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Trump team reportedly weighing 5G nationalization – cites China threats as key reason

by | 29 Jan, 2018

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Trump meets President Xi at the G20 in Germany in 2017

National security officials in Washington are reportedly considering the idea that the U.S. government should take over part of the American mobile network as a way of guarding against threats from China, calling the country the “dominant malicious actor in the Information Domain.”

The report from American news site Axios claimed the publication had got their hands on a PowerPoint deck and a memo – both produced by a senior National Security Council official, describing 2 options the government was considering. The first was that the government could build and pay for a 5G network itself, an action which would represent an unprecedented nationalization of a historically private infrastructure. The second option was that wireless providers build their own 5G networks, which would cause “less commercial disruption” to the wireless industry, but could take longer and cost more.

The memo obtained by Axios said a strong 5G network is needed to to create a secure pathway for emerging technologies like self-driving cars and to combat Chinese threats to America’s economic and cyber security. A PowerPoint slide said the play is the digital counter to China’s One Belt One Road initiative which was designed to spread its influence beyond its borders. It said that the U.S. has to build superfast 5G wireless technology quickly because China has achieved a dominant position in the manufacture and operation of network infrastructure. The memo argued the best way to do this was for the government to build a network itself. It would then rent access to carriers like AT&T, Verizon and T-Mobile.

From an investor perspective, this plan could hit profits for major wireless companies like those mentioned because it may restrict their ability to provide 5G and thus monetize the technology themselves.

The report is likely to anger those who argue for less government oversight of the internet in general, and comes at a time of growing uncertainty over the future of America’s relationship with China, both militarily and economically, in the cyber sphere in particular.

Speaking of China / U.S. tensions, a report also surfaced today which said tech giant Intel notified a small group of customers including major Chinese firms like Lenovo and Alibaba about big security flaws in its processors first, ahead of the U.S. government. The decision raises concerns as Intel potentially could have allowed information about chip vulnerabilities (named Spectre and Meltdown) to fall into the hands of the Chinese government before being publicly divulged. In an atmosphere of high anxieties about the scale of China’s intellectual property theft from United States companies, the news will likely be met with concern by officials in Washington.

Related: AMD stock slides as security issues rock the tech sector

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

 

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