Thread by @declanganley

Beijing is turning the screws on New Zealand following NZ's Huawei 5G ban. The Brits reported backsliding isn't helping. Beijing is driving a #5G wedge between allies & London is in the grip of regulatory capture by the mobile carrier lobby: techcentral.co.za/new-zealand-fr…

Watching #5G situation play out in the U.K. I'm going to give my two cents on what I think is going on right now. Beijing knows that splitting 'The Five Eyes' alliance on #5G will be a huge victory for China. It will seriously compromise future capability in the key cyber domain

Beijing had to peel of one of 'The Five Eyes'. They failed to get Australia, New Zealand or Canada to break ranks first. I have to admire New Zealand's heart in this, they were getting squeezed hard & Beijing likely though bully the smallest guy first & he'll fold. NZ didn't.

Beijing knows the U.K. establishment is in turmoil over Brexit. The establishment, understandably wants to keep all trading options open & fears going into an unpredictable 'unknown'. That's made the U.K. establishment even more vulnerable than usual to regulatory capture.

China is the U.K.'s 5th largest trading partner but in some ways the China trade relationship is more important than even that ranking suggests, especially given the path the U.K. may think it needs to carve for itself post Brexit.

UK carriers all want to use Chinese 5G kit as China subsidises it via discounting & predatory vendor financing. The carriers want to prop up the spread between the production cost of data & what they sell it for via their (dysfunctional) consumer business models.

For some of these retail carriers, Beijing's subsidies are the difference between being able to maintain the current model of 'Buy wireless oligopoly position in auction & rent seek via *this is the price take it or leave it* model', or having to change their business model.

The carriers don't want to risk changing their business models because like all rent seeking oligopolies, they hate risk. Risk is the crazy stuff that entrepreneurs do & wireless rent seeking carriers aren't run by entrepreneurs, they're run by accountants.

And so the accountants that run the big wireless carriers need the Beijing subsidies, otherwise they genuinely don't know how they'd deploy 5G. Change the business model? You must be insane, that involves risk & work. So they lobby to maintain the status quo.

So what they do in the current environment in the UK to lobby? Scare the crap out of the officials on the one hand 'without 5G in the UK by X date the UK economy will lose badly etc.' There's no other way to do it because Chinese kit is way ahead (it isn't but stay with me here)

Then they give the security assurances 'we are confident that there is no serious security risk, that any risks that are there can be easily mitigated, oh and ignore the Americans because it's just Trump's protectionism (ignoring that the U.S. has no big 5G vendor to protect).

Insert worries about alienating 'the world's largest economy & what may post Brexit become a key trading partner for U.K. This is not a wise moment to annoy Beijing, we have national interests that we must balance etc.' Beijing plays some appropriately ominous background music.

All sets up the UK for a regulatory capture rollover to deliver what retail mobile carriers want, Beijing's subsidies for UK 5G rollouts. The Carriers have been the Trojan Horse Beijing has used more effectively than any Greek ever did. They'll split 'Five Eyes' on a key domain

& God forbid there is one but if there is, the first 10 minutes of the next great war will be fought in the Cyber Domain & it'll make 'Blitzkrieg' look slow & contained. China has to be stopped now, the carrier lobby has to be banished on this issue, the #5G stakes are enormous.