Huawei to FCC: Our absence from U.S. market will ‘ultimately delay 5G deployment’

China’s Huawei is now arguing that regulators should allow the company to sell its equipment to U.S. telecom companies because not doing so could “ultimately delay 5G deployment.”

The argument is contained in Huawei’s latest filing with the FCC, detailing a series of meetings between top U.S. Huawei executives, including Tom Dowding, SVP of the company’s U.S. wireless business, and FCC officials including Kris Anne Monteith, chief of the agency’s Wireline Competition Bureau.

“Huawei’s lack of presence in the U.S. would raise prices, harm competition, hinder innovation, and ultimately delay 5G deployment,” the company summarized in a filing to the FCC.

“Huawei’s entry into the U.S. market provided much-needed competition,” argued Huawei’s Dowding in the filing. “As a result of the lack of competition, equipment prices in the U.S. market in general tend to be about 20-30% higher than they are in other developed regions, for example in Europe. However, various studies have shown that the United States’ telecommunication infrastructure is falling behind those in other developed countries … In [Speedtest’s] 2018 rankings, the U.S. ranked #44 for mobile network speed and #9 for fixed broadband. A 2016 report shows the mobile network speed of United States is about 2/3 of China’s.”

Huawei’s filing stands as opposition to an attempt by the FCC to block sales of its equipment to U.S. telecom operators that receive government funding. The FCC embarked on a proposal to tacitly block any network operator—big and small—from using Universal Service Funds to purchase equipment from companies that pose a security threat. That proceeding at the FCC is widely seen as an attempt by the U.S. government to block Chinese network equipment vendors Huawei from competing in the market.

Critics of Huawei argue that, if the Chinese company sells its equipment to U.S. telecom companies, that would open a backdoor into U.S. networks for Chinese espionage. Huawei, for its part, has strenuously argued against that notion.

“A blacklist on certain equipment vendors does not address the reality that cybersecurity risks arise from various points of vulnerabilities in an international supply chain,” Huawei wrote in its filing. “In response to a staff question as to the FCC’s role in securing U.S. telecommunications equipment, Huawei emphasized that the global and complex nature of the telecommunications supply chain necessitates a comprehensive security framework to protect against threats. This framework should be developed as part of an inter-agency effort involving government entities with the authority and expertise to consider security issues. Huawei has been active in promoting cybersecurity both internally and alongside government bodies, and welcomes the opportunity to continue contributing to the development and promulgation of security standards and best practices.”

Importantly, Huawei has noted that roughly half a dozen rural wireless network operators—including United TelCom and SI Wireless—have come out in support of Huawei.

Huawei’s use of 5G as leverage in its argument is particularly noteworthy considering officials from the FCC and the wireless industry have been warning that China could embark on significant 5G deployments, and would thus beat the United States in the “race to 5G.” Now Huawei, a major Chinese company, is urging officials to allow it to sell its equipment in the United States so that the nation can more quickly build out 5G networks.

Verizon, AT&T, T-Mobile and Sprint have all announced 5G deployments, using equipment from the likes of Ericsson, Nokia and Samsung.