The U.S. and EU are aligning more closely on a range of digital issues, speakers said Monday at a webcast interview with European Commission Vice President Margrethe Vestager and Senate Intelligence Committee Chairman Mark Warner, D-Va. Asked what their priorities are for the U.S.-EU digital relationship, Vestager said some key issues, such as secure supply chains, the approach to AI and the stance on regulating the technology sector, are obvious. Warner called for collaboration on values-based tech development that includes standards and rules on transparency and other issues. His key concern is the failure to create joint cybersecurity norms and policies, an omission he warned could be devastating. Cybersecurity must be part of every EU and U.S. discussion, Vestager said. Tech won't be successful if it's unsafe and people don't trust it, she said. Barriers to online manipulation of democracies must be integrated into everything stakeholders do and into digital skills people need as the first line of defense. When China or Russia sends hackers against a private entity or government, it will succeed without shared concepts of security services in Europe and the U.S., Warner said. On AI, Vestager noted that upcoming EC rules aim to be balanced and that their ban on certain uses of the tech will affect a limited number of cases. Warner hoped the U.S. embraces AI without subjecting people to discrimination, but this technology hasn't penetrated the U.S. policy world much yet. On content moderation on platforms, Vestager said the Digital Services Act sets up a systemic redress mechanism that balances the need to take down illegal content while preserving freedom of expression and imposes accountability on companies to ensure operations don't create risks. Platforms aren't doing enough to address disinformation, Warner said: Content moderation in the U.S. will come about in bits and pieces because the country has been so slow in addressing it.

Commerce Secretary Gina Raimondo suggested her agency has no plans to remove Huawei from the Entity List and said Wednesday she will aggressively use trade tools to compete with China. But she also said she will prioritize efforts to invest in U.S. technology industries over imposing more export restrictions. “My broad view is what we do on offense is more important than what we do on defense,” Raimondo told reporters. “To compete in the long run with China, we need to rebuild America in all of the ways we're talking about.” She said U.S. offensive tools include investments in domestic semiconductor manufacturing. But defensive tools may be necessary to address China’s “uncompetitive, coercive and underhanded” actions, she said, and Commerce will continue to maintain restrictions against Huawei. “A lot of people have said, is Huawei going to stay on the Entity List?” she said. “I have no reason to believe that they won't.” Commerce added seven Chinese supercomputing entities to the Entity List early Thursday, allegedly for activities that are contrary to U.S. “national security or foreign policy interests.” They were: Tianjin Phytium Information Technology, Shanghai High-Performance IC Design Center, Sunway Microelectronics, and Chinese national supercomputing centers in Jinan, Shenzhen, Wuxi and Zhengzhou. “These entities are involved with building supercomputers used by China’s military actors,” said Commerce. The Chinese Foreign Affairs Ministry didn’t comment.

FCC acting Chairwoman Jessica Rosenworcel and Keabetswe Modimoeng, chair of the Independent Communications Authority of South Africa, signed a memorandum of understanding Thursday, the FCC said. The MOU is the first of its kind between the two nations in more than 20 years, the FCC said. “I am eager to work together on priorities like 5G, rural connectivity, digital television, consumer protection, and emergency communications,” Rosenworcel said.

Global information technology spending is projected to reach $4.1 trillion this year, up 8.4% from 2020, reported Gartner Wednesday. All IT spending segments are forecast to have “positive growth” through 2022, it said. The highest growth will come from devices (up 14%) and enterprise software (up 10.8%), “as organizations shift their focus to providing a more comfortable, innovative and productive environment for their workforce,” said Gartner. “IT no longer just supports corporate operations as it traditionally has, but is fully participating in business value delivery,” said Gartner Vice President John-David Lovelock. “Not only does this shift IT from a back-office role to the front of business, but it also changes the source of funding from an overhead expense that is maintained, monitored and sometimes cut, to the thing that drives revenue.”

The U.S. should adopt “smart policies” to eliminate or reduce “vulnerabilities” in the global semiconductor supply chain “and enhance the U.S. economy, national security, and supply chain resilience,” the Semiconductor Industry Association told the Commerce Department’s Bureau of Industry and Security. Comments due Monday in docket BIS-2021-0011 will help shape recommendations to the White House on President Joe Biden’s Feb. 24 executive order to relieve supply chain bottlenecks (see 2103110054). Though “geographic specialization” in semiconductor production “served the industry and its consumers well, it has also created potential vulnerabilities in the global value chain,” said SIA. The industry features more than 50 “points” across the value chain “where one region holds more than 65% of the global market share,” it said. About three-quarters of global chip manufacturing capacity is concentrated in China and East Asia, “a region significantly exposed to high seismic activity and geopolitical tensions and lack of fresh water and power,” it said: Virtually all the world’s “highly advanced” semiconductor manufacturing capacity is based in Taiwan (92%) and South Korea (8%). The global value chain features “single points of failure” susceptible to “natural disasters, infrastructure shutdowns, or geopolitical conflicts and may cause large-scale interruptions in the supply of essential chips,” said SIA. “Geopolitical tensions may result in trade restrictions that impair access to crucial providers of essential technology, unique raw materials, tools, and products that are clustered in certain countries.” The association fears those restrictions could result “in a significant loss of scale and compromising the industry’s ability to sustain the current levels of R&D and capital intensity needed to maintain the current pace of innovation.” The smart policies the U.S. government will need to deploy to mitigate the multiple vulnerabilities should include “targeted investments to fill high-risk gaps,” plus collaborating with “allies and partners globally to strengthen supply chains,” said SIA. “The semiconductor industry needs targeted government policies and incentives.” The U.S. government should work through existing “multilateral and plurilateral forums,” including the World Trade Organization and the Organisation for Economic Co-operation and Development, “to coordinate key semiconductor supply-chain related issues,” it said: Supply-chain resilience, cybersecurity, joint R&D, export controls, intellectual property protection, subsidies and market access barriers should top the list of priorities. SIA urged a U.S. goal of achieving “a more diversified geographical footprint by building additional semiconductor and unique raw material manufacturing capacity in the U.S. and expanding the production sites and domestic sources of supply for unique and critical materials.”

Revitalizing U.S. semiconductor manufacturing and R&D could “drive innovation across many different sectors for decades,” the Information Technology Industry Council told the Commerce Department’s Bureau of Industry and Security. Comments due Monday in docket BIS-2021-0011 will help shape recommendations to the White House on President Joe Biden’s Feb. 24 executive order to relieve bottlenecks (see 2103110054). For the U.S. semiconductor industry to remain competitive and to strengthen the resilience of critical semiconductor supply chains, the administration “should prioritize incentivizing research, development, prototyping, and manufacturing of advanced semiconductors” domestically, said ITI. “Federal investment and incentives to boost domestic semiconductor manufacturing will level the capital expenditure playing field ... enabling firms to build new or expand existing manufacturing capacity in the U.S versus other locations where governments heavily subsidize semiconductor manufacturing infrastructure.” Promoting such financial incentives is “the single most important action” the U.S. can take “to strengthen these critical supply chains,” said ITI. “Augmenting domestic production of semiconductors, coupled with ensuring the continuity of necessary global supply chains, would make America’s semiconductor supply chains more resilient to future crises and ensure the U.S. can supply the advanced chips needed.”

The FCC told the U.S. Court of Appeals for the 4th Circuit that China Telecom moved too quickly to challenge in court the revocation of the company’s Communications Act Section 214 authorizations (see 2102020029). In January, the company sought expedited court review in court docket 20-2365 (see 2101220050). “China Telecom challenges the Commission’s decision to conduct the revocation proceeding through full written submissions before the Commission itself, rather than adopt more formal hearing procedures or hold an in-person hearing before an administrative law judge,” the FCC said in a Friday posting: “The decision whether and how to conduct a proceeding is not final agency action, so China Telecom must wait until the Commission issues a final order resolving whether or not to revoke its authorizations.”

Trade policy on China should prioritize technology issues and set “benchmarks" for a "phased rollback" of Trade Act Section 301 tariffs, the Information Technology Industry Council wrote new U.S. Trade Representative Katherine Tai Tuesday. It encouraged Tai to "move swiftly" on the commitment she made at her Senate Finance Committee confirmation hearing to install "a transparent, predictable, and rapid process for tariff exclusions.” Reforming the tariff exclusions process would be "very high on my radar" if confirmed, Tai told the committee (see 2102250043). Noting USTR has investigated the digital services taxes policies of several U.S. trade partners, the group asked the agency “to discourage further proliferation of such measures.” USTR didn't comment Wednesday, and ITI didn't answer our queries about whether it got a response from the agency. The Chinese tariffs are “there to be punitive,” rather than to stop China’s allegedly unfair trade practices, ITI CEO Jason Oxman told us in January (see 2011090043).

The FCC created docket 21-112 for filings on Verizon’s proposed buy of Tracfone from America Movil (see 2010070056). Parties have been filing to the International Bureau's ITC-T/C-20200930-00173.

Chinese 5G subscriptions are expected to reach 739 million by 2025, enough for 40% global share, reported ABI Research Tuesday. It forecasts 5G annual data traffic in China reaching 782 exabytes by 2025, for nearly 60% share of 5G. Unlike in other early adopter 5G countries like the U.S., Japan and South Korea, mobile network operators in China are government-owned, enabling them to get “extensive support” for developing networks, “especially in the consumer market," said analyst Jiancao Hou. The U.S-China trade war and Commerce Department export restrictions on Huawei and other Chinese vendors aren't "slowing down 5G deployment in China,” said Hou.