Huawei sues the FCC over subsidy ban on its telecom equipment

Andrew Cummings
December 5, 2019

The move came after Washington brought criminal charges against Huawei, alleging theft of trade secrets, bank fraud and violation of United States sanctions against Iran.

Pai has "tried to spread fear about Huawei" by "us [ing] words like "backdoors" to scare people".

The FCC last month voted unanimously to designate Huawei and ZTE Corp, another Chinese telcommunication equipment company, as national security risks, and barred their U.S. customers from tapping an $8.5bn government fund to purchase Huawei or ZTE telecommunications equipment.

Huawei said it filed the complaint in the US Court of Appeals for the Fifth Circuit. It also claims that the FCC singled out Huawei and ZTE but "never articulated or applied any consistent standard", which allowed it to "unfairly discriminate against [these] companies".

"Banning a company like Huawei, just because we started in China - this does not solve cyber security challenges", Huawei's Chief Legal Officer Song Liuping said at a news conference at the firm's headquarters in Shenzhen.

Song noted that Huawei is willing to work together with the US government on the matter.

In its new motion, Huawei argued that the ban violates due process and the constitution, and also goes beyond the FCC's statutory authority.

This is the second such lawsuit from Huawei in the USA after it first challenged the ban on the sale of its products to federal agencies back in March.

At the North Atlantic Treaty Organisation summit in the UK on Wednesday, UK Prime Minister Boris Johnson said the decision on whether to allow Huawei a role in building Britain's 5G networks would be based on ensuring continued co-operation with the U.S. over intelligence sharing. "Congress put enormous pressure on the FCC to take some action". It is not clear when the FCC decision will come into effect. "And they weren't going to let a lot of stubborn facts get in their way".

FCC spokesman Brian Hart declined to comment. But analysts cautioned that while the latest lawsuit might succeed in delaying implementation of the FCC decision, it was unlikely to win the company friends in Washington or elsewhere.

The Chinese telecom giant claims the move is in violation of the USA constitution, and is politically motivated.

What is Huawei trying to overrule?

"This delay, while the court hears the case, might buy Huawei some time".

Huawei's chief financial officer, Meng Wanzhou, who is also Ren's daughter, was arrested in Canada a year ago and is now fighting extradition to the United States on fraud and conspiracy charges tied to USA sanctions. Claiming the move is unlawful, Huawei filed a lawsuit in Texas federal court in March. That case is still being deliberated.

The Huawei document was not yet available in the US court filing system. On Wednesday, the agency's chairman said he will propose $9bn in funding over the next decade to boost fifth-generation (5G) wireless telecommunications coverage in rural USA areas.

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