The Department of Commerce announced a new rule Monday that will allow American companies to work with the Department and Huawei to develop standards for the telecommunications sector, a step meant to bolster U.S. leadership and innovation in the emerging 5G marketplace
“International standards serve as the critical building blocks for technological development by enabling functionality, interoperability, and safety,” the statement said. “U.S. participation and leadership in standard-setting influences the future of 5G, autonomous vehicles, artificial intelligence, and other cutting-edge technologies.”
The decision is designed to “ensure Huawei’s placement on the Entity List in May 2019 does not prevent American companies from contributing to important standards-developing activities despite Huawei’s pervasive participation in standards-development organizations.” The new rule seeks to include key industry players in conversations when developing these standards, ensuring American companies have a leadership role in the industry.
“The United States will not cede leadership in global innovation. This action recognizes the importance of harnessing American ingenuity to advance and protect our economic and national security,” Secretary of Commerce Wilbur Ross said. “The Department is committed to protecting U.S. national security and foreign policy interests by encouraging U.S. industry to fully engage and advocate for U.S. technologies to become international standards.”
The placement of Huawei, the world’s largest telecommunications equipment maker, on the Entity List has inhibited U.S. sales of goods and technology to Huawei over national security concerns. This supposedly put the U.S. at a disadvantage when setting standards because of its inability to work with Huawei. Since American companies were unclear about what they could share with Huawei they often limited their participation, giving Huawei a more dominant role in the process.
“Confusion stemming from the May 2019 entity list update had inadvertently sidelined U.S. companies from some technical standards conversations, putting them at a strategic disadvantage,” Naomi Wilson, senior director of policy for Asia, at the Information Technology Industry Council, representing companies such as Amazon, Qualcomm, and Intel said. “This much-needed clarification will allow companies to once again compete and lead in these foundational activities that help enable the rollout of advanced technologies, such as 5G and AI, across markets. We look forward to reviewing the rule once posted and working with the administration on implementation.”
The new rule means that technology that would not have required a licensed to disclose to Huawei before it was placed on the Commerce Department’s “Entity List” now cannot be disclosed without a license for standard-development purposes. Further, the Department notes that“[i]n amending the Huawei Entity Listing, the rule promotes U.S. national security and foreign policy interests by facilitating U.S. leadership in standards-development bodies.” Additionally, the original Bureau of Industry Security (BIS) general opinion from August 2019 is no longer in effect. The Department adds that it will continue to work with stakeholders and take necessary actions to uphold U.S. national security and foreign policy, while maintaining U.S. leadership and innovation.
This new ruling comes after the Senate passed a bill to replace Huawei network gear in March, the Trump Administration extended Huawei’s ban until May 2021, and U.S. regulators were considering closing a chip loophole for Huawei.