Mobile network phone masts are visible in front of St Paul's Cathedral in the City of London, Tuesday, Jan. 28, 2020. The Chinese tech firm Huawei has been designated a "high-risk vendor" but will be given the opportunity to build non-core elements of Britain's 5G network, the government has announced. The company will be banned from the "core", of the 5G network, and from operating at sensitive sites such as nuclear and military facilities, and its share of the market will be capped at 35%. (AP Photo/Alastair Grant)

OTTAWA - Britain is granting Huawei partial access to its next-generation wireless network, but it still considers the Chinese telecom company a security risk that requires special attention, U.K. government officials said Tuesday.

The British decision had phone lines burning between London and Ottawa because Canada is now the last of the "Five Eyes" intelligence allies to decide the companies that will provide the equipment for its 5G network.

Upgraded wireless technology is expected to provide much faster data transfers for numerous purposes, from smart phones to autonomous vehicles to remote medical care. But only a handful of companies make the equipment needed to operate those next-generation networks, and the question is whether western allies that share top-secret data and worry about their citizens' security are willing to let a Chinese company supply theirs.

The United States, Australia and New Zealand have all said no. Britain's decision to allow Huawei partial access to its 5G industry changes the landscape.

The Trudeau government said it was studying the British decision but gave no indication about whether its long-awaited decision is coming soon. Its decision is complicated by China's imprisonment of two Canadians, Michael Kovrig and Michael Spavor, who were arbitrarily detained on spying charges more than a year ago.

That came after Canada arrested Huawei executive Meng Wanzhou on a U.S. extradition warrant.

Britain said Tuesday it would attempt to limit "high-risk" vendors' access to the new upgraded network — coded language for Huawei, which it did not directly name — to 35 per cent of its less sensitive parts.

But U.K. officials, who briefed The Canadian Press on the condition of anonymity because of the sensitivity of the situation, made clear that regulating Huawei was the intent. They had no comment on what Canada ought to do, but said Huawei is being treated carefully, not like an ordinary British company.

Huawei Canada says firmly that it is a Canadian entity, entirely independent of Beijing's influence.

"It is important to remember that in our 10 years of operation in Canada, there has never been a security incident or a lapse of any sort. Not one," Alykhan Velshi, a company vice-president, said in a statement. He noted the company employs more than 1,200 Canadians.

The statement urged Canada to make its own independent decision, "based on technology and security, not politics" or pressure from the U.S. government under President Donald Trump.

Like Britain, Canada has been under pressure from the United States to ban Huawei, which deems the Chinese tech giant to be a national security threat — a charge the company denies.

A former Canadian envoy to China said Britain's decision gives the Trudeau government an "easy out" to make the same choice.

David Mulroney said that would be a bad decision that would amount to caving in to more than a year of bullying from Beijing.

"This is just the latest, albeit one of the most consequential, in a series of bad decisions and false compromises that western governments have made in respect to China," said Mulroney, who was the Canadian ambassador to China from 2009 to 2012.

"The result is that Chinese technology, and with its potential Chinese influence, is embedded ever more deeply in the governance structures of the West."

The Trump administration has said that China's 2017 national intelligence law, which requires Chinese entities to co-operate with state security agencies, means communist leaders could force Huawei to conduct cyberespionage on behalf of the country's government.

Britain agrees with that characterization, but because there are not enough companies to serve the country's 5G needs, it has opted to allow Huawei to participate, the U.K. officials said.

The officials stressed that Britain would like to see the Huawei footprint diminish over time because new companies enter the market.

Alan Woodward, a British cybersecurity expert at the University of Surrey, said there is no such thing as "a zero-risk solution" for Canada or the U.K.

"We have limited indigenous telecommunications manufacturers who can supply 5G," he said. "The bottom line is that the market is broken. We need more suppliers."

While Canada will take Britain's decision into consideration, Public Safety Minister Bill Blair stressed that there are "a number of very significant, important considerations unique to the Canadian environment." He declined to specify what those are.

Asked if the fate of the two jailed Canadians is a consideration in deciding whether Huawei should be involved in the development of Canada's 5G network, Blair said: "I will tell you I think it's very important that we get the two Michaels back but it's not directly tied to that."

The Liberal government has said the safety and security of Canadians is its top concern, a talking point Industry Minister Navdeep Bains reiterated without offering any timeline on when the government will decide.

"They (Britain) are an ally; we're engaged with them," Bains said. "So, of course, we're looking at what decisions they've made and how they plan to implement those decisions."

Ottawa is carrying out a review of 5G that involves Public Safety Canada; the Canadian Security Intelligence Service; the Communications Security Establishment; Global Affairs; and Innovation, Science and Economic Development.

Canada faces the exact same set of calculations that Britain did around economic impact, geopolitics and security, said Wesley Wark, a security expert and visiting professor at the University of Ottawa who has followed the issue closely.

"My hope is that in Canada, as in the U.K., the government will listen to its security professionals and adopt a made-in-Canada version of a risk-mitigation strategy, avoiding the imposition of a ban on Huawei."

The government's decision will in part depend on what happens next with the U.S. pressure campaign against allies, he said.

This report by The Canadian Press was first published Jan. 28, 2020.

— With files from Jim Bronskill and Joan Bryden

News from © The Canadian Press, 2020