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Government will require 5G auction winners to create private network with more robust security

The government is preparing an ordinance that will require the implantation of a private communication network for the federal administration with more robust security requirements to be met by the telecommunications companies winning the 5G auction that want to be able to serve the Union, according to sources heard by Reuters and a document to which the report had access.

REUTERS / Dado Ruvic

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The ordinance, which should be published this Friday in an extra edition of the Official Gazette, includes as a requirement for the implementation of networks in the country “the establishment of an obligation to implement a private communication network of the Federal Public Administration”.

This private network, also according to the document to which Reuters had access, foresees a 5G mobile network, limited to the Federal District, to serve the activities of public security, defense, emergency services and disaster response, and a fixed fiber network. great for serving federal public agencies, complementing the existing government network.

The text was the solution found by the government to ease the restrictions of President Jair Bolsonaro on the performance of Chinese equipment supplier Huawei and, at the same time, not to prevent the company from operating in Brazil, which would harm telecom operators.

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Since the beginning of the process, Bolsonaro, in line with the government of then American President Donald Trump, had the intention to ban Huawei from operating in the Brazilian market. The president’s plans, however, come up against the fact that the Chinese company already supplies most of the equipment on Brazil’s 4G and 3G networks and has the lowest prices.

According to the operators, the ban on the operation of Huawei would force companies to exchange a good part of the 4G and 3G equipment, currently used in the country and that could form the basis for the deployment of the 5G network. The calculation of the companies is that the cost of modifying the entire network would be between 150 billion and 200 billion reais.

The ordinance prepared by the Ministry of Communications, according to sources heard by Reuters, does not cite Huawei nor is it directly addressed to the company that supplies 5G equipment, which would sour relations between Brazil and the Chinese government in a moment in which, with a shortage of vaccine supplies, Brazil increasingly needs the goodwill of an Asian country.

“These security requirements apply to all supplier companies. Anyone who fails to comply does not enter the secure network,” said one of the government-linked sources heard by Reuters.

Another source who closely follows the issue, says that the demands that will be made pave the way for Huawei to stay out of the federal private network, which would ease Bolsonaro and military restrictions in the government, while allowing the company’s performance in the general network.

The government analyzed several fronts to prevent the Chinese from providing equipment to the winners of the 5G auction. But neither option was viable without creating a diplomatic crisis that could bring serious damage to Brazil. Virtually immune to offenses, the Chinese government would likely react strongly to an economic blockade, a diplomatic source explained to Reuters.

Among the alternatives would be to use the National Security Law, in which the government would not need to give clear explanations about the decision. Another, that the National Telecommunications Agency should include in its public notice measures that would allow the restriction. The agency’s directors, however, warned that without legislation on which to base themselves, they could not include this type of exclusion in the notice.

The final text of the announcement was sent by the rapporteur, Carlos Bigorri, to the other directors on Thursday night. An extra session was scheduled for next Monday for the text to be voted on.

According to sources heard by Reuters, the text remains close to the initial draft and does not include restrictions on any supplier or requirements that target any of the companies.

However, in preparation for Monday’s vote, the rapporteur on Thursday sent a letter to the Ministry of Communications inquiring about the existence, within the scope of the Ministry of Communications, of “any political project or initiative for the telecommunications sector that has focus on cybersecurity, government communication, the private network of the federal public administration, national public security applications or related. “

The answer to the rapporteur’s inquiry, which has not yet been sent, will be the ordinance, which should then be included in the notice that will govern the 5G auction in the country.

The intention of the Minister of Communications, Fabio Faria, is still to maintain the auction in the first half of this year. On Tuesday, after Anatel’s decision, Faria embarks on a trip that includes Finland, headquarters of Nokia, Sweden, where Ericsson, South Korea, Samsung, and China, of Huawei and ZTE are located.

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