Author: Ericson M. Scorsim

In January 2022, Huawei filed a request for international arbitration against the government of Sweden before the World Bank’s Arbitration Chamber – the International Centre for Settlement of Investment Disputes (ICSID) for the protection of its 5G technology investments in the Swedish market, valued at more than 520 million euros. Here is a summary to better understand the case: Sweden’s communications regulatory agency (Swedish Post and Telecom Agency) has banned the supply of 5G network technology by the company Huawei.

The decision was adopted on the occasion of the 3,400-3,720 Mhz frequency band auction. The Agency decided that Huawei equipment used in telecommunications networks’ core functions must be removed by January 1, 2025. In light of this, Huawei filed an appeal with the Swedish Administrative Court, but it was unsuccessful. It should be noted that this Swedish decision was influenced by the lawfare practices adopted by the US government against Huawei.

In 2022, Huawei took the case to the World Bank’s Arbitration Chamber –  International Centre for Settlement of Investment Disputes (ICSID). In its request for international arbitration, Huawei alleged the reasons discussed below: Huawei has contributed to Sweden’s economy for 20 years. The Swedish authorities have adopted discriminatory treatment of Huawei’s investments made in Sweden through its subsidiary Huawei Sweden. The decision to exclude Huawei from the Swedish market implies damages of an additional 520 million euros or 5.2 billion in Swedish currency.

The Swedish decision violates the international obligations arising from the investment agreement between Sweden and China (mutual protection agreement between Sweden and China). Huawei claims it has implemented all the required cybersecurity rules, achieving more than 270 global certifications. According to Huawei, Sweden’s decision to exclude Huawei from supplying 5G technology represents a drastic and unexpected change in the Swedish authorities’ position.

Swedish legislation (the Electronic Communications Act of 2003) grants the Telecommunications Agency the power to regulate telecommunications services. In 2020, this law was modified so that the telecommunications agency must consider the risks to the security of telecommunications networks in the licensing procedure. Thus, the telecommunications agency must consult security authorities and the armed forces when granting individual licenses that may pose national security risks. In this case, the telecommunications regulatory agency must consult the relevant authorities.

According to Huawei, the telecommunications regulatory agency acted contrary to legal requirements. On the other hand, the telecommunications agency is against the rule that determined the possibility of imposing different security conditions when granting individual licenses. The Agency’s final decision found that Huawei’s products pose security risks to Sweden. However, the Agency did not specify any threat by Huawei to Sweden’s national security.

With the exclusion of Huawei, Ericsson, the main competitor, now has a monopoly in the supply of 5G products and services. Despite this, Ericsson’s CEO stated that Sweden has deviated from the European Union’s guidelines regarding the security of 5G networks, which considers balancing legitimate national security concerns and free competition. And yet, the aforementioned Ericcson CEO stated his criticism of the European 5G networks’ cybersecurity legislation. Huawei claims in its petition that it relied on the right to protect its investment under the international agreement between Sweden and China.

Huawei tried to settle the dispute with Sweden through negotiations, unsuccessfully. Sweden has breached the international agreement with China. National security reasons are not present in the international investment agreement between Sweden and China. In the twenty years of Huawei’s operations in Sweden, there has never been a security incident. Sweden has violated its obligations under Article 2 (1) of the international agreement that guarantees fair and equitable treatment of Chinese investors in Sweden. Sweden has violated the parameter related to fair and equitable treatment because the telecommunications agency’s decision is: 1) arbitrary and discriminatory; 2) disproportionate; (3) is not transparent; (4) is contrary to the legitimate expectations of Huawei as an investor in Sweden; and (5) was made without guaranteeing Huawei’s right to the due process of law.

Under the China/Sweden agreement, no contracting state shall expropriate, nationalize, or take any other measures in respect of an investment made in its territory by an investor from another contracting state, except based on public interest, provided that there is due legal process and compensation. Thus, Sweden adopted measures that had the effect of expropriating Huawei’s investments without compensation. Therefore, one of Huawei’s requests is that the Swedish government compensate for the investment loss totaling approximately 520 million euros – 5.2 billion in Swedish currency.

Under the principle of full reparation, the loss of reputation due to the breach of the international treaty between Sweden and China must be considered. Huawei’s final requests in the arbitration proceedings are: for the Arbitration Panel to declare that Sweden has breached its obligations under the Sweden-China investment agreement; order Sweden to compensate Huawei for all damages and losses suffered as a result of Sweden’s breach of the Sweden-China investment agreement, to be quantified by Huawei in due course; order Sweden to pay all costs of arbitration, including Huawei’s legal costs and expenses; order Sweden to pay interest on the amounts mentioned above from the time of Sweden’s breach of the Sweden-China international agreement; and grant Huawei any other relief as the Panel deems appropriate.

Huawei reserves the right to raise other issues relating to the matters in dispute described in the request for arbitration or related to the parties, to amend and/or supplement the petition, and to seek interim measures before the Arbitration Panel. In short: the focus of the international arbitration request is to protect Huawei’s investment in the Swedish market for the supply of 5G telecommunications network equipment. It is an issue that affects international trade and the international investment protection regime.

As can be seen from this precedent, geopolitical and geo-economic reasons impact international trade and ultimately negate freedom of trade and freedom of investment. The lawfare practiced by the United States against the Chinese company influenced the Swedish government to adopt the ban on Huawei. Therefore, companies must consider geopolitical and geo-economic factors in their risk analysis and investment plans.

Ericson Scorsim is a lawyer and consultant in Communications Regulatory Law, with a focus on telecommunications and media infrastructures, with a Ph.D. in Law from USP (University of São Paulo), and author of the books  “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), Amazon 2020, and “Geopolítica das Comunicações” (Communications Geopolitics), Amazon 2021.

Much has been said in the media and social networks about the metaverse. There is no integrated reality yet; currently, there is only the future promise of building a digital ecosystem. It is a term spread by the company Meta, Facebook’s new name.

The company has forecast that the metaverse will advance within five (5) to ten (10) years.

Now, what exactly is the metaverse?

Experts understand that the metaverse is an ecosystem of digital infrastructure with the capacity to deliver various applications: augmented reality, virtual reality, extended reality, and hybrid reality, among others.[1]  In other words, it is an integral and advanced multidimensional digital interactivity system. 3D applications will be the basis of the metaverse. For example, the multimedia system in cars can display the travel routes with digital graphical data. Some other topics are intertwined with the metaverse: digital identities, digital objects, digital currencies, artificial intelligence, and interoperability of systems, among others.

There are expectations regarding creating a parallel reality, the reality of the physical and organic world, to create “doubles,” that is, the creation of avatars, a digital persona, something common in the games industry. Also, the metaverse will enable the advancement of the so-called Internet of Bodies (IoB) and the sensory/tactile internet. As an illustration, the experience with surgeries with robotics applications is an example of tactile internet. Some see the potential of non-local distance communication to empower “the sixth sense” in the future. It would be an expanded dimension of cognition through the assistance of computer technology, something that quantum physics can explain. Computer vision and hearing, and 3D will be vital in this mission of integral cognition. There is the possibility of building virtual cities to simulate the urban management of a city. The metaverse will disrupt various business models; however, it will also allow for the design of new business models. The metaverse has potential for industries such as financial, advertising, healthcare (e.g., telemedicine), education (e.g., online learning), entertainment, automotive, gaming, smart cities, tourism, and others. There are examples of creating and marketing “digital filters” (a kind of augmented reality) as a new market. According to data from the company Meta, there are more than 700 (seven hundred) million digital filters. The company Nissan has 5G-based projects together with the telecommunications company Verizon in the United States to use applications of the metaverse in vehicle technology. This technology enables interaction between the driver, the car, and the internal, external, and virtual environment. There are projections of avatars representing, for example, pedestrians crossing city streets.

There is also a system connecting the car to the cloud computing system. From the data in the cloud, it is possible to have full “sensing” of the environment through which the vehicle circulates (omni-sensing cloud), a kind of situational awareness. This data visualization allows for the verification of traffic congestion, accidents, and accident risk prevention. It is a kind of cognitive assistance for the driver by visualizing scenarios.[2]  There is plenty of disruptive potential for the labor market, merging in-person work with virtual work. For example, videoconferencing will be better with the metaverse. Virtual reality glasses are one of the devices used for this digital immersion experience. Spatial audio applications, usually used in games, will be common in the metaverse.[3] At the base of the metaverse are the blockchain system and NFT (non-fungible tokens).

These two technologies serve as the digital representation of assets, goods, or physical objects. This is why they contribute to the trading of digital goods. Now, the metaverse ecosystem will depend on fifth generation (5G) communications networks and sixth-generation networks. These 5G and 6G networks will be the backbone of the metaverse’s operation. Therefore, investments in advanced digital connectivity are needed to reap the metaverse’s full potential. It is clear that there are opportunities in the metaverse, but there are also risks and challenges.

The first challenge is the common definition of the metaverse and the interoperability standards between systems and protocols. In summary, the economic agents in the market will dispute the definition of the metaverse’s technical standards.[4] T

he second challenge is the construction of a regulatory environment that promotes technological innovations but, at the same time, guarantees the fundamental rights to privacy, intimacy, data protection, and security, among others.

The third challenge is monetizing the metaverse applications. There are sensitive topics such as the protection of children and adolescents in this virtual environment and vulnerable audiences. Scientific studies have pointed to the increase in mental health problems due to the immoderate use of technologies. There are still challenges in “educating” the market (economic agents) as to the perception of the impact of the metaverse. Who knows if we will have a metaverse for the political realm in the future, for improving democratic institutions, quality of public services, a better quality of political agents, and political education and culture in Brazil! Digital connectivity in 5G is the foundation of communications network infrastructure for metaverse deployment.

** All rights reserved. This article must not be reproduced or used without mentioning the source.

Ericson M. Scorsim. Lawyer and Consultant in Regulatory Communications Law. Doctor in Law from USP. Author of the book Geopolitical game between United States and China on 5G technology: impact in Brazil, Amazon.

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[1] Future Today Institute. Tech Trends Report, 2022.

[2] Invisible-to-visible visualizes real and virtual world information through augmented reality to create the ultimate connected-car experience for drivers and passengers. Nissan Motor Corporation.

[3] Murphy, David and Neff, Flaitri Neff. Spatial Sound for computer games and virtual reality.

[4] Yan, Yu and Korbert, Charlotte. Shaping the technology roadmap of virtual reality (VR) and augmented reality (AR). Challenges and standardization needs. IEEE Digital Senses, 26/5/2017.

Crédito de Imagem: Agenzia YES

The US Department of Justice is studying a new regulatory policy for Standard Essential Patents.[1] The issue has implications for fifth generation (5G) communications network technology.

This analysis is made in the context of the United States’ quest to maintain its technological leadership and ability to produce technological innovations and its competitiveness worldwide. It should be noted that there is a US law on global leadership and competitiveness, including parts to ensure the Open-Ran (Radio Access Network) system in 5G network technology, the requirement of interoperability between equipment, products, and services of 5G equipment suppliers. It should be noted that the issue of standard essential patents has come to the fore with 5G technology. Paradoxically, the United States is not a leader in 5G technology; there is no US company leading in this sector globally. In contrast, China is a global leader. Huawei is a leading 5G technology supplier and a 5G standard essential patents leader. That is why there is a trade war between the United States and China on the topic of 5G. Huawei has been hit by this trade war, as it has been excluded from the US market. The United States is failing to beat the competition in 5G technology.

In light of this, the US government decided to ban Huawei, citing national security as the reason for preventing a competitor from remaining in the US market. According to the official text from the Justice Department, the US government is committed to a competitive bidding system and intellectual property. The intention here is to verify whether the sanctions applicable to infringement cases of standard essential patents are subject to the licensing commitment procedure, which demands good-faith negotiation. Usually, the licensing of patents must be non-discriminatory, fair, and reasonable. According to the text, the good-faith negotiation system promotes technological innovation, better choices for consumers, and enhanced industrial competitiveness.

The patent protection system promotes innovation and economic growth by encouraging inventors to apply their knowledge, take risks, and invest in research and development. However, there are risks with patent owners’ strategies to gain improper benefits in licensing negotiations, which can cause multiple harms, including increased costs for royalty payments and delayed introduction of new products and services.

The owner can exclude other competitors from making new inventions. The voluntary consensus on standard essential patent adopted by Standards Developing Organizations plays a vital role in the economy. Interoperability standards in product design allow for products manufactured by many different firms, including small and medium-sized entities, to function together and create innovative technologies that benefit consumers. However, applying interoperability standards to technologies covered by intellectual property rights is a complex issue. Many Standards Developing Organizations adopt intellectual property rights protection policies that allow for patent licensing in connection with standardized technologies and encourage participation in the development process by both patent holders and implementers. These policies may require participants to accept to make available licenses to their technology licenses according to non-discriminatory and reasonable practices.

According to the official text, promoting interoperability across a wide range of products makes it possible to create cheaper products for consumers. Promoting efficient patent licensing contributes to reducing litigation risks and costs, enabling good-faith negotiation between intellectual property owners and licensees.

Efficient intellectual property negotiations on essential standards will improve standardization efforts, supporting competitiveness and innovation. Negotiation is encouraged through the use of alternative dispute resolution mechanisms.

In short: geopolitical and geo-economic issues may create risks for standard essential patents owners regarding 5G and their respective business models. There are sticking points between the interests of the patent owners and the companies interested in licensing the patented products. Market solutions are being promoted to address the problem of licensing and essential patents. But, as noted, the US government has adopted regulatory practices to encourage an open-Ran and non-discriminatory negotiation system on reasonable terms. Usually, the patent owner has made billion-dollar investments in research and development to produce technological innovations. Logically, they are interested in the greater protection of their intellectual property rights.

On the other hand, other companies are interested in accessing the technology by licensing that patent. Therefore, the best strategic option is self-regulation by the market. However, governments should exceptionally intervene to ensure that conflicting economic interests are weighed in licensing standard essential patents in 5G network technology.

All rights reserved. This article must not be reproduced or used without mentioning the source.

Ericson M. Scorsim. Lawyer and Consultant in Regulatory Communications Law. Ph.D. in Law from the University of São Paulo (USP). Author of the book Geopolitical game between United States and China on 5G technology: impact in Brazil Author of the book Geopolitics of Communications, Amazon.

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[1] United States. Patent and Trademark Office (USPTO). Draft policy statement of licensing negotiations and remedies for standards-essential patents subject to voluntary F/Rand Commitments, December 6, 2021.

Crédito de Imagem: FIA – Fundação Instituto de Administração

China approved a law designed to limit foreign sanctions, called the Anti-Foreign Sanctions Law. It is their response to the trade war begun by the United States. China has been the target of restrictions in foreign trade, especially through measures taken by other countries in relation to Chinese exports and imports. The U.S. government has a list of restrictions on Chinese companies in a variety of industries; there is control over technology exports, especially regarding access to microchips, which are vital components in a variety of industries: automobiles, telecommunications, computers, and others.

The goal of the U.S. chip export control policy is to maintain the current status quo of Chinese dependency on these basic inputs. Without chip export control, China would gain substantial market share in several markets, increasing its advantage in international competitiveness.[1] Under Chinese law, if any country violates international law and the basic principles of international law, restrains or suppresses Chinese interests, justifying their actions by a variety of pretexts and their own laws, and adopts discriminatory and restrictive measures against Chinese citizens or organizations or interferes in Chinese internal matters, the Chinese government will have the right to take the corresponding countermeasures. The targets of China’s countermeasures can be people or organizations. Among these measures are: the refusal to grant and/or invalidation of visas in passports, banning entry into China and deportation; sale, seizure or freeze of personal property, real estate and/or other types of property in China, prohibitions or restrictions on organizations or people inside Chinese territory in regard to certain transactions, cooperation, and/or other activities, and other additional measures.

These rules seek to restrict the unjustified application of legislation in an extraterritorial manner (blocking rules). The Chinese Ministry of Trade is authorized by the law to impose orders to not comply with foreign extraterritorial sanctions. Furthermore, the Ministry of Trade will prepare the export control list (Unreliable List).  Based on this Chinese legislation, there are evidently geopolitical and geoeconomic risks for countries that export to China. If a country unilaterally levies any sanction that causes harm to China’s interests, it may face retaliation against its exports. As can be seen, this law is a form of self-defense by China against unilateral sanctions imposed by other governments. It is China flexing its geopolitical and geoeconomic power against hostile actions by other countries.

Therefore, it is important for global companies with activities on different continents to analyze the geopolitical and geoeconomic risk presented by this new Chinese law, including evaluation of the risks brought by new public policies in countries that are hostile to China. As a result, there are practical situations that merit attention. Initially, the Brazilian government gave indications that it was aligned with the position of the United States. The U.S. government even put pressure on the Brazilian government to exclude the Chinese company Huawei’s 5G technology. The 5G bid notice for the commercial network of mobile communications does not seem to contain any restrictions against participation by this Chinese company. However, there is a mention of a possible restriction against participation by the Chinese government in supplying technology for the Brazilian federal government’s own communication network.

Now, it is important that the Brazilian government and companies evaluate the geopolitical and geoeconomic risks in their relations with China, especially in light of the new Chinese Anti-Foreign Sanctions Law. Brazil is one of China’s main commercial partners, with exports of soy, ore, petroleum, and other commodities. Therefore, if there is any type of hostile act against China, there is a risk that sanctions will be levied by the Chinese government, with retaliation against Brazilian exports. Geopolitical and geoeconomic risk analysis needs to be done in order to correctly assess the intentions, interests, actions, and threats by governments, as well as to determine their extent. After all, any and all models of global business are subject to geopolitical and geoeconomic influence, even more so within the context of the dispute for technological leadership between the United States and China.

 *All rights reserved, may not be copied or used without citation of the source.

Ericson Scorsim. Attorney and Consultor in Regulatory Communications Law. PhD in Law from USP. Author of the Book: Jogo Geopolítico das Comunicações 5G: Estados Unidos, China e o Impacto no Brasil, Amazon, 2020

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[1] See: Khan, Saif and Flynn, Carrick. Maintaining China’s dependence on democracies for advanced computer chips. Global China. Assessing China’s Growing Role in the World. Edited by Tarun Chhabra, Rush Doshi, Ryan Hass, Emillei Kimball, Washington, Brooking Institution Press, 2021, p. 193-208.

Brazil is part of the BRICS group: Brazil, Russia, India, China, and South Africa. There are opportunities in this geostrategic partnership.

At the 2021 meeting, some interesting points were set.[1] In the field of the digital economy, there are recommendations for strengthening the digital infrastructure to favor cooperation and the promotion of new technologies that facilitate access to digital products and services.

Another recommendation is to digitalize the health sector through exchange programs in digital medical technologies among BRICS countries. In addition, it is recommended to strengthen the adoption of the smart factory with the exchange of best practices. Moreover, best practice exchange programs are encouraged, with sharing of experiences and collaboration on digital skills.

There are incentives to promote the development of digital trade platforms, with integration for small and medium-sized enterprises’ participation in exploring new markets. There are guidelines for the promotion of infrastructure financing and the exchange of best practices between countries. There are incentives for monetization of assets for investment in infrastructure construction and product and technology exchange among BRICS member countries to favor exports. There is the goal of improving logistics and transport and, respectively, connectivity with a focus on developing digital frameworks and interface for international logistics.

There is the intention of cooperation in the management of cities and urban infrastructure in the post-covid scenario. Another goal is developing green infrastructure and promoting sustainability best practices to attract investments in sustainable infrastructure. The creation of common platforms and a BRICS network is encouraged to facilitate the exchange of best practices and experiences in precision technology for sustainable agriculture and intelligent management of climate change. Another goal is to facilitate the exchange of information regarding digital platforms for farms and precision agriculture.

There is also the objective to explore regional corridors for Agritech innovations. The creation of an agroforestry forum is also sought. The objective is to create favorable conditions for the expansion of agricultural trade among the BRICS countries. There are considerations on strengthening supply chain resilience. Another goal is the promotion of the digital economy and tools to support trade between countries. There are programs for strengthening micro, small, and medium enterprises to strengthen development. Another topic is the establishment of mutual recognition agreements in authorized economic operator programs.

In the context of the digital economy, the sharing of experiences, best practices, and collaboration is sought for artificial intelligence in governance efficiency. There is the goal of strengthening digital infrastructure and cooperation for the promotion of new technologies and access to digital products and services, especially in 4G, 5G, artificial intelligence, robotics, internet of things, 3D printing, augmented reality, nanotechnology, biotechnology, quantum computing, among others. There is an intention to promote digitalization in the health and medical sector and exchange programs to develop digital technologies applied to health (local and global) among the BRICS countries. There is a demand for best practices exchanges in the smart factory segment, with systems connected by sensors. There are programs for the exchange of digital skills, with training in infrastructure and connectivity.

Another objective is to promote the development of local digital trade platforms and facilitate the integration of micro, small, and medium enterprises to explore new markets. Another theme in financial services is cooperation in financial technology (FINTECH) among BRICS countries. The sharing of experiences with digital technology is desired for the adoption of security and compliance parameters. Another aspect is the promotion of intellectual property financing through harmonization and adoption of evaluation methodology. As for medical equipment, there are incentives to create an environment for strengthening trade between the BRICS countries. There are several opportunities for Brazil. First, the expansion of its digital infrastructure in telecommunications networks and, respectively, the expansion of connectivity on a large scale, with the contribution of BRICS technology providers. Second, the expansion of Brazilian foreign trade through global digital platforms. Third, cooperation on cybersecurity issues, taking advantage of Russia’s and China’s experience. Fourth, the exchange of best practices on precision farming issues. Fifth, the robotization of factories, especially with Chinese technology. Sixth, the renewal of medical-hospital equipment through the import of technologies from BRICS countries. Seventh, the strengthening of the defense capacity of submarine cable networks, taking advantage of Russia’s and China’s expertise. Eight, there is the export of subsea oil and natural gas exploration technology from Brazil to BRICS countries.

Finally, there are opportunities in the scope of remote sensing services, a specialized niche strategic for agriculture, maritime transport, and air navigation, among other segments.

*All rights reserved. This article must not be reproduced or used without mentioning the source.

Ericson Scorsim. Lawyer and Consultant in Regulatory Communications Law. 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).

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[1] BRICS. Business Council. Brics Business Council Annual Report. Intra-BRICS Cooperation for continuity consolidation and consensus. India, 2021.

The European Union has released its strategic action plan for the digital decade. The goal is to strengthen its digital capacity and freedom to act, considering the scenario of hyper-connectivity and technological transformations.[1]

This digital plan is in the context of the European Union’s strategic autonomy for 2040.[2] It considers the trend towards the redistribution of global power, given the geopolitical and economic disputes between the United States and China. Faced with this perspective, the European Union seeks to assert its geostrategic position in light of the risks of this dispute for global leadership. In this way, the European Union seeks geostrategic alliances to counteract the United States and China. The digital action plan includes economic measures, technological commitments, social equity standards, educational commitments, environmental commitments, and regulatory frameworks.

Competitiveness is multidimensional and deepens interdependencies in the global multipolar order. Hence the need for appropriate measures to meet the new demands in the field of digital connectivity. There is a warning about the risks of large-scale disinformation by online tools and platforms and the risks of hybrid threats. Capacity building is sought in data management, artificial intelligence and technologies, and edge computing. It points out the exponential demand for semiconductors to prepare the next technology generations.

Given this context, the European Union wants to take the first step regarding its global positioning in setting technological standards for artificial intelligence, blockchain, quantum computing, cybersecurity, and sensitive data, among others. It also wants to build resilience for the financial systems. Access to space is sought to mitigate risks of conflict, internal instability, and disruption of critical infrastructure. The plan also includes more assertive actions to contain coercive actions or extraterritorial sanctions imposed by countries outside the EU. In the connectivity agenda, strategic partnerships are wanted. The United States, through the BUILD Act and Blue Dot Network, intends to undertake partnerships with Japan and Australia in quality infrastructure in the context of the G7.

China and the United States have different approaches regarding partnerships for connectivity. Both are ahead of the European Union when it comes to influencing internet infrastructure. China’s 2035 strategic plan to set international standards in emerging technologies and areas such as industry and agriculture stands out. There are opportunities for the EU to partner with Japan and India on digital connectivity. In the program for the digital decade, the EU Commission points to the following critical areas:  European common data and services infrastructure, strengthening the EU with the next generation of reliable low-power processors, development of pan-European 5G corridors, acquisition of supercomputers and quantum computers connected with EuroHPC, development of ultra-secure quantum communications and space infrastructures, development of a security network of operations centers, connected public administration, European blockchain infrastructure, and services, European digital innovation hubs, high-tech partnerships for digital skills through the pact for digital skills, among others. The digital decade program also contains digital targets to be achieved by 2030:

 
– Sustainable digital infrastructure so that all European households will be covered by a Gigabit network, with all populated areas covered by 5G;
– The production of cutting-edge and sustainable semiconductors in
Europe, including processors, is at least 20% of world production in value;
– By 2025, Europe will have its first computer with quantum acceleration;
– 75% of European enterprises have taken up cloud computing services, big data, and artificial intelligence;

– More than 90% of European SMEs reach at least a basic level
of digital intensity;

 – Europe will grow the pipeline of its innovative scale-ups and
improve their access to finance, leading to doubling the number
of unicorns;

-100% online provision of key public services available for
European citizens and businesses

-100% of European citizens have access to medical records (e-records)
-80% of citizens will use a digital ID solution;
– 80% of citizens aged 16-79 have at least basic digital skills
– 20 million employed ICT specialists, with convergence between
women and men;

There are governance rules for monitoring and reporting on the progress of the digital targets. Member states are to submit strategic roadmaps on the implementation of the targets. Multi-country projects will be encouraged as a form of cooperation between the EU and member states to contribute to society and the economy’s digital and sustainable transformation. There will also be a European digital infrastructure consortium.

For Brazil, there are opportunities in strengthening geostrategic partnerships with the European Union on issues of digital connectivity, 5G, 6G, IoT, including issues of international standardization of new technologies and cybersecurity. To this end, Brazil must prepare itself with knowledge and good practices in technological issues, with human capital training specialized in the respective themes.

All rights reserved. This article must not be reproduced or used without mentioning the source.

Ericson Scorsim. Lawyer and Consultant in Regulatory Communications Law. Ph.D. in Law from the University of São Paulo (USP). Author of the book “Jogo Geopolítico das Comunicações 5G: Estados Unidos, China e o Impacto no Brasil.” (Geopolitical game between United States and China on 5G technology: impact in Brazil).

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[1] European Comission, Brussels, 8.9.2021, Communication from the Comission to the European Parliament and the Council, 2021 Strategic Foresight Report. The EU’s capacity and freedom to act.

[2] European Comission, JRC Science for policy report. Shaping & securing the EU’S open strategic autonomy by 2040 and beyond.

The U.S. Senate is considering a bill referred to as the Cyber Diplomacy Act of 2021. This bill consists of a set of measures for diplomacy in the cyberspace.

The bill is part of the United States’ international strategy to promote open, interoperable, secure, and reliable Internet infrastructure.  It is also intended to guarantee cyber policy to promote human rights, democracy, rule of law, including freedom of expression, innovation, and a multilateral Internet governance model.

As for cyber policy, measures must be adopted for deterrence of cyber threats, fostering incentives for open, interoperable, reliable and secure information and communications technology infrastructure, engaging the private sector, academia and other internationally relevant public and private entities in cyber-related issues. Other objectives are: to adopt national measures and programs that enable cyber threat detection, prevention, and response to malicious activity; to promote capacity building by other countries on cyber policy priorities; to promote an international regulatory environment for technology and internet investments that benefit U.S. economic interests and national security; to promote cross-border data flow and fight international initiatives that impose unreasonable requirements on U.S. business; to promote international policies that protect the integrity of the United States and international telecommunications infrastructure before others based abroad; to lead executive agency engagement with foreign governments on economic issues relevant to cyberspace and the digital economy; to promote international policies to secure radio frequency bands for U.S. business and national security needs; to promote initiatives to strengthen civil and private sector resilience to face threats in cyberspace; to build capacity among U.S. diplomats to engage on cyber issues; to encourage the development and adoption by other countries of recognized international standards, policies, and best practices, among others.

Within one hundred and eighty (180) days after the passage of this bill, the Secretary of State must report on the international agreement between the United States and Brazil announced in May 2018. The State Department must present an action plan to guide the diplomatic service to act in the bilateral and multilateral arena with the purpose of developing standards addressing responsible conduct by countries in cyberspace, as well as to share best practices and proposals to strengthen civil and private sector resilience to threats and access to opportunities in cyberspace, review the status of existing efforts in multilateral forums to obtain commitments to the system of  international standards in cyberspace.  The State Department will review the policy related to instruments available to the President to deter and de-escalate tensions with foreign countries, state-funded agents, private agents, related to threats in cyberspace, assessing the tools used, and whether such tools have been effective deterrents. 

The human rights report must also be issued, as per the Foreign Assistance Act of 1961.   The Comptroller General of the United States must, no later than one year from the publication of this Act, report on the extent of United States diplomatic efforts and procedures with other countries, including multilateral forums, bilateral engagements, negotiated agreements on cyberspace-related issues, advice to the Department of State on its organizational structure, and approach to diplomatic efforts to advance the full scope of United States interests in cyberspace, including an analysis of current diplomatic missions, structures, funding, activities, and more. This U.S. cyber diplomacy bill is set in the context of the geopolitical dispute with China for global leadership. The act is clearly intended to promote the interests of the United States beyond its borders. Therefore, the Cyber Diplomacy Act of 2021 implies challenges, risks and opportunities to Brazil, including designing its domestic and foreign policy considering exponential demands for cyber diplomacy. In fact, Itamaraty – the Brazilian Foreign Ministry – and, respectively, Brazilian diplomats will need to be trained to face these new challenges related to cyberspace, which include economic, commercial, cultural, and cyber defense challenges.

*All rights reserved. Content must not be reproduced or used without citing the source.

Ericson Scorsim. Lawyer and Consultant in Communications Regulatory Law. PhD in Law from the University of São Paulo (USP). Author of the book The Geopolitical Game between the United States and China and the Impact on Brazil, 2021.

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.

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[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.

By Ericson Scorsim*

The fifth generation (5G) telecommunications network technology presents challenges, risks, and opportunities for Brazil. Among the challenges and risks is cyber sovereignty over telecommunications networks and protecting the confidentiality of communications.

The cyber environment, integrated by telecommunications networks and information and communications technologies, targets influence operations wars, disinformation, and cyber-attacks. Another coveted intelligence asset is radio frequencies, essential for military operations and use in reconnaissance, monitoring, surveillance, and targeting, and valuable in electronic warfare.

Against this backdrop, the United States and China are vying for the lead over 5G technology. There are accusations by the US government of spying carried out by the government of China through the company Huawei. The concern is covert (backdoor) telecommunications network equipment capable of performing espionage for the Chinese government.

The US’s position towards vetoing the presence of a 5G technology supply is understandable. But the position taken by the United States is radical, denying free trade between the countries by prohibiting access to its market to one of the competitors, in this case, Huawei. So trade protectionism lies behind this national security issue, as there is no global leader in 5G technology from the United States.

The scenario of this geostrategic competition is in the book “Geopolitical Game between the United States and China in 5G Technology: Impact on Brazil”, which I authored, published in 2021.

Fixed and mobile telecommunications networks are critical national infrastructures of a country: they are targets for political and economic espionage and cyber-attacks. They are prime targets for espionage because they provide interception of communications. These are critical points for collecting sensitive information about people, subjects, and governments. These services operate at various layers: hardware, microchips, software, applications, fiber-optic network infrastructures, undersea cable networks, satellites, cloud computing, etc. The goal is to gain strategic, political, and economic advantages for the spying country over the target country.

Telecommunication networks, the Internet, 5G technology, satellites, undersea cables, and information and communications technologies are considered dual-use technologies, i.e., civilian and military functions. Thus, there is greater regulation by the US government, including control of exports and technology transfer to other countries.

Knowing this scenario, an interesting geostrategic alternative for Brazil is negotiating a non-espionage agreement with the United States. If there is interest from US companies in providing open architecture and interoperable (Open-Ran) technology in 5G telecommunications networks, the country must be protected from foreign intelligence services.

Several countries spy on Brazil, and, paradoxically, it is not technically able to spy on other countries. Therefore, Brazil must build its technical capacity regarding self-defense measures. In addition to this, this same type of non-espionage agreement can be negotiated with China, as Huawei is a major 5G technology supplier.

The advance of 5G technology shows us how critical it is that the leading global countries move forward on regulating cyber warfare and more stringent control of intelligence services’ actions. Transparency measures need to be taken to democratize intelligence gathering activities of governments, companies, and citizens and respect for the rights to confidentiality of communications and privacy.

*Ericson Scorsim is a Lawyer and Consultant in Communication Law, focusing on Technologies, 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.