WASHINGTONSeeking to blunt the dominance by Chinas Huawei Technologies Co., the White House is working with U.S. technology companies to create advanced software for next-generation 5G telecommunications networks.The plan would build on efforts by some U.S. telecom and technology companies to agree on common engineering standards that would allow 5G software developers to run code atop machines that come from nearly any hardware manufacturer. That would reduce, if not eliminate, reliance on Huawei equipment.
Companies including
Microsoft Corp.,
Dell Inc. and
AT&T Inc.
are part of the effort, White House economic adviser
Larry Kudlow
The big-picture concept is to have all of the U.S. 5G architecture and infrastructure done by American firms, principally, Mr. Kudlow said in an interview. That also could include
because they have big U.S. presences.
The U.S. contends Huawei has strong links to the Chinese military, making use of its equipment a national-security risk. Huawei has denied such links and says it operates independently.
Mr. Kudlow said Dell founder
Michael Dell
was a strong backer of the project, noting that software is becoming more important as 5G develops.
Dell and Microsoft are now moving very rapidly to develop software and cloud capabilities that will, in fact, replace a lot of the equipment, he said. To quote Michael Dell, Software is eating the hardware in 5G, Mr. Kudlow said.
The effort is in a preliminary stage and still faces many obstacles, including bringing together different companies with varying priorities. Cellular networks use highly specialized technology that is mostly new to enterprise software companies like Microsoft and Dell. But White House officials are taking the effort seriously because of the potential value of 5G technology to the broader economy.
Industry boosters say the engineering standard will power an Internet of Things in which factories, household appliances and vehicles are connected in the way mobile phones are now. They say 5G can do for future tech startups what 4G technology did for smartphone apps like
Uber Technologies Inc.
Snapchat Inc.,
building a foundation for future innovation.
In the global race for 5G, U.S. telecom firms have a unique disadvantage: limited access to the goldilocks band of radio frequencies. That’s pushing U.S. firms toward a less practical version of 5G. WSJ explains the science and its implications. Illustration by Carlos Waters / The Wall Street Journal
Huawei wont be easy to unseat as the global leader, however.
Huawei is the worlds top seller of telecom equipment, followed by Finlands Nokia Corp. and Swedens Ericsson AB, according to market researcher DellOro Group. It has won fans globallyincluding small rural telecom carriers in the U.S.for the quality of its equipment and the companys technical support.
Over American objections, the U.K. recently decided to permit Huawei to build part of the countrys 5G system.
Andy Purdy,
Huaweis chief U.S. security officer, said American officials shouldnt sideline the Chinese telecom giant.
If the U.S. wants 5G hardware and software developed by a U.S. or European company, the government should encourage companies to begin negotiations with Huawei to license our 5G technology, Mr. Purdy said, adding that without the companys intellectual property, the combined product will be 1-2 years behind the comparable Huawei products in terms of functionality and assurance.
Paul Triolo,
head of global technology policy at the Eurasia Group, a business consulting firm agreed that Huawei has a formidable lead.
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The problem is youre starting late in the game to fix this problem, Mr. Triolo said of the U.S. effort. He added that the initiative could also threaten Finlands Nokia and Swedens Ericsson by making their machines a commodity, Mr. Triolo said.
Representatives of Nokia and Ericsson didnt immediately offer comments.
Other potential issues could slow the project. If U.S. and European companies work separately, it could take longer to develop world-beating technology. If they work together, it could raise antitrust concerns.
Mr. Kudlow said he didnt believe antitrust would be an issue, saying the companies would compete in providing 5G technology. Were taking a coordinating role among leading companies, he said.
He didnt provide a specific time frame, though others in the government have said they expect to have a system running within 18 months. Earlier, the White House had considered subsidizing a new hardware competitor to Huawei or backing a government-owned 5G network but had rejected both.
President Trump is squarely behind the effort, said Mr. Kudlow, who is leading the initiative as director of the National Economic Council.
The president kept saying to me, Cant we just put it (5G) under one simple infrastructure? Mr. Kudlow said. Were trying to create an American soup-to-nuts infrastructure for 5G. He kept hearing that Huawei seems to be able to do it.
U.S. lawmakers have also proposed funding research and development into open 5G software standards. A bipartisan group of senators in January proposed tapping proceeds from the Federal Communications Commissions coming spectrum license auctions to pay for research grants into those technologies.
The administration is looking into those efforts but hasnt yet decided whether to back them, Mr. Kudlow said.
Internationally, U.S. officials have discussed their 5G development plans to try to convince allies to ban Huawei equipment. Huawei is deeply ingrained in countries like the U.K. and Germany. Mr. Kudlow said he hoped the software project would help the U.K. reverse its recent decision to permit Huawei to build part of its 5G network.
The software development push has attracted interest from U.K. officials who want domestic cellphone carriers to have more suppliers to choose from other than Huawei and its Scandinavian rivals, according to a person familiar with the matter.
At the same time that the U.S. is trying to block Huawei overseas, the administration is split on whether U.S. companies should continue to supply the firm, which is on a Commerce Department blacklist. The Defense Department recently opposed a Commerce rule that would close a loophole that allowed U.S. firms to continue selling computer chips and other products that arent deemed sensitive from a national security perspective.
The Pentagon argued that if U.S. companies lose Huawei as a customer, they will have fewer profits to pour into research and development.
Mr. Kudlow signaled that he was aligned with the Pentagon view. We dont want to put our great companies out of business; the president is a strong believer in that, he said. But on the other hand, we are very aware that Huawei is a threat to our national security.
Write to Bob Davis at bob.davis@wsj.com and Drew FitzGerald at andrew.fitzgerald@wsj.com
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