Sovereign solutions for me, but not for thee: 5G version
The Commission’s revised Cybersecurity Act may face resistance from China-friendly Member States and telecom operators, who warn of high compliance and vendor-switch costs and seek public reimbursement.
As we wrote before, the revised Cybersecurity Act - a truly important and needle-moving initiative by the European Commission - is likely to receive a cold welcome from industry players who are quick to demand European sovereign solutions when it benefits them, but just as quick to dismiss other similar initiatives when they negatively affect their profit margins.
Shortly after the tabling of the Cybersecurity Act, Connect Europe - an association of telecom operators - published a very diplomatic and vague statement that should be read between the lines:
“However, we caution against policies that would significantly weaken the very sector they aim to safeguard. Telecom operators face substantial investment requirements to complete 5G and fibre roll-out, while current regulatory conditions and the lack of scale limit their ability to invest. In this context, Connect Europe warns that the adoption of the current CSA draft will exacerbate the burden imposed on the sector, with multi-billion-euro additional regulatory costs that are currently likely to be underestimated. “
As far as a slightly biased third-party reader can tell, the CSA aims to safeguard European consumers and countries by introducing new security measures that both (some) Member States and telecom operators have failed to implement under the voluntary 5G Security Toolbox framework. Connect Europe continues:
“If these obligations are not grounded in robust, evidence-based risk assessments and supported by mitigating measures such as cost reimbursement mechanisms, they will materially and adversely impact network deployment, operational continuity and investment planning. Currently Europe urgently needs more, not less, investment in connectivity.”
Reading between the lines, the association argues that mandatory measures to switch away from high-risk vendors such as Huawei and ZTE should be compensated through “cost-reimbursement mechanisms” funded by European taxpayers.
This may, of course, be part of the telco industry's negotiation tactics - the political discussions on both the Digital Networks Act (DNA) and the Multiannual Financial Framework are still underway.
However, while European digital-sovereignty enthusiasts discussing cloud services and various SaaS solutions rarely address the cost of switching from non-European to European providers, similar commitments are notably absent when it comes to highly vulnerable, foundational 5G infrastructure, which also enables other sectors (such as energy, transport, health, finance).
This is especially upsetting given that the European 5G equipment alternatives - Sweden’s Ericsson and Finland’s Nokia - have demonstrated measurable success both in Europe and worldwide and have real opportunities to scale.