October 31, 2019
The FCC introduced two measures that would prevent U.S. carriers from using technology from Chinese companies Huawei and ZTE. Both measures impact the Universal Service Fund, managed by the FCC, that provides subsidies to low-income households. The first would prohibit carriers from using money from the Fund to buy ZTE or Huawei equipment. The second, under-development measure would require carriers receiving money from the Fund to remove existing Huawei and ZTE gear, possibly in exchange for replacements.
Wired reports that FCC chair Ajit Pai said, “we need to make sure our networks won’t harm our national security, threaten our economic security, or undermine our values.” “The Chinese government has shown repeatedly that it is willing to go to extraordinary lengths to do just that,” he added.
AT&T, Verizon, Sprint and T-Mobile as well as cable Internet providers do not use Huawei equipment, according to Huawei executive Tim Danks, but “Huawei does have a number of smaller, mostly rural carriers as customers in the U.S.”
Huawei stated that the plan “only impacts the broadband providers in the most unserved or underserved rural areas of the United States,” and noted that it’s never had a “major security-related incident” in 30 years of operation in 170 countries. In Pennsylvania, Laurel Highland Total Communications chief executive Jim Kail said that “even with funds from the government, replacing Huawei gear would slow down the company’s efforts to deploy high-speed Internet to new and underserved areas because the company would have to pull staff from expansion efforts.”
He also worried that banning Huawei and ZTE gear would lead to higher prices. With regard to the two companies posing a national security risk, he noted that “we’ve had conversations with the FBI. No one’s been able to come back and say ‘here’s the proof’.”
Eastern Oregon Telecom chief executive Joseph Franell agreed. “All this gear was legally sold in the United States with full permission from the federal government,” he said. “Now we’re being told it’s not secure … how do I know what gear is going to be blessed as being secure?”
Last year, President Trump signed a defense spending bill “that banned federal agencies from buying gear from Huawei or ZTE, and from doing business with companies that use gear from the two companies.” Huawei filed suit against the U.S. government earlier this year. In its suit, “Huawei notes that other telecommunications gear and electronics from U.S. or European companies are made in China.”
The FCC proposals, which have bipartisan support, will be put to a vote on November 19.