WASHINGTON: The US Federal Communications Commission (FCC) voted 5-0 to designate China’s Huawei and ZTE as national security risks, barring their US rural carrier customers from tapping an $8.5 billion government fund to purchase equipment.
The US telecommunications regulator also voted to propose requiring those carriers to remove and replace equipment from Huawei Technologies Co Ltd and ZTE Corp from existing networks. The move could eliminate a key source of funding for Huawei’s biggest US business: telecoms equipment.
This is the latest in a series of actions by the US government aimed at barring American companies from purchasing Huawei and ZTE equipment. Huawei and ZTE will have 30 days to contest the designation and a final order compelling removal of equipment is not expected until next year at the earliest.
Huawei called the order “unlawful” and asked the FCC “to rethink its profoundly mistaken order.” It argued the FCC’s decision was based “on nothing more than irrational speculation and innuendo.”
In May, Trump signed a long-awaited executive order declaring a national emergency and barring US companies from using telecommunications equipment made by companies posing a national security risk. The Trump administration also added Huawei to its trade blacklist in May, citing national security concerns.
FCC Commissioner Geoffrey Starks, a Democrat, said it could cost as much as $2 billion to replace the equipment in US rural networks.
FCC Chairman Ajit Pai first proposed in March 2018 to bar companies that posed a national security risk from receiving funds from the FCC’s Universal Service Fund, but did not name Huawei or ZTE. The fund provides subsidies to provide service in rural or hard-to-reach areas, and to libraries and schools. — Reuters
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