructure.
What are the next steps?
All three bills have now passed the House, and the bills have been received by the Senate and referred to the Senate Committee on Commerce, Science, and Transportation. At the same time, innovation has already begun to turn towards the introduction of 6G. As China has firmly established itself as the leader in the 5G space, a number of technology giants, including Apple, AT&T, Google, and Samsung, have formed the Next G Alliance in an attempt to usher in the age of 6G, which could be up to 100 times faster than the speed of 5G. At the same time, the Next G Alliance would surely welcome any assistance from Congress to slow the progress of their Chinese counterparts and hinder the unfair advantage they have come to hold.