US close to drafting a rule allowing firms to work with Huawei on 5G networks

The Chinese firm was blacklisted following an executive order by President Trump last year

Huawei was placed on a Security Entity List by the US Department of Commerce in May 2019. Reuters

The US is close to drafting a new rule to allow Huawei Technologies and US firms to work together on setting standards for next-generation 5G networks, according to a report by Reuters.

The development comes nearly a year after the US Department of Commerce blacklisted the Chinese telecom firm, accusing it of using its high-tech equipment to spy for the Chinese government.

The company was placed on a Security Entity List by the US Department of Commerce in May 2019, following an executive order by President Donald Trump. The order prohibits Huawei from buying products and services from US companies.

Following the blacklisting, engineers in some US technology companies stopped engaging with Huawei to develop standards for the 5G network. Companies were also unsure about what technology and information their employees could share with Huawei, the world’s largest telecommunications equipment maker.

“I know that [the Department of] Commerce is working on that rule,” a senior State Department official told Reuters. “We are supportive in trying to find a solution to that conundrum.”

“International standard setting is important to the development of 5G,” said another senior administration official. “The discussions are about balancing that consideration with America’s national security needs.”

In the telecommunications industry, 5G, or fifth-generation wireless networks, are expected to power everything from high-speed video transmissions to self-driving cars.

A 5G network delivers internet speed of up to 1.2 gigabits per second, which will gradually evolve to reach 10Gbps — more than 100 times faster than 4G.

Huawei, which is also China's biggest smartphone maker, saw its annual revenue rise 18 per cent to more than $122 billion (Dh447.7bn) in 2019. In 2018, the company had grown revenue by 19.5 per cent.

"The US campaign has two aspects – it is limiting our ability to sell in the US and its allies and it is creating roadblocks before us to buy from nearly 300 American companies," Andy Purdy, Huawei's chief security officer in the US, told The National in March.

To mitigate the fallout from the restrictions, Huawei is sourcing from suppliers outside the US. This shift in supply lines could become permanent if the situation regarding its status in the US does not change, Mr Purdy said.

The US has also pushed its allies such as the UK, Australia, Canada and Norway to exclude Huawei from 5G network deals, citing security risks. However, Huawei has repeatedly refuted claims that its products could be used for spying.

The new draft rule is under final review at the Commerce Department and, if cleared, would go to other agencies for approval, according to the report. It is unclear how long this process would take or if another agency will object to it.

Huawei is also one of the world’s largest investors in research and development. The company invested $15bn in R&D in 2018 and has plans to invest an additional $100bn over the next five years.