Fear of Chinese political influence in International Standard Setting Bodies (ISSBs) led a bipartisan coalition to propose the Promoting United States International Leadership in 5G Act of 2019 to the House of Representatives. ISSBs, such as 3GPP and the International Telecommunication Union (ITU), set telecommunications standards to ensure that companies and countries deploy interoperable technology to form a global telecommunications network.
The bill calls for an interagency working group chaired by the Secretary of State and composed of representatives of federal departments and agencies selected by the executive branch. The working group is tasked with providing a brief to the Committee on Foreign Affairs of the House of Representatives and the Committee on Foreign Relations of the Senate. To be submitted in 180 days from establishment of the working group and subsequently whenever its chair or the two committees deem appropriate, the brief will outline:
- A strategy to promote US leadership in ISSBs;
- A strategy to improve diplomatic engagements with allies in order to minimize security risks pertaining to 5G technology adoption;
- A strategy to engage with relevant stakeholders in the private sector, academia, and research and development (R&D) centers to “develop secure standards” for 5G technology;
- A discussion on the “scale and scope” of China’s influence in ISSBs and the national security risk such influence represents.
ISSBs such as 3GPP direct 5G technology deployment by elevating some patents to the role of technology standards. Members of 3GPP—mostly companies—coordinate on 5G technical specifications to be employed in all commercial applications of the technology, guaranteeing an interoperability agreed upon by all members. The status of standard marks the technical superiority of a specification, but it also serves as a powerful economic tool. Substantial revenues from licensing fees and a head start in subsequent technology developments are some of the advantages to the company issuing the patent.
“Not only does political influence undermine fair competition, it also raises serious economic and security concerns for 5G and future generations of wireless technology,” claimed Senators Mark R. Warner (D-VA) and Marco Rubio (R-FL), who are not sponsoring this bill, in a 2019 letter calling for the Intelligence Community to investigate China’s political influence on ISSBs. Anecdotal evidence, in fact, suggested China’s attempt to influence 3GPP and set Huawei’s core patents as industry standards.
“Telecom is a strategic industry and having two companies [Huawei and ZTE] with close ties to a hostile power creates risk for the United States and its allies,” wrote James Andrew Lewis, Senior Vice President and Director of the Technology Policy Program at the Center for Strategic and International Studies. He further explained that with the forecasted pervasiveness and complexity of 5G technology, network security becomes of paramount importance to limit the risk of espionage and control.
Currently, even though Chinese companies like Huawei account for a higher share of patent counts, the American company Qualcomm still dominates innovation in 5G. As of July 2019, Qualcomm’s technology has larger market coverage (patents have been filed in a larger set of countries with stronger economies) and better technical relevance (higher number of patent citations, excluding self-citations). Companies in US ally and partner countries, such as Nokia, LG Electronics, Samsung, and Ericsson, also exceed Huawei in technical relevance.
Patent portfolio valuation of declared 5G patent families (IPlytics Platform, July 2019). Source: Tim Pohlman elaborations based on IPlytics data. A patent family is a group of patents related to the same technical specifications. Family Share indicates 5G patent families declared by each firm as a share of all patent families in July 2019. Technical Relevance (TR) counts the number of forward citations, excluding self-citations and subsidiary citations. Market Coverage (MC) counts the number of countries of patent filing weighed by GDP. All variables are normalized by year, the country of jurisdiction, and main patent classification.