Tech and business groups hailed President Donald Trump’s decision postponing the fourth installment of tariffs as his administration tries to negotiate a comprehensive trade deal with China, though three existing rounds of tariffs stay as is. Bipartisan condemnation greeted Trump’s surprise announcement he will let U.S. companies resume shipments to Huawei, though the tech-equipment giant remains subject to Commerce Department export administration regulations and entity list restrictions (see 1905160081).
Senate Passes FY 2020 NDAA Sans Anti-Huawei Language; Includes 5G Security, Spectrum, EAS Provisions
The Senate voted 86-8 Thursday to pass the FY 2020 National Defense Authorization Act (S-1790) with a manager's amendment that included some 5G, spectrum and emergency alerts-related proposal. Senate leaders didn't include any proposed language in the manager's amendment targeting Chinese telecom equipment manufacturer Huawei (see 1906190054). There had been separate proposals by three senators -- Ted Cruz, R-Texas; Mitt Romney, R-Utah; and Marco Rubio, R-Fla. -- amid the debate over the Commerce Department Bureau of Industry and Security notice adding Huawei and its affiliates to a list of entities subject to export administration regulations (see 1905160081). Romney was among those concerned President Donald Trump would seek to end BIS' restrictions against Huawei as part of the administration's ongoing trade talks with China (see 1905240038). The S-1790 language outlined in the manager's amendment would call for DOD to work with the FCC and NTIA to establish a spectrum sharing R&D program aimed at sharing between 5G technologies, federal and non-federal incumbent systems. The language says DOD, the FCC and NTIA officials should, by May 2020, propose an “integrated spectrum automation enterprise strategy” that will allow Defense to “address management of [spectrum], including Federal and non-Federal spectrum” shared by DOD “that could be used for national security missions in the future, including on a shared basis.” There's also language saying the secretary of defense should begin by March 15, 2020, to brief Hill committees with jurisdiction over DOD on how the department is using 5G technology and is working with other federal agencies to “develop common policies and approaches.” The manager's amendment includes a proposal from Senate Intelligence Committee Chairman Richard Burr, R-N.C., and Vice Chairman Mark Warner, D-Va., to would require the director of national intelligence to report on the extent to which “global and regional adoption” of foreign-made 5G technology affects U.S. national security. The study should in part look at how the nation's “strategy to reduce foreign influence and political pressure in international standard-setting bodies” could help mitigate the threat. Senate Communications Subcommittee ranking member Brian Schatz, D-Hawaii, secured the addition of language from his Authenticating Local Emergencies and Real Threats (Alert) Act, which he first filed in response to the January 2018 false missile emergency alert in Hawaii (see 1801160054). The Alert Act would give the federal government sole authority to issue missile threat alerts and pre-empt state and local governments' role (see 1802070052). The Senate cleared the Alert Act last year by unanimous consent (see 1806270001).
An internal “review” at Micron Technology found the memory-chip supplier could “lawfully resume shipping a subset of current products” to Huawei because they aren't subject to Commerce Department export administration regulations and entity list restrictions, said CEO Sanjay Mehrotra on a fiscal Q3 earnings call. Micron reinstated those shipments about two weeks ago, he said Tuesday.
Senators are aiming to attach amendments this week to the FY 2020 National Defense Authorization Act targeting Chinese telecom equipment manufacturer Huawei, 5G security and changes to the emergency alerts apparatus, among other telecom policy issues, as the chamber begins floor consideration of the measure. The Senate voted 88-11 Wednesday to invoke cloture on the motion to proceed to S-1790, a precursor to consideration of amendments.
Senate Intelligence Committee Vice Chairman Mark Warner, D-Va., and Sen. Marco Rubio, R-Fla., urged President Donald Trump's administration Thursday not to use U.S. restrictions on Huawei as a “bargaining chip in trade negotiations” with China. Trump's May executive order bars some foreign companies' technology from U.S. networks and the Commerce Department's Bureau of Industry and Security filed a notice adding Huawei and affiliates to a list of entities subject to export administration regulations (see 1905160081). BIS issued a general license temporarily allowing certain transactions by Huawei and the affected affiliates through Aug. 19 (see 1905210013). Trump later said sanctions against Huawei could be part of trade negotiations with China (see 1905240038). OMB acting Director Russel Vought later requested a two-year delay in implementing government contracting and procurement-related restrictions on Huawei included in the FY 2019 National Defense Authorization Act (see 1808130064). “Europeans have publicly expressed fears that the Administration will soften its position on Huawei,” especially given Trump's instigation of a settlement that lifted the Commerce Department ban on U.S. companies selling telecom software and equipment to Chinese firm ZTE (see 1807130048), Rubio and Warner wrote Secretary of State Mike Pompeo and U.S. Trade Representative Robert Lighthizer. “Instead, the U.S. should redouble our efforts to present our allies with compelling data on why the long-term network security and maintenance costs on Chinese telecommunications equipment offset any short-term cost savings.” Any modifications to BIS' temporary general license for Huawei “must be pursued in a risk-based way, separate from any trade negotiations, and consistent with national security considerations,” the senators said. “Conflating national security considerations with levers in trade negotiations undermines” U.S. work with Europe, India and other “international partners.” The House Armed Services Committee, meanwhile, Thursday advanced its version of the FY 2020 NDAA with language directing the defense secretary to conduct a comprehensive assessment of DOD policies on telecom and video surveillance services and equipment from foreign contractors and subcontractors, including identifying ways to mitigate threats via the debarment and suspension process. The bill would direct the defense secretary to implement a strategy for 5G technologies. It recommends giving DOD $175 million to ensure effective Joint Force operations in 5G spectrum.
Sens. Marsha Blackburn, R-Tenn., Richard Blumenthal, D-Conn., and five other senators expressed concern to the FCC and DOD Wednesday about Huawei's involvement in developing the spectrum access system (SAS) and environmental sensing capability (ESC) technologies for sharing the 3.5 GHz band. They wrote acting Defense Secretary Patrick Shanahan and FCC Chairman Ajit Pai that they're "alarmed" Huawei is a member of the Wireless Innovation Forum's Spectrum Sharing Committee. The company is under scrutiny from lawmakers concerned about how it could affect security of 5G technology given its role in deployments in other countries (see 1905230066). President Donald Trump's executive order last month bars some foreign companies' technology from U.S. networks and the Commerce Department's Bureau of Industry and Security filed a notice adding Huawei and affiliates to a list of entities subject to export administration regulations (see 1905160081). BIS issued a general license temporarily allowing certain transactions by Huawei and the affected affiliates through Aug. 19 (see 1905210013). Trump later said sanctions against Huawei could be part of trade negotiations with China (see 1905240038). The senators asked DOD and the FCC about the "long-term implications" of Huawei's WinnForum involvement "for use of SAS and ESC technology specifically and spectrum sharing generally" and whether the WinnForum work gives the company "unique knowledge" about current Navy use of the 3.5 GHz band. They want to know what the agencies are doing to "fully assess Huawei’s involvement in SAS and ESC development" and "what steps are being taken to mitigate Huawei’s further involvement" in the WinnForum work. The other senators signing the letter included: Susan Collins, R-Maine; John Cornyn, R-Texas; Tom Cotton, R-Ark.; Ed Markey, D-Mass.; and Dan Sullivan, R-Alaska. The FCC and DOD didn't comment Thursday.
The Commerce Department plans to issue an advance NPRM for export controls on foundational technologies in coming weeks, said Rich Ashooh, assistant secretary-export administration, at a Bureau of Industry and Security Regulations and Procedures Technical Advisory Committee meeting. Hillary Hess, director of Commerce’s regulatory policy division, said only “it is in the process now.” BIS recently updated the commerce control list (CCL) with five new emerging technologies (see 1905230018). Hess and others previously said BIS was behind in publishing controls on emerging and foundational technologies due to the partial federal government shutdown and the large volume of comments. Tuesday, Ashooh said BIS plans to stagger notices about emerging and foundational technologies, and Hess said it plans to release the ANPRM before any more emerging technologies are added to the CCL. Ashooh said he will try to give “a little more” time for comments on the foundational technology notice but it may not be possible. When Ashooh last asked Commerce Secretary Wilbur Ross for a public comment extension, Ross “very grudgingly” agreed, Ashooh said. “It’s a fast-moving administration,” he said, “and I’m sure that will still apply.” Ashooh said the ANPRM for foundational technologies will be a “very different thought process” from the previous notice for emerging technologies, but will offer another opportunity to communicate with BIS: “Those of you who provided comments on emerging, whatever you didn’t get to say in emerging, you can say in foundational.” Hess said BIS must wait for OMB to OK the ANPRM, which can take up to 90 days. But Hess said usually the OMB “doesn’t take that whole time.” Commerce won't provide straightforward definitions of foundational or emerging technologies in an upcoming notice, said both speakers. “Emerging technologies defies a specific definition,” Ashooh said. The technologies that fit under the emerging technologies category will be defined “on a rolling basis” as they’re proposed. Hess said BIS won’t try to place rigid definitions on any technology category but instead try to “identify the technical parameters.” Commerce looks for a common thread when identifying emerging or foundational technology exports that may be candidates for the CCL, Hess said.
The Commerce Department Bureau of Industry and Security added five new national security-related technologies to the export administration regulations’ commerce control list, said a Thursday notice in the Federal Register. The additions stem from changes made to the Wassenaar Arrangement’s list of dual-use goods and technologies agreed to during a 2018 plenary meeting, BIS said. The changes add “recently developed or developing technologies” that are “essential” to U.S. national security: “discrete microwave transistors,” “continuity of operation software,” “post-quantum cryptography,” “underwater transducers designed to operate as hydrophones” and “air-launch platforms.” The changes took effect Thursday. Shipments “on dock for loading, on lighter, laden aboard an exporting carrier, or en route aboard a carrier” to a foreign destination on or before Thursday may proceed to the destination.
Senate Commerce Committee Chairman Roger Wicker, R-Miss., Senate Intelligence Committee Vice Chairman Mark Warner, D-Va., and Sen. Tom Cotton, R-Ark., led Wednesday night filing of the U.S. 5G Leadership Act (S-1625) in a bid to bar from U.S. networks equipment from Huawei and other Chinese telecom equipment manufacturers deemed a national security threat. Congress has repeatedly raised concerns about ZTE and other Chinese firms in the context of U.S. competition against China for leadership on 5G, including during a Senate Judiciary Committee hearing last week (see 1905140079). S-1625's filing also follows President Donald Trump's executive order to bar some foreign companies' technology from U.S. networks and a subsequent Department of Commerce Bureau of Industry and Security notice adding Huawei and some of its affiliates to a list of entities subject to export administration regulations that have a presumption of denial (see 1905150066 and 1905160081). BIS soon after issued a general license temporarily allowing certain transactions by Huawei and the affected affiliates through Aug. 19 (see 1905210013). S-1625 would make it U.S. policy that U.S. telecom networks “should not incorporate any hardware or software produced by, or any services offered by” Huawei, ZTE or other entities that are “subject to extrajudicial direction from a foreign government.” The bill would require the FCC complete its work on an NPRM to counter the threat from companies deemed a security threat to U.S. telecom networks or the communications supply chain (see 1812210032). It would create a grant program to make up to $700 million available annually to help U.S. communications providers remove from their networks Chinese equipment determined to threaten national security. “5G networks need to be robust and secure, and not rely on equipment or services that pose a national security risk,” Wicker said. “While we’ve made enormous progress in educating the private sector of the dangers [Huawei and other] vendors pose, we haven’t put in place policies to help resource-strapped rural carriers address and eliminate those risks,” Warner said. “We need to find insecure communications equipment, fix it, and fund it,” tweeted FCC Commissioner Geoffrey Starks. S-1625 “addresses these issues -- lets get this done.” The Competitive Carriers Association and Telecommunications Industry Association praised Wicker and the other senators for filing S-1625. Senate Commerce Security Subcommittee Chairman Dan Sullivan, R-Alaska, and Sen. Ed Markey, D-Mass., also signed on as co-sponsors.
The topic of supply chain security got hotter with Wednesday’s presidential executive order that could mean rules banning some companies from the U.S. supply chain, speakers said a U.S. Chamber of Commerce Global Supply Chain Summit Thursday (see 1905150066). China is starting to fire back.