Harbinger of Balkanisation

The rollout of Huawei’s 5G pilot in Russia appears to be the first salvo fired in the escalating conflict for cyberspace where competing technological poles will vie for domination of the digital world.

Background 

The ubiquitous internet we are logged into 24 x 7 has become as much a part of our daily life as air, water and sunlight. Although the existing internet infrastructure and protocols are largely controlled by the US, its almost uninhabited and open-source access has made it a universal phenomenon. But this monopoly in cyberspace may soon change as China and perhaps Russia, emerge as digital competitors to the US.

So all-pervasive is the power of the internet that governments seek to exert control and influence over its direction and manipulate the next generation to suit their requirements. 

China is at the forefront of this objective. It aims to develop its own protocols, standards, entry points, distribution and, most importantly, its own rules and regulations. Based on the current Chinese government practices on the internet, it can be safely assumed that the Chinese system is likely to involve a high degree of censorship and control. Russia is keen to partner China in this endeavour by pooling in its own sizeable resources.

Chinese technological giant, Huawei, spearheads the Chinese campaign for internet domination and its ultimate “splitting”. Huawei Technologies, founded by Ren Zhengfei, in 1987, who was a technician for the People’s Liberation Army, is an equipment and services company headquartered in Shenzhen, Guangdong. It is the largest telecommunications equipment manufacturer in the world. In 2018, it became the world's second-largest smartphone maker, behind Samsung and sold more phones than Apple.  

In a path-breaking deal signed in June 2019 during the Chinese President Xi Jinping’s visit to Russia for the St Petersburg International Economic Forum (SPIEF), Huawei aims to create the first 5G city--Moscow--by 2020. This deal faced severe opposition from the US and its allies including sanctions and legal action. In May 2019, Huawei was put on the ‘Entity List’ indicting it on 23 counts pertaining to theft, obstruction of justice and fraud in relation to evasion of sanctions.

The US also encouraged its allies to block the company from supplying 5G communication network, accusing it of being a high-risk vendor that can undermine national security. This was consented to by Canada, Australia, New Zealand and Japan.

Europe is still weighing the surveillance issues. This development has triggered concerns about ‘Splinternet’ i.e. the emerging tech split between the US and its allies on one side and Russia, China, and Iran on the other. 

Analysis

The Russian partner in the deal is the partly state-owned telecom giant MTS. The 5G pilot scheme will develop a network covering the entire city of Moscow. The network will function on 28 GHz and 49GHz frequency bands. It will test the Smart City technology designed to improve security and urban services management as well as develop the transport system.

The licences are expected to enable China to move ahead in the global race to deploy telecoms infrastructure that will help power the industrial internet, autonomous driving and smart cities among a range of advanced mobile applications. Huawei has also decided to triple the research and development staff in Russia by 2025.

Eduart Lysenko, head of the Department of Information Technologies noted that it will also speed up the development of self-driving transport in the city and other future technologies.

Eric Schmidt, former CEO of Google and Executive Chairman of Alphabet recently acknowledged China’s growing prowess in a private event in San Francisco. When asked about the possibility of a “fractured internet” in the future, Schmidt contended: “I think the most likely scenario now is not a splintering, but rather a bifurcation into a Chinese-led internet and a non-Chinese internet led by America.” Schmidt describes China as a hotbed of internet-based economic activity, with dynamic new services and enormous, impressive companies. He warns that there may be downsides to China being such a dominating force. As per Schmidt, “There’s a real danger that along with those products and services comes a different leadership regime from government, with censorship, controls, etc.”

Analysts also cite the Chinese law which mandates companies to co-operate with the intelligence services and warn that the equipment produced by Huawei could be compromised. Russia too has passed a sovereignty bill similar to China’s Great Firewall. The bill allows Russia to cut itself off from the global internet. As part of the sanction regime, Huawei has been banned from licensed use of Google’s Android OS. Since then the Chinese telecom giant has been searching for an alternative and reduce its reliance on US technology.

Taking the current deal with Russia further, Huawei plans to incorporate the Russian OS “Aurora” in its products by 2020. Concurrently, it is also developing its own open-source mobile OS “Harmony”. Owing to the loss of license, Huawei was forced to reduce its production orders with Foxconn for shipping devices with preloaded Google apps and services. Presenting a brave front, Huawei founder Ren Zhengfei said “If the lights go out in the West, the East will still shine [...] America doesn’t represent the world. America only represents a portion of the world.

The collaboration between China and Russia is bound to give impetus to the growth of alternate technological capacities so that they can face up to US unilateralism and protectionism. 

Assessment

  • It is evident that a cyber “Cold War” is in the offing and soon governments with less developed technology will be forced into choosing sides and align themselves along the old Cold War lines. 
  • With the rollout of 5G network, Russia and China can work on the principles of the autonomous system of internet governance. Since it will allow for control over domestic internet space, the states can defend their domestic internet from external attack.
  • The two authoritarian countries are regularly blamed for the state-controlled/ orchestrated cyber attacks and cyber espionage. They are also reported to filter information flow using techniques like deep packet inspection and IP blacklisting. Therefore, they would invest heavily on a parallel internet, safe from Western control. Once proven to be practical and useable, this alternate internet will draw droves of customers and will be a revenue generator of unimaginable proportions.
  • Competition is not always bad, and the larger global community will now have an alternative to the US-controlled internet. However, there is little or no compatibility between the two rival networks, it will create challenges for businesses entirely internet-based while navigating the increasingly complicated minefield of different internet protocols and regulations.
  • Last but not the least, there will be an economic price to be paid by the US tech giants who would not only lose revenues but also be denied access to international research collaborations and supply chains.  

India Watch

India is due to hold trials for a next-generation 5G cellular network installations in the next few months but has not yet decided on inviting bids from the Chinese telecoms equipment maker. In July, the Indian ambassador in Beijing was conveyed China’s concern about US efforts to keep Huawei out of 5G infrastructure worldwide. It has been reported that China has hinted at "reverse sanctions" on Indian firms involved in business in China if India blocks Huawei because of pressure from US. Indian companies have a smaller presence in China than other major economies. But firms including TCS, Dr. Reddy's Laboratories, Infosys, and Reliance Industries are operating there in manufacturing, financial services, healthcare and outsourcing.

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Image Courtesy: flickr.com

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