It’s Up to the U.S. Government to Stop China from Monopolizing Our Smartphone Market
Peter Roff
April 30, 2020
How the U.S. telecommunications industry helped America manage and get through the COVID-19 pandemic can be a lesson for other industries and for the U.S. government, which has been hamstrung by a failure of imagination common to those working in bureaucratic institutions. Consider where we’d be if the phone, cable, and satellite companies had been unable to keep us connected.
The migration was rapid and thorough once the closures began. Collegiate and local classrooms moved online. Grocery items started coming into our homes from web sites rather than the mall. Telehealth exploded as doctors began to see patients over webcams instead of in the office. Examples of America’s resilience and resourcefulness were everywhere. The Internet allowed families to visit, for all of us to stay up to date on the latest advisories, and for each of us to remain plugged into civilization while unable to participate in it.
Mobile devices are just as important as the networks that connect them. Our smartphones have become our eyes and ears to the outside world. Their signals go where we now cannot, only because the Internet is an American product, governed largely by American ideals. If it were not, if the Chinese were in charge, for example, the official response to the pandemic would have probably included enforceable restrictions on Internet access or a complete shutdown of the ‘Net to stop the spread of information.
Whether it remains free and open depends on many factors. The People’s Republic of China has an unfair advantage in the global race to 5G. It has developed, through its Huawei subsidiary, technologies it’s trying to force the rest of the world to adopt. If they succeed, as I’ve written before, it would be a clear and present danger to the future of global commerce and the free flow of information.
In recognition of this, the Trump Administration has been right to acknowledge that a threat exists and to take steps to keep China and Huawei from winning. The Commerce Department is finalizing regulations aimed at limiting American firms’ sale of chips to Huawei. The Justice Department has charged them with conspiracy. That’s only a start. A government-wide effort is needed to blunt the impact of Huawei’s efforts to make it the global provider of choice for the world’s 5G needs.
As part of that, American consumers must continue to be allowed to buy smartphones and tablets made by companies other than Huawei. An obscure Irish company called Neodron, which recently filed patent complaints with the U.S. International Trade Commission, could make that difficult.
Neodron, which is backed by some of the same people who brought us the mortgage securities financial crisis, has filed two complaints with the ITC alleging that virtually every non-Chinese smartphone and tablet maker – Apple, Amazon, Motorola, LG, and Samsung, to name but a few – is infringing on patents related to touchscreens.
If the commission agrees finds that to be so the only remedy it can impose would be an exclusion order that would effectively block the importation of any device found to be infringing on the patents at issue. That would include greater than 90 percent of all smartphones and over 90 percent of all tablets currently available in the U.S. market. The only device manufacturers left would pretty much be Chinese companies which could, therefore, control American markets. As we’ve seen over the past several months as the COVID-19 virus has spread, the Chinese cannot be trusted.
The ITC needs to dismiss the Neodron complaint post haste. It’s bad enough the company could lodge a complaint that might paralyze a critical sector of our economy. The U.S. government has no business giving away the kind of strategic advantage we could never get back to a potential enemy. The Chinese operate by their own rules when it suits them – even when it makes them poor global citizens. They’re out to dominate every aspect of the world economy. We’d be foolish to let that happen – and it would if the ITC finds in Neodron’s favor.
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