Ris­ing tele­com ten­sions be­hind Broad­com deal be­ing blocked

The Columbus Dispatch - - Market Summary - By Mae An­der­son

NEW YORK — Be­hind the U.S. move to block Sin­ga­pore-based Broad­com’s hos­tile bid for U.S. chip maker Qual­comm lies a new global strug­gle for in­flu­ence over next-gen­er­a­tion com­mu­ni­ca­tions tech­nol­ogy — and fears that who­ever takes the lead could ex­ploit that ad­van­tage for eco­nomic gain, theft and es­pi­onage.

In the Broad­com-Qual­comm deal, the fo­cus is on so-called “5G” wire­less tech­nol­ogy, which prom­ises data speeds that ri­val those of land­line broad­band now. Its pro­po­nents in­sist that 5G, the next step up from the “4G” net­works that now serve most smart­phones, will be­come a crit­i­cal part of the in­fras­truc­ture pow­er­ing every­thing from self-driv­ing cars to the con­nected home.

5G re­mains in the early stages of devel­op­ment. Com­pa­nies in­clud­ing Qual­comm, based in San Diego, and China’s Huawei have been in­vest­ing heav­ily to stake their claim in the un­der­ly­ing tech­nol­ogy. Such beach­heads can be enor­mously valu­able; con­trol over ba­sic tech­nolo­gies and their patents can yield huge for­tunes in com­puter chips, soft­ware and re­lated equip­ment.

“These tran­si­tions come along al­most ev­ery decade or so,” said Jon Erensen, re­search di­rec­tor for semi­con­duc­tors at re­search firm Gart­ner. “The govern­ment is be­ing very care­ful to en­sure the U.S. keeps its lead­er­ship role de­vel­op­ing these stan­dards.”

Pres­i­dent Don­ald Trump said late Mon­day that a takeover of Qual­comm would im­peril national se­cu­rity, ef­fec­tively end­ing Broad­com’s $117 bil­lion buy­out bid. Broad­com said that it is study­ing the or­der and that it doesn’t be­lieve it poses any national se­cu­rity threat to the U.S.

It’s the sec­ond re­cent U.S. warn­ing shot across the bow of for­eign tele­com mak­ers. At a Se­nate In­tel­li­gence Com­mit­tee meet­ing in Fe­bru­ary, FBI Di­rec­tor Christo­pher Wray said any com­pany “be­holden to for­eign gov­ern­ments that don’t share our val­ues” should not be able to “gain po­si­tions of power” in­side U.S. telecom­mu­ni­ca­tions net­works.

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