Barr Urges US Consider Financially Backing Huawei Rivals; Verizon Faces Patent Suit

Attorney General William Barr said the U.S. government and its allies should be “actively considering” proposals to bolster Ericsson and Nokia “through American ownership of a controlling stake, either directly or through a consortium of private American and allied companies” to make them more effective competitors against Chinese telecom equipment maker Huawei. Barr’s remarks at a Center for Strategic & International Studies conference came hours after Huawei sued Verizon in two U.S. district courts in Texas for allegedly violating the Chinese company’s patents on networking technology. Verizon abused patents via a range of services, including on Fios and network infrastructure components that “facilitate communication through Verizon’s networks,” Huawei said in its complaint. Verizon “profited greatly” from its abuses of the patents, which netted it $29.8 billion, Huawei claims. The lawsuit “nothing more than a PR stunt,” Verizon said. “This lawsuit is a sneak attack on our company and the entire tech ecosystem. Huawei’s real target is not Verizon; it is any country or company that defies it. The action lacks merit, and we look forward to vigorously defending ourselves.” Barr said U.S. backing of Ericsson and Nokia is preferable to the “pie in the sky” proposals supported by others in President Donald Trump’s administration to work with U.S. tech companies to develop open radio access networks software for 5G networks aimed at stemming concerns about the security of Huawei equipment (see 2002040056). The open RAN “approach is completely untested, and would take many years to get off the ground, and would not be ready for prime time for a decade, if ever,” Barr said. “What we need today is a product that can win contracts right now -- a proven infrastructure that network operators will make a long-term commitment to today. In other words, we need a product that can blunt and turnaround Huawei’s momentum currently.” Ericsson and Nokia are the “only two companies that can compete with Huawei right now,” Barr said. “They have quality, reliable products that can guarantee performance. They have proven successful in managing customers’ migration from 4G to 5G. The main concern about these suppliers is that they have neither Huawei’s scale nor the backing of a powerful country with a large market, like China.” Putting the U.S.’ “large market and financial muscle behind one or both of these firms would make it a more formidable competitor and eliminate concerns over its staying power,” he said. Barr urged the FCC to “move decisively” toward an auction of spectrum on the 3.7-4.2 GHz C band and “bring resolution” on the L band (see 2002060057). Commissioner Jessica Rosenworcel criticized Barr, tweeting that it’s “becoming clear as day” the Trump administration “does not have a coordinated plan for our 5G future. We need one.”