FCC Formally Names Huawei, ZTE National Security Threats

The Federal Communications Commission has officially designated Huawei Technologies and ZTE, two Chinese telecommunication firms, as national security threats. Last year, the FCC voted to add both companies to the Entity List and barred them from using U.S.-manufactured semiconductors. Now, U.S. carriers cannot use the Universal Service Fund to purchase or maintain products from the two companies. The Fund, managed by the FCC, is an $8.3 billion government subsidy program to expand Internet access in rural and other underserved areas.

The New York Times reports that, also this week, “the United States blocked the export of high-tech products to Hong Kong a day before the Chinese government signed off on a new national security law that will crack down on dissent in the territory.”

FCC chair Ajit Pai stated that his agency “cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our critical communications infrastructure.” Although critics believe that the Chinese government could use Huawei and ZTE’s gear to spy, both companies have denied the charge; Huawei earlier said that the FCC’s belief is based on a “mistaken view of Chinese law.”

The FCC also said that it would “study how [U.S.] carriers could remove and replace existing Huawei and ZTE products in their networks,” a move that “is likely to affect rural carriers who rely on the subsidies to fund networks in areas where there are not enough customers to profitably build a network.” Chinese equipment is typically “cheaper than alternatives built by European companies.”

Although U.S. officials have tried to convince other governments to also avoid 5G products from Huawei and ZTE, “they have largely failed to turn the tide against the Chinese companies.”

CNBC reports Pai stated that, “with today’s Orders, and based on the overwhelming weight of evidence, the (FCC’s Public Safety and Homeland Security) Bureau has designated Huawei and ZTE as national security risks to America’s communications networks — and to our 5G future.” CNBC adds that, “countries like Australia and Japan have followed suit … [and] India is also reportedly weighing whether to bar Huawei amid broader geopolitical tensions with China.” The U.K., however, has given Huawei a “limited role in its 5G rollout.”

Pai’s belief that the two Chinese companies could spy for the country’s government is based on the fact that, “both companies have close ties to the Chinese Communist Party and China’s military apparatus, and both companies are broadly subject to Chinese law obligating them to cooperate with the country’s intelligence services.”

Huawei has responded that, “it would never hand data to Beijing,” but Pai remains unconvinced.

China Trades With U.S. Ally Japan as 5G War Gathers Speed, ETCentric, 7/1/20
U.S. Examines Ways to Compete in 5G, Japan Joins the Race, ETCentric, 6/29/20

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