Cyber Week in Review: November 22, 2019

U.S. Extends Deadline for Companies Affected by Huawei Ban

The Trump administration has granted a 90-day extension for U.S. companies to continue “specific, limited engagements” with Chinese telecoms group Huawei, which the Department of Commerce placed on an economic blacklist earlier this year, citing national security risks. As with previous extensions, companies are required to obtain a special license from the U.S. government to sell technology to entities on the blacklist. The Temporary General License extension is the third issued since May and allows Huawei to purchase some U.S.-made goods while offering a reprieve for rural wireless providers in the United States, 25 percent of which rely on Huawei equipment.

Friday the Federal Communications Commission voted unanimously to bar federal subsidies to rural companies that use Huawei or ZTE equipment. The FCC also voted to gather information on how much Huawei and ZTE gear is actually in rural networks and to estimate the costs of removing it. Some analysts estimate that “ripping and replacing” all Huawei equipment would cost rural broadband providers around $1 billion, and the FCC also called for input on proposals for the government to pay the costs.

Bipartisan Coalition of U.S. Senators Asks White House to Appoint 5G Coordinator

In a letter to Robert O’Brien, President Trump’s national security adviser, a bipartisan coalition of senators urged the Trump administration to create a new White House position to coordinate policy on 5G wireless technology. The senators underscored the potential for 5G technology to pose an economic and national security threat and the importance of a “coherent national strategy” with a designated point person to ensure that the United States does not fall behind on deploying the technology. The call to action follows a series of false starts in the administration’s efforts to push 5G technology forward, including the stalled merger of T-Mobile US Inc. and Sprint Corp., which was conditioned on the two corporations’ commitments to accelerate 5G development. It is unclear whether the White House will heed the senators’ request, considering its recent move to reduce staff in the National Security Council, including those in cybersecurity roles.

Russia-led UN Resolution on Cybercrime Passes, Despite U.S. Opposition

On Monday, a cybercrime-focused resolution backed by Russia that calls for a check on the use of information and communications technologies for criminal purposes passed at the United Nations. It also proposes the formation of a new working group on cyber norms at the United Nations, which would join two other discussions, the UN Group of Government Experts and the Open-End Working Group. The United States, its Western allies, and human rights advocates opposed the resolution on the grounds that it provides few details for how countries should regulate these technologies to prevent cybercrime. They also warned that it would allow Russia and China to take the lead in establishing global cyber norms based on wide-reaching surveillance and government control of the internet. Many of the countries that voted in favor of the resolution have already taken steps to restrict domestic cyber activity in the name of preventing cybercrime, such as Kenya, which adopted a law in May 2018 that criminalized 17 different types of cyber activities.

Iran Blacks Out Internet in Response to Nationwide Demonstrations

As demonstrations broke out in over one hundred cities in response to rising fuel prices, the government of Iran disconnected the country’s internet. Iran’s largest mobile network operators were shut off, causing network connectivity to run below 4 percent of normal levels and remaining available only to select users. After five days, the shutdown, which was logistically more complex than any previous efforts to separate a country from the internet, appears to be lifting. In response to Iran’s shutdown of its internet, the United States sanctioned Mohammad Javad Azari Jahromi, Iran’s prominent telecommunications minister. Though fuel prices are still well below global market prices, the sudden 50 percent hike has angered Iranians who have not only come to expect cheap fuel as a birthright, but have also suffered a crippling economic crisis precipitated by the reimposition of U.S. sanctions, President Donald Trump’s withdrawal of the United States from the 2015 nuclear deal, and government mismanagement. Over one hundred people have died as a result of the Iranian government’s crackdown against the protests.

Chinese Regulators Scrutinize Acquisition of China-Linked Company by U.S. Chipmaker

China’s antitrust regulator is closely monitoring U.S. chipmaker Diodes Inc.’s proposed $428 million acquisition of Taiwan’s Lite-On Semiconductor Corp. Regulators are responding to complaints that a deal will deliver the Taiwanese company’s Shanghai-based affiliate, On-Bright Electronics Inc., into U.S. hands. To safeguard China’s push to develop homegrown semiconductor technology and reduce reliance on U.S. chipmakers, China’s State Administration for Market Regulation will consider asking that Chinese assets be excluded from the deal. U.S. acquisition efforts in China have been subject to heightened investigation in light of ongoing U.S.-China trade talks and the sweeping addition of Chinese technology companies to an entity blacklist. Last year, U.S. multinational Qualcomm failed to win China’s approval to acquire NXP Semiconductors, while the United States has similarly scrutinized a number of Chinese efforts to acquire U.S. companies due to national security concerns.

Editor's note: There will be no Week in Review next week in observance of the U.S. Thanksgiving holiday. We will publish the next Week in Review on December 6.