5G (fifth generation) technology applicable to telecommunications networks will be the new global standard. In this context, a potential conflict arises regarding intellectual property. 5G technology providers have significantly invested billions of dollars in the research and development of their products. For this reason, they have registered several trademarks as a result of such R&D (research and development) investments.
The leading global suppliers of 5G technology are Ericsson (Sweden), Nokia (Denmark), and Huawei and ZTE from China. Paradoxically, the United States has no global 5G technology provider. On the other hand, there are telecom service providers and network infrastructure installers that need to acquire 5G technology. This technology involves equipment from the core network, peripheral network, and base station radio equipment. North American telecommunications and technology companies have started to advocate a technical standard called Open Ran, i.e., Radio Access Network. They want an open standard for access to radio frequency networks that enables competition, innovation, and diversity of vendors of this technology.
The Open Ran Policy Coalition is lobbying its interests before the Federal Communications Commission[1]. In Brazil, the Open-Ran Alliance was created and sent a letter to Anatel (the Brazilian Telecommunications Regulatory Agency), signed by Qualcomm, Cisco, IBM, Cpqd, Trópico, and PADTEC, among others. In Europe, there are also steps toward the assertion of the Open-Ran standard in 5G telecommunications networks. The specialized media reported that Telefonica and Deutsche Telecom are interested in this open standard. Japan, through the company Rakuntem, has reportedly started tests with Open-Ran. Germany has reportedly set up a fund to encourage the Open-Ran standard.
The conflict, therefore, involves four parties. First, telecommunications service providers. Second, 5G technology manufacturers. Third, there are companies interested in entering the telecommunications market. Fourth, the regulatory agencies will have to take a position on the issue. This conflict is within the context of the dispute between the United States and China for global leadership. The Final Report of the National Security Commission on Artificial Intelligence highlights the dispute over intellectual property between the United States and China, even accusing China of promoting intellectual property theft.
The one who holds the right to authorize or not the licensing of their technology to third parties owns its intellectual property. That includes collecting royalties for the assignment of such patents. If the patent holder decides to refuse to license, the case can be taken to court. Or it could be that the patent holder has designed its technology so that it is incompatible with use by other operating systems. 5G technology Open-Ran advocates argue for an open telecommunications network, which they say would provide greater interoperability, competitiveness, innovation, diversification of 5G technology manufacturers and suppliers, and network security. But the Federal Communications Commission has raised several questions about Open Ran, particularly regarding the security of telecommunications networks.[2] Also, it has questioned whether Open-Ran is secure for public communications.
The imbroglio over Open-Ran stems from the US government’s ban on the supply of 5G network equipment by Chinese companies Huawei and ZTE. At this time, the United States does not have any company with the capacity to serve its domestic market. Therefore, this is a structural problem in the supply chain of 5G telecom network equipment. Hence the desire for Open-Ran, an open standard that ensures interoperability between equipment from different 5G technology manufacturers and suppliers. In the new law called the United States Innovation and Competition Act of 2021, a part is dedicated to creating incentives for semiconductor production in the United States within the context of the Open-Ran of 5G telecommunications networks. In Brazil, Anatel has begun to debate Open-Ran telecommunications networks. Its technical department has manifested that public resources from Funtel (the national telecommunications fund) should be used to develop the open telecommunications network architecture. There are challenges, risks, and opportunities in regulating the issue. The adoption of Open-Ran represents the flexibility of intellectual property rights (patents) on 5G technology, resulting from intensive investments in research and development by telecommunications network equipment manufacturers. It should be noted here that the company Alga Telecom is interested in adopting the Open-Ran standard for 4G networks.
Adopting open architecture gives rise to challenges and risks related to cybersecurity. It remains to be seen whether regulatory agencies around the world will enforce this new Open-Ran standard for 5G technology or whether they will adopt a stance of technology neutrality, letting economic forces in the market freely settle the issue. In principle, it is really not up to the regulatory agency to set the technology standard. But the critical point here is the cybersecurity of telecommunications networks. If there is a change from closed telecom network architecture to open network architecture, is there mitigation of the risks of cyberattacks on telecom networks?
After all, when it comes to telecommunications networks, we are talking about the integrity, reliability, and security of networks and data and the confidentiality of users’ communications. Therefore, the issue is sensitive and deserves broad and profound analysis by Anatel. Anatel said it will procure academic studies to assess Open-Ran’s regulatory, economic, and political issues. The topic involves big businesses: telecommunications companies, Big Techs, and network equipment technologies suppliers. Big Techs are interested in extending digital connectivity, hence the interest in Open-Ran, which represents cost savings in the deployment of telecom networks. The trend is of digital convergence between telecommunications and information and communications technology systems. It seems that software will dominate due to the virtualization of networks and cloud computing, and edge computing adoption. Despite all this, it is critical to consider the digital ecosystem as a whole, including the verticals impacted by the technological changes in the debate: civil society and the end-users. Initially, there are three regulatory options: i) Anatel does not regulate the issue, leaving it to the free-market forces to define the question; ii) Anatel regulates the issue, especially concerning the cybersecurity of open networks; iii) the market players opt for self-regulation. In short, the path is under construction.
A final consideration about the Open-Ran context: the United States has the Communications Assistance for Law Enforcement Act (CALEA), known as Digital Telephony. This law obliges telecom companies to adopt network equipment that enables the interception of communications. Therefore, US equipment manufacturers are required to comply with the law. In addition, the US intelligence services use advanced techniques for espionage by infiltrating hardware, software, and telecommunications networks, satellites, and submarine cables. In other words, the US intelligence services collect intelligence data (SIGINT) from telecommunications networks. So there are risks that Open-Ran could be used to extend the collection of intelligence signals from mobile telecommunications networks. The United States’ fight with China’s Huawei seemingly reveals this national intelligence issue. As Huawei is a foreign company with closed technology, it presents greater obstacles to the interception of communications on telecommunications networks by the United States. The main accusation by the United States against Huawei is that the company spies for China’s government services. And doesn’t the United States do the same thing, through its companies and its intelligence services? Recently, the international media reported a spying scandal against the German government by the Danish intelligence services at the behest of the United States.
US private companies are required to cooperate with national intelligence services, just as what happens in China. Moral of the story: Both the United States and China can spy and perform covert actions on telecommunications networks anywhere in the world. In the face of this, where does Brazil stand? How will it protect its communications sovereignty and secure its telecommunications networks? It is up to the Brazilian Congress and Anatel to answer this question.
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Ericson Scorsim. Lawyer and Consultant in Communication Law, focusing on Technologies, Infrastructures, the Internet, Media, and Telecommunications. Ph.D. in Law from the University of São Paulo (USP). Author of the book “Jogo geopolítico das comunicações 5G – Estados Unidos, China e impacto sobre o Brasil” (The Geopolitical Game of 5G Communications – United States, China, and Impact on Brazil), published on Amazon.
[1] Open Ran Policy Coalition, Comments of the Open Ran Policy Coalition, before the Federal Communications Commission, April, 2020.
[2] Federal Communications Commission, Notice of Inquiry. In the matter of promoting the deployment of 5G open radio access network, March 18, 2021.
