White House looks at nationalizing entire phone network to block hackers

The White House is so worried about Chinese hackers tapping U.S. phone calls that it's considering nationalizing the entire next generation phone network.

Fifth generation or 5G cell phone networks will come online in the next few years, but under a radical plan outlined in documents leaked to Axios government officials are mulling building a nationalized network to thwart Beijing.

“We want to build a (5G) network so the Chinese can’t listen to your calls," a senior administration official told Reuters, who confirmed the Axios report.

“We have to have a secure network that doesn’t allow bad actors to get in. We also have to ensure the Chinese don’t take over the market and put every non-5G network out of business.”

The possibility is currently being discussed among low-level officials inside the administration and is still months away from reaching the president’s desk.

As well as nationalization, the White House is also considering the less radical plan of having the system built by a consortium of wireless carriers.

“The whole premise of planning a state-run cellular network defies the democratic constitution on what the U.S. was built upon,” Neil Shah, a telecoms analyst with CounterPoint Research, told VICE News. “This is very premature thinking and the reasons given are completely absurd.”

Just like every new generation of wireless connectivity, 5G promises higher speeds and capacity, and much lower latency. That means you will be able to upload and download video files much quicker and it will have space for all those Internet of Things devices to connect to the network.

“5G is a global cellular access technology standard with patents and contributions from hundreds of firms globally built to drive a massive digital transformation at society level whereas 3G and 4G were at a personal level,” Shah said. “Building a state-run 5G network to just protect from Chinese infrastructure is a very absurd reason diluting the entire promise that 5G technology brings.”

Around the globe, mobile phone networks are already building and testing their own 5G networks. While the official standards of what exactly constitutes 5G are yet to be finalized, U.S. carriers such as Verizon, AT&T, Sprint and T-Mobile have already invested billions of dollars into building their own networks.

Under the proposals, the U.S. government would build the entire network and then lease access to it to the carriers.

This would be a dramatic shift from the current system in which each company builds their own network using spectrum — the range of frequencies used to broadcast phone calls, text messages and data — leased from the U.S. government.

The documents suggest the government-built network would be cheaper and happen quicker than if it was left to private companies. The memo also says the federal government would be able to use the banner of national security to install network equipment wherever they wanted.

To build out the network, the U.S. government would rely on equipment from companies like Nokia and Ericsson.

The White House is taking an increasingly hardline position when it comes to China’s cyber espionage efforts — without providing any concrete examples of wrongdoing.

Just this month, AT&T canceled a deal with Chinese smartphone and network equipment maker Huawei to sell its smartphones, after politicians wrote to the FCC, saying they had “long been concerned about Chinese espionage in general, and Huawei’s role in that espionage in particular.”

Suspicions that Huawei is a front for the Chinese government stem from the fact its founder, Ren Zhengfei, was once a Red Army officer. The company has consistently denied these charges.

Concerns raised in a 2012 House intelligence committee report into Huawei and ZTE, another Chinese smartphone and network equipment maker, have never fully been resolved.

Since that report, Huawei has been locked out of major network infrastructure contracts with U.S. telecom operators, such as Verizon, AT&T and others.

Cover image: A man poses with a laptop showing a binary code in front of Server racks in a server center on January 12, 2018. (Thomas Trutschel/Photothek via Getty Images)