FCC: Huawei and ZTE Are National Security Threat

The Federal Communications Commission (FCC) has officially declared Chinese tech firms Huawei and ZTE national security risks, as part of its plans to remove the vendors’ equipment from US telecoms networks.

The FCC’s decision means that no carrier tapping the $8.5bn Universal Service Fund (USF), a government subsidy used mainly by smaller telcos often serving rural areas, can use the funds to purchase kit from the two Chinese firms.

“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,” said FCC chairman Ajit Pai. 

“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.”

The FCC first revealed its plan back in October 2019, stating at the time that under the proposals the USF would not be allowed to pay for firms deemed a national security risk. It also suggested that existing USF recipients would have to be audited to see how many have Huawei/ZTE kit in place and how much it would cost to remove and replace it.

In March this year, a new law freed up $1bn to help smaller telecoms firms rip-and-replace Huawei and ZTE equipment.

Huawei and others have long argued that such plans are self-defeating as they will set US innovation back and represent poor value-for-money for taxpayers and consumers alike.

However, Pai struck a defiant tone in his prepared comments yesterday.

"The Bureau also took into account the findings and actions of Congress, the executive branch, the intelligence community, our allies and communications service providers in other countries,” he said.

“We cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our critical communications infrastructure. Today’s action will also protect the FCC’s Universal Service Fund — money that comes from fees paid by American consumers and businesses on their phone bills — from being used to underwrite these suppliers, which threaten our national security.”

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