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Nokia suspended its work in a notable industry group because of fears that it could be liable for US penalties for working with blacklisted Chinese firms.

Nokia informed a group called O-RAN Alliance that it has no choice but to suspend all technical work activities in the group due to a compliance-related matter regarding the O-RAN contributors in the US entity list.

The O-RAN Alliance is the foremost industry group developing a new concept in 5G called Open Radio Access Network to allow smaller companies to compete for contracts on specialized services, software, and kit in 5G.

The quest for Open RAN

The biggest telecom operators in Europe advocate for open RAN as it would break the market power held by Nokia, Ericsson, and, if allowed by concerned governments, Huawei. However, the O-RAN Alliance has three Chinese firms that have been put on a blacklist by the US.

Washington claims they pose a national security threat for having close ties to the Chinese military. They include Inspur, Phytium, and Kindroid. The US entity list has Kindroid (chips) and Phytium (supercomputing) in the same category as Huawei and other Chinese firms, preventing companies from doing business with them except with specific licenses.

When the White House says ‘no’

The O-RAN did not respond to request for comment. A similar legal issue came up in May 2019, when the US imposed restrictions on firms working with Huawei. Then, the White House issued licenses that allowed companies to be on the same groups, notably GSMA and standard-setting entities like ISO, ETSI, and ITU, as Huawei, without violating the entity list rules. However, there are no exemptions of that nature for the O-RAN firms. As such, Nokia cannot risk getting punished for consorting with them.