Today Germany is going to award a hefty financial prize to someone and a major political coup to China over the United States. Up for auction are 41 blocks of spectrum bandwidths which are expected to fuel 5G – Fifth Generation – systems.
Different levels of electromagnetic bandwidth are able to overlap with each other. Even as the visible light spectrum passes through the air, so do radio waves and ultraviolet waves. In this case, the bandwidths involved are mostly UHF, Ultra-High Frequency; those are the signals which used to carry some forms of local television. They have the capacity for high data transfer but a comparatively limited transmission distance.
The high data transfer is the key. 5G networking is expected to be able to fuel huge quantities of information in short spans of time, enabling operations like self-driving cars and fully-automated responsive factories.
Germany expects to raise billions of Euros in the auction, and the companies who purchase the bandwith rights are expected to make billions in profits.
Where politics enters into this is the Chinese company Huawei. The company has deep ties to the Chinese government and has been demonstrated to violate international trade sanctions. It is also a regular partner for two of the four companies which have been allowed to bid on the bandwidth rights, Telefonica Deutschland and Deutsche Telekom. A third company, Vodafone, had been in the process of expanding its coordination with Huawei until the US raised security concerns. The only company to have no large ties to Huawei is the newest company bidding, 1&1 Drillisch. They work primarily with two suppliers, Nokia and the Chinese company ZTE. ZTE also has deep governmental ties.
Citing concerns about possible espionage, the United States has asked allies not to allow Chinese vendors for their 5G systems. Secretary of State Mike Pompeo has recently provided, via a Fox News interview, an implicit threat to stop sharing security information with countries who ignore the United States demand, as noted in the MIT review.
Germany has decided to ignore that United States demand, while acknowledging the value of their concerns. Huawei is currently to be allowed as a vendor. Huawei has constructed a building in Germany wherein regulators are able to examine incoming material and research their source codes to diminish the chance of successful espionage. This was done in order to clear security hurdles for the Huawei involvement in the German train system, Deutche Bahn; as DW.com notes, it may be expanded for 5G systems.
Last November, Huawei opened a new information security lab in the German city of Bonn, where reviews by German regulators of source code of new Huawei products could take place.
The German Federal Office for Information Security (BSI) is also based in Bonn, and the possibility that Germany will allow the use of Huawei technology in its 5G networks remains live, especially if Berlin is satisfied that adequate security checks can take place.DW.com
The response by Germany may be a direct rebuke to the antagonism that the Trump administration has repeatedly shown toward Germany on trade (often directly via Twitter) and foreign policy.
It may also be a recognition that the United States is no longer an ally trusted not to engage in direct high-level espionage against them, as demonstrated by the Wikileaks information dump of U.S. intelligence files facilitated by Edward Snowden. Those documents provided evidence that the NSA and related agencies directly monitored private conversations between Angela Merkel and other world leaders starting in 2008, shortly after the inauguration of President Obama, and continuing through 2015. This was covered both in their most prominent papers like Spiegel but also the EU version of “USA Today”, The Local. Germans of all levels of political involvement were informed about it. While it is absolutely true that governments, including those of allies, regularly conduct low and mid-level spying operations on each other, it is generally considered dishonest to consistently and directly monitor a key ally.
No matter what the reason, it is a clear political win for China, which has been working to counter the American attempts to isolate the influence of Huawei in the international technology marketplace.