Careless advocacy on 5G RAN
Subjects: Digital Economy WTO and Globalization
Author thanks Claudia Lozano for her research assistance
Those who call for non-WTO compliant support for O-RAN are either indifferent or nescient about how our trade negotiators try to uphold a liberal rule-based order.
Calls to make Open RAN compulsory
Security hawks and commercial interests are increasingly touting Open RAN as the answer on how to end China’s participation in 5G networks. Their lobbying campaign has resulted in new US legislative proposals, references in the new German IT security bill, UK G7 Presidency declarations and “Dear Ursula” letters on EU strategic autonomy. The intensive lobbying in Europe, Latin America and Indo-Pacific by young and enthusiastic members of the DC tanking community call for making Open RAN a mandatory requirement for our networks. Lobbyists suggest public subsidies to help Open RAN catch up against already existing competitive solutions.
But first, we need to clarify what Open RAN is. It is not a technology per se, but an industry concept or a collective term for some of the most interesting (and pre-existing) trends in the mobile industry, encompassing virtualisation, AI, and RAN disaggregation. It’s essentially a buzzword – and how the term defies technical or legal definitions has a bearing on how the EU regulators may undertake strategic measures to secure our 5G networks with Open RAN.
Second, the buzzword “Open RAN” is entirely different from “O-RAN”, the industry group that develops its own take on the idea. In the eyes of public law, the O-RAN Alliance is a private consortium that chooses its own membership. It is led by five founding members, who are all mobile network operators that hold a privileged standing. They decide on board members and has the last say over technical specifications that get adopted or rejected. Two of these founders are European. Another two are from jurisdictions that could impose extraterritorial obligations on private entities – namely China and the US. And by the way, one of them is a full-fledged state-owned enterprise.
O-RAN is not a “standard”
Other participating operators may become associated members of the O-RAN consortium, while tech suppliers are mere “contributors”. This closed-door and differentiated membership in the O-RAN consortium is different from the open standard-setting process in the EU under ETSI – or 3GPP, where EU and six other open regional standard-designation organisations (SDOs) commonly develop the 5G standard. ETSI and 3GPP decide their specifications under consensus, with open participation throughout each step of the standard-setting process. There are obviously strategic implications of such an open process against a closed process like the O-RAN consortium. But more importantly, there are implications for EU and trade law that restrict how we may subsidise their endeavour, or make certain specifications mandatory by law.
All WTO members have the duty to ensure that standardisations bodies follow the requirements of the TBT Agreement, including its annexes, Code of Good Practice, as well as the general principles and jurisprudence of GATT. The general and horizontal regulation for standard-setting on the EU Single Market – Regulation 1025/2012 – also mirrors the WTO commitments. The WTO Members have already raised concerns over “private standards”– like those of the O-RAN consortium – as unnecessary barriers to trade [see para. 20]
According to current EU and WTO rules, the standard-setting procedure must be open in a non-discriminatory manner; and transparent, with all work programs, proposed and final standards under consideration easily accessible to anyone. They must allow for effective participation of every stage of standard development for interested parties from all WTO members. The fact that the O-RAN specifications are published does not suffice to make them “open” or even make it an industry standard.
As conditional participation is central to the governance structure and its founding principles, the O-RAN consortium makes it incompatible with EU and WTO law. O-RAN and its specifications are neither a standard-setting organisation nor a “standard”, at least not according to EU and WTO law. Making technical specifications compulsory in the EU makes them de facto technical regulations, which may trigger more legal requirements, and we will de facto be guilty of discriminating against other competing protocols and standards.
Is that really a problem, though? Well, that depends on what the objective is.
If the purpose is to foster a diverse ecosystem and address some external market distortion
(as the 5G Toolbox suggests), no country should make O-RAN, 3GPP or any standard mandatory. We should promote the O-RAN consortium, as we treat all new market entrants. History shows diversity is best promoted by competition between different standards – not state aid, diktat, or other state capitalist methods.
Asking for industrial subsidies while attacking them
The EU and other WTO members cannot selectively support a private consortium like the O-RAN since it would be a de jure discrimination. Those who lobby for public subsidies for O-RAN are unaware of how the EU, Japan and the US are promoting new joint-principles to address Chinese industrial subsidies in the WTO. And subsidising a closed industry group would run afoul of our own disciplines. The O-RAN advocacy for taxpayers’ cash is a self-goal that would declare these reform efforts dead on arrival. What we can do, however, is to subsidise R&D for technologies – like virtualisation, disaggregation, or actual standards. We just can’t subsidise buzzwords or specific consortiums.
In the same vein, downloading O-RAN Alliance’s technical specifications is subject to contractual conditions. To even read them, the viewer must enter a licensing agreement with a duty to “irrevocable” license patents to the consortium members. Well, that’s what trade lawyers would call “forced technology transfer” if it had been imposed by a non-western government.
However, one purpose of supporting O-RAN may be to achieve bifurcation with China. That logic makes sense for many, and there is a case for future standards (beyond 5G) to be developed amongst a trusted group of countries that share some fundamental legal principles. But as Huawei and ZTE are already excluded from the US market, the O-RAN gambit is not about keeping China out: Instead, it is about the US industry entering into Europe. I’m all in favour of the US industry trying to take a chunk of the Single Market, obliterating Ericsson, Samsung or Nokia – I just don’t think we need to resort to state capitalist methods to make it happen.
West adopting past Chinese practices
In conclusion, there is a distinction between just calling something “open” and the legal definition of “open” (which WTO defines as “accessible or available without hindrance”, “not confined or limited to a few; generally accessible or available”). The great irony is how the O-RAN consortium wants to raise the exact same access barriers that China has practiced in the past: Before the global interoperability that came with 4G, China maintained a national standard (TD-SCDMA), set by its SDOs with limited participation for some foreign industry players. However, China diligently published its TD-SCDMA specifications – precisely in the manner that the O-RAN consortium plans to operate.
For seventeen years, the US Trade Representative reported on China’s closed standards and subsidies (that were conditioned on TD-SCDMA) as one of the world’s worst trade barriers. China’s practices on TD-SCDMA are mentioned in over 80 documents available on the USTR website – in their annual reports on foreign trade barriers, priority watch lists, report to the Congress on China’s WTO compliance, and its regular reviews of telecom trade agreements. And those efforts have borne fruit as the Chinese SDOs are now open to foreign participation. Those who call for non-WTO compliant support for O-RAN are either indifferent or nescient about how our trade negotiators try to uphold a liberal rule-based order.
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