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tv   Senate Judiciary Committee Hearing on 5G Technology Impact Part 1  CSPAN  May 15, 2019 1:41am-2:35am EDT

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it was a responsibility to make sure we did everything we could to protect the citizens of the state of wyoming. --is a matter [indiscernible] >> join us on the road on c-span. >> this week, our online video library marks a milestone, a quarter million hours of content. programs since 1980 seven are available on our on my into can view them all for free at >> a senate hearing on the rollout of the new 5g cell phone technology am a possible threats to national security, and the protection of intellectual property. government computer security officials testified about the risk posed by chinese tech company while way. this senate judiciary hearing runs two hours.
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this runs two hours. >> today we will talk about something i am by no means an expert on but i am very curious about and that is 5g networks, their development here at home and abroad particularly in china. what does it mean to the average american, what threats to a face from these networks being purchased by our allies from
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at in where we are developing the technology. i appreciate the witnesses, the first witness, handle one will be the director of cyber security and infrastructure security agency for the department of homeland security. director ofr is the communications policy at the state department. we will have some private sector witnesses. i look for to learning and find .ut how congress can help i will tentatively to senator feinstein. senator feinstein: thank you for holding this hearing. i actually know very little about 5g. i have tried to learn. what we see is a transition to some fifth generation wireless technology and that is 5g.
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what i am told is it is going to fundamentally change our society , our economy, and our national security. so we all need to be concerned. i am told it is expected to provide exponential increases in speed, capacity, and reliability of internet connected devices. that will include a variety of revolutionary technologies from new methods of transmitting data to new advanced cell tower infrastructure and an untold number of new smart devices. i am told 5g is expected to provide not only 20 times faster network performance but also generate 12.3 join dollars in global sales activity by 2035. i am told it will create millions of new jobs and launch entirely new industries. however, 5g also represents
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serious consequences for our national security. so i think it is critical to explore those issues as well. and all of this is the purpose of today's hearing. fbi director ray said it well when he said this. 5g technology provides the capacity to exert pressure or control over our telik medications infrastructure. it provides capacity to maliciously to fight or steel information. conductdes capacity to undetected espionage. undetected espionage. because of its economic and security implications, the race to 5g has elicited fierce competition among companies and governments around the world. 5g is a national strategic
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priority of china. the chinese government has billion more than $400 in development. it is supported chinese industry efforts in international standard-setting bodies. expectllocated domestic him for 5g. it is supported deployment of 350,000 5g stations in china. which is nearly 10 times as many as are deployed in the u.s. huawei has grown its income to $107 billion in 2018. 28% of theo, it held global telecommunications market , up 4% from 2015 alone. of all handsets sold
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in india are chinese made. however, the root of our concerns with chinese companies is not the growth, but requirements placed on them by the chinese government. according to a recent letter an admiral and [indiscernible] intelligence love requires all support,ompanies "to assist, and cooperate with the security services of china's one-party state." the letter further states and i quote, the chinese cyber security law and other national strategies like military civil fusion mean that nothing chinese firms do can be independent of
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the state. firms must support law enforcement, intelligence, and national security interest of the chinese communist party. a system fundamentally antithetical to the privacy and security of chinese citizens and all those using chinese networks overseas. so, exactly what does that mean? i think that is a crucial question. i visited china for 40 years. assuming the interpretation of this law is correct, i find this deeply troubling. i think every nation ought to think long and hard about the consequences of opening their internal telecommunications networks to this kind of data extraction and potential espionage. so we need to lead, but with caution.
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as a member of the intelligence committee for a long time now and other members of this committee join me in that, i really view this hearing is just the beginning. this is revolutionary. we must know well, all of its aspects. >> this is why i have a flip phone. nobody can get in it. >> chairman graham and members of the committee. thank you for the opportunity to testify on efforts to enhance the fifth-generation mobile's the -- mobile communications network. cyber security and infrastructure security agency, we leave the national effort to save -- safeguard and secure federal networks from cyber and physical threats. we serve as the nation's risk advisor. communication sector is an integral part of the u.s. economy and national security. underlying the interests of all businesses and government.
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it provides an enabling function across all critical sectors. advances in 5g will support greater bandwidth, the capacity for smart devices that make up the internet of things, and ultralow latency necessary for highly reliable and critical communications. autonomous vehicles, critical manufacturing. medical doctors, and the smart electric grid are present a small fraction of technologies 5g will support. every day, my agency's assessment data system works with private sector companies to strengthen the security of existing and new technologies so we can collectively realize the benefits they offer. there is no doubt there will be a broad and diverse range of possible risks associate with 5g technologies, threatening to some -- to exploit confidentiality and availability of data as well as the critical flushes the data enables. in a position to manage those risks, we established a 5g work -- 5g group to develop expertise
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in emergency preparedness, cyber security, and infrastructure security. the group works closely with industry partners and coordinates on tactical and strategic risk management efforts alongside the department of justice, the fbi, state, the fcc, dod, and the intelligence community. we are working with partners in the industry to establish a common baseline understanding of 5g deployment by which we can guide priorities. we are taking a risk based approach to understanding the implications of the glowing debt growing global presence of this equipment throughout the 5g technology stack. a potential for chinese intelligence and security service to use chinese firms is routine and systemic f -- espionage platforms is concerning. it potential direct threat to our mandate to ensure emergency preparedness communications. supply chain securities are
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critical to manage risk and we're working with industry to manage our efforts. the national defense alteration -- authorization act of 2019 included a provision that generally prohibits federal agencies from contracting with entities that use telecommunications equipment by entities controlled by the chinese government. , currently developing -- to -- regulations are being developed to implement that law. the federal government now has a body with the appropriate acquisition authorities to take action on technologies including 5g. defense and national intelligence now have the authority to issue government wide orders. and we have established a
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mechanism to collaborate with experts. our supply chain risk management task force has brought together 27 partners in 40 of the most significant companies in the sector to reach a consensus interagency efforts like telecom. dhs represent critical infrastructure including information technology and communications. we assess risks posed by transactions and engage with our partners in acquisitions. research and development is also critical to our mission. approaches to protect legacy, -- we announced up project to protect legacy, current, and 5g network communications. and before closing, i want to emphasize our success will depend on engagement with national allies. we engage with national partners on a range of sector risks, notably, as my colleague from the state apartment will ask us further, earlier this month in russell's, we
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for --d an international conference were future communications networks. the government and industry are prepared to defend against them. thanks for the opportunity today and i look forward to your questions. >> ranking member and members of the committee, thank you for the opportunity to testify. i asked my entire written statement be included in the record. thank you. as the rule becomes more interconnected, international policy issues are becoming critical to our national security, human rights, and economic prosperity. the state department promotes u.s. policy interests in cyberspace by engaging with our allies and partners to advance our vision for open and reliable secure digital environment. with the fifth-generation of 5g,
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the number will be empowered. they also include the massive amounts of data transmitted by the internet of things artificial intelligence. -- will also advance artificial intelligence. with all the critical services relying on 5g networks, the stakes were safeguarding them could not be higher. as countries around the world upgrade their systems to 5g technology we're urging them to , adopt a risk-based security framework. the department is executing a global campaign on 5g security that includes strategic bilateral and multilateral engagements to convince our partners to adequately secure these networks. an important element of this approach is a careful evaluation of hardware and software, equipment vendors, and their supply chains. criteria should include whether vendors are subject to control by a foreign
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government with no meaningful checks and balances and compelled to cooperate with these vendors with security and intelligence agencies. because of the role vendors play in maintenance, they can be order to undermine network security under chinese law, as the ranking member mentioned, they are required to cooperate with chinese intelligence services. the chinese government does not have any meaningful checks or balances on its power. as president xi jinping told officials in january, china does not walk a western road of constitutionalism, separation of powers, or judicial independence. we are concerned china could compel action spy network vendors against the interests of our citizens or citizens of other countries around the world. chinese technology firms are already working hand-in-hand
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with the chinese government to express freedom of discussion and human rights through surveillance, censorship, and restrictions on internet access. if chinese companies build the underlying 5g infrastructure, they would be in an even better place in the future. china has a long history of undertaking property theft to benefit its commercial interests. last december, the united states announced that since 2014, chinese cyber actors associated with security have multiple u.s. -- hacked multiple u.s. cloud providers, and this allowed access to networks in global companies more than 12 different countries. patients should not allow 5g to -- nations should not allow 5g to be another vector for china to steal their intellectual property. the united states would be a leader in 5g employment. they would use and trusted vendors in our networks. patients should not allow 5g to
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many other countries are acknowledging the supply chain risk and beginning to strengthen their security alongside the united states. in march, the european union commission released a set of recommendations to improve the cyber security 5g networks, noting evaluations of equipment suppliers should include the risk of influence by third country, notably, in relation to its model of governance. this principle should be applied rigorously. czech republic hosted more than 100 represent us from 13 countries, including the united states, as well as the european union and nato. country, notably, in relation to we were there to build consensus on 5g security. this effort produced the principal on how to build secure and resilient 5g networks based on free and fair competition, transparency, and the rule of law. moving forward, the proposals provide partners and allies with secure 5g networks and we will continuing bilateral and multilateral efforts for the internet and all the critical services 5g will enable our secure and reliable.
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thank you for the opportunity to appear before the committee today. i look forward to your questions. >> the criteria you are just talking about, you are telling our allies you need to make sure these products are secure for lack of a better way to say it. is that correct? >> correct. senator graham: under the opening statement given by senator feinstein, based on the way china does business, how could an ally possibly buy anything from china and live within the criteria? >> we want them to adopt a risk-based framework. >> if they adopt a risk based framer, they are not dying from china. do you agree with that question mark is this a policy? >> yes. where weraham: that is
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have hearings. we are telling the world if you buy chinese 5g stuff, you're not doing business with us. seems to me we need to up our 5g game because of there is no one other than china, we have a problem, do you agree? >> there are other vendors as there. and erickson and samsung. alternative to china that are not under the control potentially -- sen. graham: is it fair to say we are trying to put china's 5g efforts out of business because of the way they do business? >> that is not our goal. sen. graham: is and that the result? >> it will -- sen. graham: i am fine with that being the result if they are doing the things you say. i just want china to know where we stand. >> i do not think that is an economic reality. sen. graham: they need to change the way they do business, right? >> it is a fundamental difference in the way we look at -- sovereignty, values. sen. graham: under its current
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form? isn't that a simple message? >> their private sector is an extension of the government. sen. graham: i want everybody to understand -- if you are an ally to the united states, these criteria we are asking you to consider, there is no way in hell china can meet those criteria because of the way they govern. so the policy of the united states, democrats and republicans i hope, will be that if you buy their stuff, because of the way they do business, you are going to lose access to information technology coming from america. is that a fair statement given where we are today? >> i would only say we have to protect our information. if there is a high degree of risk, which these vendors create, we have to -- -- reassess how we are sharing in the future. sen. graham: if you buy it, we will not give it to you. >> we will reassess. sen. graham: thank you.
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>> right now, both the heads of come areand broad residents of california. that was a battle over the 5g chip. where this all goes is -- i think has to be really reduced to the level of everyday understanding, mr. chairman. because -- let me ask a question. isn't it true that original manufacturers of backbone telecom equipment often maintain connections with that equipment in order to provide routine maintenance? but those back channels could be used to insert malicious software virtually undetected. is that correct? >> that is absolutely true and occurs on a daily basis.
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there is updates to that software. sen. feinstein: would you agree with that? >> yes. sen. feinstein: so the question comes -- for somebody like me, i begin to question the whole 5g thing because it creates a situation that can be used to do tremendous harm. and that is the invasion and removal of -- what do we do about that? >> that is why we need trusted vendors to be part of that ecosystem. you need to be able to trust a partner to patch vulnerabilities and not insert malicious codes. >> i agree with that. we adopted a similar approach a couple years ago when we issued a directive to remove certain antivirus products from u.s. federal networks. the issue was an antivirus product that had flawed access to machines below at which we monitor.
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that data was sent back to moscow for further analysis along with other machines globally. given the system of laws in russia, much like in china, the intelligence and military services had unfettered access to that data. potentially you had a situation where the military and intelligence services had access to federal networks. that is untenable. we issued exclusion orders. that is a similar framework we can use in this case, whether it is 5g, any sort of ict technology. we need to have a framework within which we can evaluate risk. if it is a persistent access question, that is an issue i will be concerned about. sen. feinstein: i believe it is and we should be concerned. i think we should be concerned about the chinese law that makes this permissible. i think it should become a major element of state department policy to try to straighten this out before we proceed and have
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real problems. because huawei has been very assertive. as a member of the intelligence committee, i have heard from ceos about importunings. this is a big deal. it could make our country incredibly vulnerable. we cannot let china do this. it is that simple. i appreciate your comment. >> we agree that is the top priority. we are doing hundreds of engagements around the world with our allies and partners to raise the issue. it is one of our top rarities. >> yes, ma'am, i agree. we are doing a significant amount of outreach and engagement with american critical of a structure community, how they engage with china in that market and how they partner with them and sharing information as best we can. we have to keep in mind that the
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dawning of the chinese threat from an intelligence community and risk management committee perspective came into focus over the last two years. we are making up a significant amount of ground. i am seeing progress, both of market and partner. i think that trend will continue. sen. feinstein: is there pressure to change -- for china to change the law? >> i do not think the law matters. i think a single party government -- everything that flows from the central party is a manifestation of their philosophy. the law is important because it is telling you what they do, but they are going to get what they want anyway, law or not. >> we agree with that. we are concerned with the national intelligence law for 2017 but we would agree that the system they have in china -- there is not a judiciary.
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no company can say i do not follow the mandate. it is one party communist rule and they have to follow the dictates of the government. we think it is fundamentally different than any other type of western venues, element structure. sen. feinstein: last question -- until it is clear and decisive, should we move ahead with making 5g available in this country? >> in our country, all four of the major carriers have confirmed they are not going to use chinese technology to build their 5g networks. we are going to be secure in the united states. we are talking to our partners and allies about not using it in their networks. that is where the challenge remains. >> i agree. we have to continue moving forward. the big four have committed. i just had a briefing yesterday with rural telecommunications companies. they have economic realities we have to help them out on. huawei does have a product that at times comes in the door a little bit cheaper.
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plus, they provide a fully integrated staff, which is attractive to a smaller organization. we need to take a harder look at that. ultimately, where we are going is -- if the u.s. continues on the path we are on, by 2025, we will have the broadest adoption of 5g anywhere in the world. the faster we can get to 5g, the more we will be able to hit the innovation layer. that is above the core. that is going to be where all the innovation and advancement comes. it rides on top of 5g. >> thanks for this hearing. short of a digital pearl harbor, it is difficult for people to get their heads around this issue. i don't think there is any critical -- any more critical issue. thank you for scheduling this and to both of you for being
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here. could each of you in less than 60 seconds apiece explained to americans why the job from 4g to 5g -- what is it? explain what 4g to 5g technology changes and how exponentially does that expand our threat surface. >> i will start. with the transformation from 4g, we have been thinking about how we communicate over the internet using our smartphones and telecommute occasions technology. 5g will be machine to machine communication. the internet of things. we will see things like telemedicine, automated manufacturing, as well as the communication needed to occur to make our infrastructure work in the first place. what makes the stakes so high is a disruption to that underlying 5g network will interrupt those services. it is much more important that we get that security right. even availability is a critical issue. >> so the jump from 3g to 4g went from people having a flip
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phone to -- regularly smashed on tv in debates, and 1.5 g for the chairman. >> lindsay does not have a g. smartphones,ent to that isn't a exponential change, it is not linear. sort ofe same exponential change again? >> without question. >> secretary krebs, how would you summarize it? >> i agree with everything ambassador strayer said. i will add that the height of 4g technology is ridesharing and ride hailing apps. if you lost that signal, you would not -- half your staff would not know how to get from meeting to meeting. when we talk about 5g, we are not talking about hailing a car. we are talking about autonomous vehicles not being able to operate, about telemedicine. this moves from data confidentiality to lifesaving.
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sen. sasse: when we meet with our allies, they tell us lots of them have to be installing huawei or allowing huawei in their supply chain because no other vendors can compete. simultaneously, you say the four major carriers in the u.s. have committed that they will not use huawei's stuff. why did the europeans think they need huawei and we say we will advance without it domestically? >> on one hand, you have an economic reality situation where there are only so many vendors available with only so many production runs. in some cases, there is additional financing that comes along with it that maybe self financing. or low to no cost financing. the attractiveness of a huawei or other -- whatever it is subsidized by the government makes it easier for these governments that may not be able
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to invest in the upfront. one of the arguments -- one of the stories we continue to push is you have to look at the total lifecycle. recently, the u.k. has issued -- if you have not read it yet, i securitycommend the valuations sender report report on huawei. they have 15 to 20 years of experience, real-time, in the network, working with huawei. it is a damming report. the quality of the product is not great. the existence of vulnerability, the ability to understand what is happening on the networks, it is not there. these are costs that are going to pile up for 10 to 15 years. >> on the cost front, over time, if countries continue to build out huawei equipment in networks, that will make it that much harder down the road to make the right decision and turn the page. if they do experience espionage or disruption services, it will be too late to turn back.
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this is the time to act to make a decision about how to migrate away from that un-trusted vendor. they do not have to do it overnight. we are saying find a pathway to make yourself secure for all of our sakes. our joint economic relationships and our important security relationships. >> i have heard some of our allies say huawei is higher quality and lower cost than anything else they can buy right now. is that true? who are the other -- nokia, samsung -- how far behind are they? or is that not true? >> it is not true. our 5g rollouts are using only those other vendors. they do not need to wait for chinese technology. they are going to lead with samsung, nokia, and ericsson. it is not true that they should have to wait. there might be economic considerations. we hear that it is up to 50% cheaper on the front end, it as mr. krebs mentioned, the long-term lifecycle costs -- the u.k. found hundreds of
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all abilities in the software. you have to constantly patch that. patching that is not worth the cost. it makes the cost longer in the long run. >> the u.k. government set up a dedicated oversight mechanism to monitor huawei and huawei has not demonstrated in a 10 year period any improvement in their security engineering process. they are still doing the things they said they were going to fix 10 years ago. they promised a transformation program. there is no plan. there has been no change. i think the premise you can establish is not cost-effective. actions speak louder than words. we are not seeing the follow-through globally. sen. sasse: i want to underscore two things. thank you to both of you.
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i think -- i hope we talk more about how security updates will work. and a big data world. we cannot envision right now how the world is going to change between five and 10 and 10 and 15 years for the uses of big data. when you are having this cyclical relationship between data and updates, there is no way these boards will be run by governments. that they will be fast enough and confident enough. to do with machine learning and an ai environment and know whether or not you are being exploited. and fundamentally, the private sector in china is an extension of the government. if our allies decide to trust huawei, they are deciding to trust the chinese government with their big data. sen. graham: i would like to echo that. it is not about overseeing huawei. it is about overseeing china. i have not seen bipartisanship like this in a long time. i would get a copy of this hearing and listen to it if i were a member of nato. senator klobuchar. sen. klobuchar: along those lines, china, if we look at
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taking it outside of this particular technology, they are taking a comprehensive approach to ensuring their edge, including the international standard-setting process for new technologies. the written testimony of dr. lewis, a witness on the next panel, notes that representatives from chinese enterprises are trying to shape the agenda and outcome in standard-setting organizations were key technologies like 5g and the internet of things. what is the state department doing to ensure that international standard-settings are politically neutral? >> through the u.s. government, the commerce department is a member of the third generation partnership project.
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the body that is helping to define standards. we need to remain vigilant to ensure we are having the process determined by what is the best ideas in the best technology solutions rather than the political decisions that the top-down framework that the chinese would rather have. there is an organization at the u.n. calls the national telecom union. the state department leads in our engagement there with a range of private sector. we go to those meetings putting forward the best ideas and ensuring we will not have a process governed by politics based on science. sen. klobuchar: are we working with allies? given some of these issues that have been raised here. >> absolutely. we have a broad engagement with our allies. as we go into all of these. we are working in regional settings most closely with the western hemisphere states at the u.n. body. as our partners in europe. sen. klobuchar: what can
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governments do to prevent -- national government like china from skewing the standard setting process. to serve their own interest? >> participate. absolutely participate. one of the things we are seeing -- on my team i have subject matter experts participating in the process traveling around the world on a regular basis to engage in conversations. make sure priority services perspective. we have to -- government have to take pride in the representation. in some cases we are seeing chinese -- it is one country, one vote, but it is not as thoroughly -- necessarily the government providing the vote. sometimes it is the company and sometimes the company is a chinese company. in a country that is voting on behalf of that company -- country. take pride and represent your country. sen. klobuchar: some of my colleagues asked you how we can mitigate threats in other countries using huawei.
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if our allies and international partners fail to safeguard their networks from foreign intrusions, how could it compromise the security of u.s. networks? >> there is a concern about our intelligence information and other critical information we are sharing. we do not want that to be lost, compromised. more data flows between the united states and europe than anywhere else on the planet. if we have increasingly intertwined economies and supply chains, a disruption of 5g that disrupts their economy will have an effect on our shores as well. and the supplies -- supply chains and ability to access services. that is why it is important that we ensure that even their networks, for their own citizens' benefit, are secure. it is to our benefit. to ensure they are secure as well. >> the one thing i want to underscore is the availability of the network. if it is a mission in europe or africa or elsewhere, if it is
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riding on a commercial network, the ability of that mission or department of defense to run command and control -- they control the network, they control whether we can communicate. at that point, who cares whether they are listening in? they can control whether we connect dots. it is increasingly about availability of the networks. sen. klobuchar: thank you very much. sen. graham: let's keep going as long as we can. see if we can get through the hearing here. it is a very important hearing. sen. collins: thank you for calling this hearing, which i think is important. we are in the middle of a technological arms race. china is not just one threat. among many. china is the national security threat facing this country. now and perhaps for many years to come. we are in many ways -- i was
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struck by something you said. the last two years we have woken up to the serious security threat that china poses to us across a range of fronts. we are making up for lost time. one area where we are making up for lost time is u.s. companies have been transferring sensitive technology to china and that technology ends up in the hands of the chinese government and military. this has to stop, which is why i have introduced the china technology transfer control act, which calls replacing china's core technologies on the control list and for sanctions on individuals who help u.s. businesses skirt these export controls. we need to stop fighting yesterday's war when it comes to not only how china steals u.s. technology but also american ideas and american innovation. this is the next frontier in our fight for our national security. ambassador, let me invite you to comment on efforts like this.
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what more do we need to do to make sure our most sensitive technology does not end up in the hands of the chinese military? >> your legislation seems to be hitting at an area where we are concerned. under the previous law, the export control format, congress directed the commerce department to conduct a process which started last november to look at technologies that are important to our national security and consider whether expert control regulation should apply to them. that process is something we need to focus on. we want to make sure technology is available for companies to be able to innovate around the globe. we do not want to see it in the hands of authoritarian governments that want to move that technology to government facilitated ends. we have to look closely at that. >> i think that is right. as we look at china -- these are not my words. companies are increasingly have to understand that china is
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three things. it is an opportunity, a market. it is a partner. they can do r&d, technology development. it is a threat. it is a strategic threat, stealing ip. on the first one is the opportunity. companies are starting to come to grips with that market is not what they thought it was. that market is not what they were told it was. in china, you're only as successful as the government lets you be. as soon as you are no longer of use, they tamped down and you are out. on the partner side, that is where there is a lot of concern i have. universities are a great example of shared r&d partnerships, sensitive technologies being developed collaboratively. we talked about ai and big data. if these tools are taken back from china -- that is not congruent with our values. that is where we are going.
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we are seeing companies that are looking at markets through the lens of our they an autocratic come authoritarian state or democracy? i can play ball and one but not the other. >> you make a fantastic point about digital authoritarianism. china has built the most unbelievably perfect authoritarian regime the world has ever seen. it is horrifying. when it comes to markets, we need to send a signal to american companies that they have a choice to make. when they think of china as a market. there is no just going into china and investing and sharing technology and thinking that will not benefit the authoritarian chinese estate. it will. it is going to reinforce the chinese military. those technologies are going to be weaponized. american companies have to make a choice about where their loyalty lies. is it with the free and open international system met with american security, or is it with
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what china is trying to do? let's go back to the threat that huawei poses. what opportunities for cyber espionage and attacks might be made available to china in a country that would rely on telecommunications equipment from huawei? >> the oversight board describes the quality of the engineering is not great. vulnerabilities are left open. china and other capable actors, russia, iran, north korea, could exploit vulnerabilities. that is one. the second is the update process. as the ranking member talked about, pushing updates. if that update comes directly from mainland china, that is potentially a problem given the oversight. third is the way they manage this equipment tends to be by shipping out chinese nationals to the host country for hands on. you have a physical insider threat.
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so three threats. striking there is if i understand correctly my there is no american company currently developing a 5g equipment. is that right? no american company developing this equipment. >> no american coming does the radio part. other companies do the switching around in other parsons -- portions of it. >> i think that is striking. sen. graham: why do we do senator coons? after senator coons, we will take a break. we will finish up the first vote, bert early and -- in the second one. we will take a break and resume the hearing. sen. coons: i am grateful we are here -- holding this hearing. and that so many members have participated. if i have a simple point i hope to make is that patents matter in this space. if any race to address other challenges facing -- in a race to address other challenges facing this country, like prescription drug prices, we do unintended harm to our patent
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system, that will cause significant harm to our race for 5g. i share my colleagues' concern about the ways in which china is now developing will be the most important technological advance of this coming decade. i just returned from leading congressional delegation to china, south korea, and the region. 5g's potential to revolutionize our lives and produce hundreds of millions of dollars in new technologies, new applications, are intriguing. the potential that china will be the winner in this next generation of technology and that will allow them to disrupt what will be always on, always present, central networks that drive everything from our vehicles to health care to national security to our power system, is chilling and concerning. i am convinced our ability to be
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leaders on the global stage depends on our ability to command the into intellectual property of 5g. i was encouraged to hear about the prague principles. china and south korea are outpacing the united states in standard essential patents that will determine who sets the standards and who benefits from them. we were the dominant leader in 4g. what do we be doing to make sure we become the leader in 5g standard essential patents. how do we challenge china's ambitions to be the dominant force and how central do you think intellectual property and patent licensing will be to which country or team of countries most benefits from 5g? >> i avoided patent law and law school.
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i'm going to focus on one part of your question. we have to identify what the incentives are for american innovation. i think in terms of the radio network, there is an ecosystem that can support -- there is a level of innovation. we need to invest there. because we are going to get to broader 5g deployments before anyone else, we have an enormous opportunity in the u.s. to drive global innovation, global adoption. that is the opportunity space. sen. coons: that is optimistic. we have 350 million people. they have over 1.3 billion people. they are very rapidly racing to build out as big and robust a 5g set as they can and the difference in scale in terms of
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our testbed requires our integration with our open society allies. that depends on standards and patents and those being held by american or american-led companies. >> my policy recommendations are similar. we need to keep pushing the right kind of incentives to get our companies involved in these standards processes so they can get patents out of them. it is hard work. it is not just r&d but developing consensus through the industry that you have the solution. these processes are only finished when there is consensus about the right standards. unanimity in the room about having the right standard to do a particular function. coons: one of our core challenges -- senator hawley suggested a bill of a decoupling approach that says we will build a world where you are either american technology or chinese
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technology, and it assumes that it is sort of a binary world, much as we had during the cold war with the soviet union. where technologically, we have largely separate economies. my argument would be that horse left the barn 20 years ago and frankly, we have fairly thoroughly integrated innovation economies between the united states, china, and the rest of the west. how do we set standards in a way that allows free and open principles for 5g to win out? >> at these standard bodies, we need to ensure that they continue relying on the substance and not political direction. the chinese have encouraged large numbers of people to make contributions. in some cases, we hear paying them to make contributions that kind of water down the quality of the process. so we can make sure that the ground rules and those organizations are fair and cause the best ideas to percolate to the top. sen. coons: 10 years ago, these did not exist. they were not widely adopted. the things we do from hailing an uber to checking our home
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security systems that today are just routine and common, were big advances a decade ago. what you are trying to convey to us and what i have heard in many briefings, is that 5g is two orders of magnitude in terms of speed, content, and the applications, will be dramatic and will change a lot of how we live our lives. should the average delawarian be concerned about the possibility that chinese technology will be that data isw transferred globally between the united states and europe, or between the united states and the rest of the world? should they be concerned about their privacy, about the stability of the networks, and about their security, if china ends up having the winning hand in the developing a 5g? >> if you stay domestic, there's always going to be a global information ecosystem. when you travel. the average delawarian travels, they are no longer under the protection of u.s. law.
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they are subject to the authoritarian demands of china, their technology. that is a significant concern of mine. >> our citizens should not have any concern within united states. our companies will follow best practices about management of data. s are building in security and they are not providing the opportunity for a vendor to undermine this system. sen. coons: we are having a significant disagreement with some of our core allies about backdoors, how big are they, where are they, how are they designed. we should not take our eye off the larger challenge, which is that china's goal is to build the entire house. we need to step up our game to make sure we are part of the framing of the next generation. thank you for your work. thank you for your testimony. sen. graham: we will adjourn the hearing until the vote. we will go in vote and then come back and get started again. thank you.
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