The Federal Communications Commission has officially designated Chinese telecommunications companies Huawei and ZTE as threats to U.S. communications networks, claiming the companies have close ties to the Chinese government and its military services.
In a statement, FCC Chairman Ajit Pai noted that the two telecom equipment makers posed a risk to America’s 5G future “based on the overwhelming weight of evidence.”
Pai added that both companies are “broadly subject to Chinese law obligating them to cooperate with the country’s intelligence services.”As a result of the order, U.S. telecom companies cannot use the FCC’s $8.3 billion subsidy fund to purchase any equipment made by the two companies.
The move is likely to affect rural network providers who rely on the FCC’s subsidies and have purchased equipment from the Chinese makers in the past, as it can be cheaper than ones built by European companies like Ericsson and Nokia.
In May, the agency had invited public comments on how it could reimburse carriers who chose to remove and replace existing Huawei and ZTE products in their networks.
“We cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our critical communications infrastructure,” FCC Chairman Pai said in a press release.
The FCC had voted unanimously last year to prevent telecom equipment makers it deemed to be threats from receiving money from its Universal Service Fund, which is earmarked for expanding internet access to underserved regions of the country. The Trump administration has pushed countries around the world to not use network equipment from Chinese manufacturers in their next-generation 5G wireless networks. Following pressure from Washington, the U.K. government on Tuesday indicated that it would reconsider its decision to allow Huawei to supply 5G technology to the country.
Following the U.K. government’s initial decision in February, Attorney General William Barr had suggested that the U.S. should consider acquiring a controlling stake in European telecom equipment makers Nokia and Ericsson to “blunt” Huawei’s “drive to domination.” Later in February, the U.S. Senate had voted unanimously to pass a bill that banned the purchase of telecom equipment from Chinese manufactures like Huawei and ZTE. The bill, which was signed and enacted by the President in March, also included $1 billion in funding to help rural telecom providers “rip and replace” existing equipment from the Chinese manufacturers.
I am a Breaking News Reporter at Forbes, with a focus on covering important daily news stories, tech policy and digital media platforms. Graduated from Columbia University with an MA in Business and Economics Journalism in 2019. Worked as a journalist in New Delhi, India from 2014 to 2018. Have a news tip? DMs are open on Twitter @SiladityaRay.