, protect our companies and continue to do business and managers Cyber Security risk. Legal what is huaweis and business status in the u. S. Right now . Andy it is a moving target. We have a pending rule to an executive order. Right now we cant sell to the u. S. Government, cant sell to u. S. Contractors, and there is pressure for our smallcarrier customers, wireless and wireline customers, to rip out huawei gear. So there is legislation pending not would provide funds, adequate or providing sufficient time, that would give them money to rip out huawei equipment. So it is a difficult situation and although not official, the u. S. Government has blocked american carriers at t and verizon from selling their mobile devices. Peter why do you think that is . Andy it is a complicated matter. We have the geopolitical context of the u. S. And china, and the trade talks having exasperated things. At we also have a situation i think affects many of us in our everyday lives, were people dont want to hear or read anything that doesnt agree with their position. So we have a lot of false information out there, some of it expressed by u. S. Government officials and some provided by the u. S. Government to the media, but we cant meet with the u. S. Government. We dont have the opportunity to provide the fax. It is a challenging situation. Peter to help us deal with some issues that huawei and the u. S. Government are facing, john hindle of politico is our guest reporter. Having me,s for peter. Andy, i want to talk about the implications of huawei operations in the u. S. I think there are about 1500 employees for huawei here, but given the changes and he the company has gotten from the Trump Administration, fcc, congress, are those number is going to change into thousand 20 in 2020 . And your role, how is like want to shift as the government moves to block out the company . Andy we have been forced to downsize in the United States. We laid off about 600 people working in our r and d capabilities, primarily in Silicon Valley in california. And we cut down our staffs for our carrier business, Enterprise Business and our device business. But frankly, when you look at our global revenues and global growth, the United States from an income perspective is really not a very important factor for huawei, although it is the largest market in the world and we would love to have the chance to talk with the u. S. Government about doing business here john will you expect further cuts in 2020, do you have a sense of how that might change . Andy it is more likely than not that there will be additional got. The legislation that is pending that would provide funds to allow our 60 smaller customers to rip and replace huawei gear, that would mean we wouldnt be able to provide software and hardware updates to the technology and that would cause a decrease in revenue, a decrease in the workforce necessary to maintain the business prints of the headwinds are definitely measurable for us. Business. So they headwinds are definitely measurable for us. John you mentioned the trade war, we are into thousand 20, a president ial election year, has there been much discussion about whether a new administration might provide any sort of reset or opening to discuss these issues in a different way . I have found myself looking at the trade war and it is a signature issue of President Trump, he is seeking a second term, but with things potentially be different under a president biden, a president warren . How much is this tied specifically to President Trump in particular, do you think . Andy i think it is important to understand the geopolitical context. In that context exists regardless of which administration is in power. The u. S. Is quite concerned about china and the rise of China Economic and militarily economically and militarily, and there is some concern china wants to take over the world. So there is concern about, what is the american role with our allies . Maintaining the type of capability necessary to keep us safe . If china were to turn and become a kinetic warfare adversary, as we think of cyberspace, we are building a space command, as we think of cyberspace, the implications of a growing dependency by our country and others on the digitized economy and the 5g Internet Things and so forth, these are going to be increasingly dependent as a country and a world on those kinds of technologies. So that which really didnt matter so much since i left the white house over 15 years ago, are really going to matter. So the question is, how do we manage the risk to the United States regardless of who the suppliers are . It is something that is top of mind whether you are a democrat or a republican. One of the frustrating things to me is the fact that the government wont meet with us. There is a lot of information being communicated that is not based on facts. If the government is giving various publications or speaking publicly about things that are wrong, i can only imagine what they are saying to democratic and republican leaders. It is important, whether in our personal lives are government or geopolitics, to base things on facts and on data, and to be objective so we understand the risks and we can take steps necessary to address risk. but andy, every time we have had a member of congress or member of the administration on, democrat or republican, we asked if they would own a huawei phone, and the answer has been no they dont trust it, they have information that there is a backdoor and away for china to access that information. Commentu began your with a bot your comment is agreeing what agreeing with what i am saying, that democrats and republicans are worried about china. And it is really not about huawei, it is about the china government, and what the china government in their view could force huawei to do. For example, some Government People recently talked to some of our customers. The Government Officials thought huawei was giving away equipment free to customers. There are recent comments by a Government Official and an attorney publicly, comparing our founders offer to license our 5g technology, which means the u. S. Government could seek all the hardware and all the software, he likened it to elon musks tweet that got him in deep trouble with the fcc, calling his offer to license the 5g technology to america basically the equivalent of criminal fraud, which is objectively false. Another example of what has been said publicly is that we update our equipment with Software Updates from china. A Government Official said that. That is demonstrably false. And of course Government Officials dont hear this, because they are hearing one side of the story, they are not willing to listen to us or other major experts who say there are real cybersecurity risks in the world, and all the equipment, the carriers in the equipment providers, have to be subject to strict scrutiny and testing of products and conformance of measures, because bad guys can hack into everybodys products, particularly with a Global Supply chain deeply embedded in china. Those things are necessary to make sure america is safe Going Forward and that is where the discussion needs to get to, to the next level. In the wall street journal recently was this report, that a wall street journal review of credit facilities, tax breaks and other Financial Assistance details for the first time how aswei had access to as much 75 billion dollars in state support as it grew from a littleknown vendor of switches to the Worlds Largest telecom company. Saidn that article, it comparing 75 billion to 45 billion cisco is getting, so put this in perspective, and that is an instance where the u. S. Government provided dramatically inflated information to the wall street journal about the story. Way above the 75 million figure, 75 billion figure, and we should have a chance to say what is right or what is wrong. The biggest item in there is over 45 billion, and that is lower than what cisco is getting around the world for china and of chinese idea governmentbacked banks providing loans to customers, lines of credit. 45the question is, is that of the 75, is that the amount of customers money customers borrowed, they are alleging it is artificially low rates and giving unfair advantage to huawei, because our customers would have lowercost financing. But the fact is, very few customers use of the lines of credit, so i cant tell from the article whether the 45 billion is just theoretical lines of but only four or 5 billion of the 45 billion was actually used by customers to buy our products. And when you are looking at 150 billion in revenue, 4 billion to 5 billion in support is nothing. Lets talk about the facts, but when there isnt discussion and people are not even willing to think about or talk about the , blocki would suggest huawei if you must, but lets do the things necessary to make america and our allies safer, and that is the kind of thing we are recommending. John you talked about issues with the administration not being open to speaking with huawei. What does lobbying look like generally for the company at this point . I wonder if that resistance also extends to member of congress. The huaweiree is operation for lobbying changing into thousand 20 . Andy you are more of an expert on lobbying and how to affect Public Policy. Who makeur competitors significant Campaign Contributions to members of congress, we dont make such contributions and that can have an impact on the discussion. But there are some people on capitol hill that are willing to talk with us about some of the issues, and we are going to redouble our efforts to reach out to them to try to have some of these discussions about what the facts and evidence are and frankly, from my perspective, my focus is security and risk, what is necessary to make america safer with transparency. Mentioned you are working with 60 or so Smaller Companies right now. What have they been saying, given the administration and others have moved to push out influence, talking about even ripping and replacing the equipment. What is the message from them . Andy they provide substantial input to the federal communications commission, i believe last year and this year, i believe they provided input to the commerce department, in response to the executive order from last year. They told us about some of their discussions with the government where it is clear some of the folks in the government think we give away our equipment free, and some of our customers are telling the government they have particular measures they can use to help manage the risk, whether it is from huawei equipment, or nokia or ericsson. They said to the government that the efforts to rip and replace, which is pending legislation coming up this year, that the amount of money that has been discussed as he is not nearly enough, and it is going to take a lot more time and likely put some out of business. When you talkrdy, about rip and replace, how much huawei equipment is being used in the states right now . Andy i am not sure i can give a number. We have 60 smaller suppliers, about 40 at tier three, the smallest carriers for internet and wireless service. Rural40 of those are in america, underserved america, so it is smaller communities where schools and colleges and companies depend on our technology through these carriers to do business, but it is a relatively small amount of income. Continuee committed to to support those rural customers if we are allowed to do that. And while we had a Record Record and huawei had a year last year when it comes to revenues . Billion, up 18 . But it is important, that people are misunderstanding the data. Fromok a significant hit pressure from the u. S. Government blocking nearly 300 American Companies that we spent 11 billion on last year, over 45,000 american jobs depend on it. But despite that in the Third Quarter we were up 24 and at yearend we were only up 18 . For a large company, that is a lot. We have very substantial headwinds going into the year. The Global Environment is a challenge ofd the the competitive nature of the world and the change taking place will make the next year or two very very challenging for huawei. Peter and your rotating chairman in eight yearend message rights, the external environment is more complicated a yearend in message rights, the external environment is more complicated than ever in the u. S. Government will continue to suppress the leading technology, a challenging environment for huawei to survive. Andy we are in 170 countries. Every country has its own environment. Every country has carriers and mobile operators trying to figure out what to spend their money on. So as we talk about digitization, 5g, cloud, artificial intelligence, block chain, these things are going to make life better and create millions of jobs around the world, that the companies that are going to invest have to see the business case. There is a lot of decisionmaking in individual countries or when the world that is going to affect our opportunities to grow our revenue and serve our customers. Message the yearend peter referred to, it was said that survival would be our first priority. What would threaten the survival of huawei . The u. S. Marketplace is a smaller share, but that was a line that did jump out at me. How existential is this right now for huawei . Andy i think the challenge of how much we are going to grow and when is a real challenge. The situation with digitization around the world, in a competitive market people think, people buy our stuff because it is cheap. That is not true. We lose contracts every day, we lose them around the world and even lose them in china because china allows ericsson and nokia to compete against us. So we have to be going additive so we have to be competitive, improve our work as individuals and accompany and optimize our company, we have to get rid of dead wood, hold the front line more accountable and we are like any Major Company trying to meet the challenges of the world. Most American Companies cant buy from us, no question, and it is impacted by the fact we cant buy from google. So coming up with a huawei alternative to google is a major priority for the company, and it is difficult. It takes time, not just to create the technology, but you have got to tested and somethings really take time. You cant have nine women make a baby in one month, things take time and that is going to have an impact on our growth. Some of our growth in 2019 was based on momentum from the past. Momentum is gone and we are not going to get the kind of growth in early 2020 that we had in early 2019. Ann is there a timetable to alternative of what google provided at this point . Huawei has talked up its own efforts along those lines, but where is that internally right now . When it comes to what google specifically offered, where is that . Andy i honestly dont know the timeframe. I will be in china for annual meetings next week. I do know there is a lot of work with the App Developers who would provide apps for the platform, because that is a critical part of replacing, for our mobile devices, we sold about 240 million last year, creating a platform for the app. So you are not just creating the infrastructure, but you have to motivate the developers, give them what they need so they can be working in parallel. I dont know what the date is. It is a major commitment, and it is very difficult. John i want to turn to the recent fcc vote, voting that u. S. Telecom providers that receive subsidies, and since then the fcc has been sued by huawei over that vote. What led you to go to court and what are your feelings about the prospects there . Bit of a regulatory challenge through that, saying huawei could not challenge the determination that they are a threat. Why go to court, and what do you see happening next . Andy as a former federal prosecutor, i have some sense of how sensitive federal judges are to making comment on pending cases. So i want to be a little careful about what i say. Had to respond, and is part of a broader problem in our life. It if it werent for double standards, there wouldnt be standards at all. People want to read and listen to what they believe in. They dont care about evidenced or they want the other side to have evidence. I use the example of how President Trump looks at the democrats and impeachment. He sees them ignoring evidence, sees them violating the constitution, not following due process, not having a fair system. He looks at them as having the end justify the means, so we , fcc, what you have done is beyond the pale, it conflicts with constitut constitutional requirements of due process, the procedures act you are supposed to follow and conflicts with your own precedent, and that is wrong, and they are supposed to be an independent agency and they are going to carpet bomb huawei out of existence in the u. S. , and that is wrong. John do you think they havent been acting independently . You think they have absorbed the Administration Stance on that . Attorney general bill barr did write a long letter critical of huawei, he name checked several different items from the record, and said the fcc should proceed with this vote. Do you think their independence has been threatened in the context of huawei . Very loadeds a word, although an appropriate question. Ouri characterize what filing said about what they did, i think that answers your question. There are certain processes they are supposed to follow, and they clearly did not do that. John commissioner jeffrey starks, a democrat on the commission, has been a point person on supply chain issues, held a workshop, wrote a report, and try to step up in a certain way. Has there been any direct contact with huawei and commissioner starks on these issues . Andy not in the last year or so, not since the campaign against huawei ramped up in earnest. Peter andy purdy, when you hear backdoo