Page 24 - ARUBA TODAY

A24 TECHNOLOGY
Friday 16 March 2018
Behind the Broadcom deal block: Rising telecom tensions

By MAE ANDERSON Although its name isn't
AP Technology Writer widely known outside the
NEW YORK (AP) — Behind technology industry, San
the U.S. move to block Sin- Diego-based Qualcomm is
gapore-based Broadcom's one of the world's leading
hostile bid for U.S. chip mak- makers of the processors
er Qualcomm lies a new that power many smart-
global struggle for influ- phones and other mobile
ence over next-generation devices. Qualcomm also
communications technol- owns patents on key pieces
ogy — and fears that who- of mobile technology that
ever takes the lead could Apple and other manufac-
exploit that advantage for turers use in their products.
economic gain, theft and Compared to earlier gen-
espionage. erations of wireless technol-
In the Broadcom-Qual- ogy, "we're seeing China
comm deal, the focus is emerge and start to play
on so-called "5G" wireless a bigger role in the stan-
technology, which prom- dards developing process,"
ises data speeds that rival Erensen said. Given a wave
those of landline broad- of consolidation in the tele-
band now. Its proponents com-equipment industry,
insist that 5G, the next step fewer companies are in-
up from the "4G" networks volved "and the stakes are
that now serve most smart- bigger," he said.
phones, will become a criti- The Committee on Foreign
cal part of the infrastruc- In this Thursday, Nov. 2, 2017, file photo, Broadcom CEO Hock Tan speaks while U.S. President Investment in the United
ture powering everything Donald Trump listens, in background, during an event at the White House in Washington, to an- States, which reviews the
from self-driving cars to the nounce the company is moving its global headquarters to the United States. Associated Press national security implica-
connected home. tions of foreign investments
5G remains in the early and China's Huawei have to ensure the U.S. keeps its ligence Committee meet- in U.S. companies, cited
stages of development. been investing heavily to leadership role developing ing in Februar y, FBI Direc- concerns about Broad-
Companies including Qual- stake their claim in the un- these standards." tor Christopher Wray said com's penchant for cut-
comm, based in San Diego, derlying technology. Such President Donald Trump any company "beholden ting costs such as research
beachheads can be enor- said late Monday that a to foreign governments spending. That could
mously valuable; control takeover of Qualcomm that don't share our values" lead to Qualcomm losing
over basic technologies would imperil national se- should not be able to "gain its leadership in telecom
and their patents can yield curity, effectively ending positions of power" inside standards, the committee
huge fortunes in computer Broadcom's $117 billion U.S. telecommunications wrote in a letter earlier in
chips, software and related buyout bid. Broadcom said networks. March.
equipment. that it is studying the order "That provides the capac- Should that happen, Chi-
"These transitions come and that it doesn't believe ity to exert pressure or nese companies such as
along almost every decade it poses any national secu- control over our telecom- Huawei, which the CFIUS
or so," said Jon Erensen, re- rity threat to the U.S. munications infrastructure, has previously expressed
search director for semi- It's the second recent U.S. it provides the capacity to concerns about, could
conductors at research warning shot across the maliciously modify or steal take a larger, or even a
firm Gartner. "The govern- bow of foreign telecom information and it provides dominant, role in setting 5G
ment is being very careful makers. At a Senate Intel- the capacity to conduct technology and standards
undetected espionage," and practices. That's where
he said. national security concerns
Lawmakers in the U.S. come in.
House introduced a bill on "Over time that would
Jan. 9 that would prohibit mean U.S. government and
government purchases of U.S. technology companies
telecoms equipment from could lose a trusted U.S.
Huawei Technologies and supplier that does not pres-
smaller rival ZTE, citing their ent the same national se-
ties to the Chinese military curity counterintelligence
and backing from the rul- risk that a Chinese supplier
ing Communist Party. A few does," said Brian Fleming,
years earlier, a congressio- an attorney at Miller & Che-
nal panel recommended valier and former counsel
phone carriers avoid doing at the Justice Department's
business with Huawei or ZTE. national security division.
The stakes are even high- Blocking the deal doesn't
er in the 5G race. "Qual- eliminate Chinese influ-
comm/Broadcom is like the ence on 5G development,
Fort Sumter of this technolo- of course. But it might slow
gy battle," said GBH Insights it down, Fleming said: "They
analyst Dan Ives, referring honestly believe they are
to the battle that kicked off helping to protect national
the Civil War. security by doing this."q