In August 2018, the government of Australia concluded its review of the national security risks of the telecom sector with the new 5G networks. The review provides new guidance to telecom carriers, implicitly restricting Chinese vendors.
It concludes that 5G changes how the networks operate and increase the potential security risks to the point today’s safeguards are insufficient. The government must therefore intervene, as foreign powers may exploit these risks by coercing vendors.
The current rise in national security restrictions in the telecom sectors are different from the typical run-of-the-mill economic protectionism as they are imposed by countries that have no domestic suppliers to protect.
Instead, the root of these measures is fundamentally about distrust between governments with conflicting geopolitical agendas, rather than just trustworthiness of the vendors. The situation is not too dissimilar to the US online services after the NSA revelations in 2013.
In effect, future security screenings will assess other governments – i.e. the ability of a foreign state to exercise control over its vendors, rather than assess the vendors themselves. Some legal frameworks, such as the US reforms of Cfius or the EU’s proposed new FDI screening framework, already point towards such directions.
Australia’s assessment of the 5G suppliers
In August 2018, a press release by Senator Mitch Fifield, Australia’s Minister for Communications and the Arts, expressed the view that telecommunications vendors “likely to be subject to extrajudicial directions from a foreign government” may fail to “adequately protect a 5G network from unauthorised access or interference”.
Although the language of the declaration does not reference any country in particular, its implicit ban of Chinese firms quickly drew criticism from China’s Ministry of Commerce, deploring the impact it would have on relations between the two countries. Indeed, although Australia’s cybersecurity assessment regime, overseen by the Australian Security Intelligence Organization (ASIO), can yield recommendations, rather than prohibitions. In practice, Australian authorities would follow any recommendations provided.
Furthermore, as the letter notes, part of Australia’s Telecommunications Sector Security Reform (TSSR) includes a stricter screening mechanism, where any change to telecommunications systems “likely to have a material adverse effect on their capacity to comply with their security obligation” must be notified, so that the relevant authorities may provide direction. This means that the clear guidance that the Australian government has provided carriers regarding “how their new legal obligations apply to 5G networks”. is in practice a ban on procurement from certain types of telecommunications vendors.
The assessment by ASIO – which likely formed the basis of Sen. Fifield’s letter – is particularly significant, because it represents a precedence for western powers with strong economic ties to China, putting their security concerns ahead of economic interests – including those of operators like Vodafone, Optus and TPG who use Chinese vendors in their networks.
There are principally important discussions that follow from Australia’s TSSR decision.
- The first issue is whether the architecture of 5G actually changes how the networks operate and increase the potential security risks, despite its many security features. This is first and foremost a technical question, but a question which has a bearing on which products the vendors may be allowed to supply.
- The second issue on the review is about its form. The TSSR decision is not a hard law that forbids certain vendors. Instead, TSSR introduces new measures that create new obliges for the Australian operators as well as for the government to intervene and issue directions in some instances.
- Third and finally, the decision highlights how some foreign powers may be able to exploit this technical change through the involvement of vendors.
The consequences of these three points are now further examined in the coming sections.
 Fifield, M. (2018), Government Provides 5G Security Guidance To Australian Carriers, Ministers for Communications and the Arts, Joint Press Release, August 23 2018, accessed at: https://www.minister.communications.gov.au/minister/mitch-fifield/news/government-provides-5g-security-guidance-australian-carriers.
 Needham, K. (2018), Australian government made ‘wrong decision’ over 5G ban, says China, Sydney Morning Herald, August 24, 2018, accessed at: https://www.smh.com.au/world/asia/china-australia-government-back-stabbers-over-huawei-decision-20180824-p4zzg0.html.
 Smyth, J. (2018), Proposed Huawei ban seen hitting Australian 5G push. Financial Times, August 13 2018, accessed at: https://www.ft.com/content/5a22be84-9b92-11e8-9702-5946bae86e6d.