US FCC designates Huawei, ZTE as national security threats

Yolanda Curtis
July 1, 2020

The Federal Communication Commission has declared Chinese telecom giants Huawei and ZTE "national security threats", a move that will formally ban US telecom companies from using federal funds to buy and install Huawei and ZTE equipment. Huawei and ZTE have repeatedly rejected these claims.

The U.S. contends that Huawei's equipment could be used by China for spying. The fund is a collection of subsidies through which the U.S. government can promote access to telecom services.

"The Federal Communications Commission today took a major step in its ongoing efforts to protect US communications networks from security risks", the FCC said.

United States companies are forbidden from tapping into the FCC's $8.3 billion Universal Service Fund to purchase Huawei and ZTE goods and services under the ban, which was issued on Tuesday.

FCC chairman Ajit Pai said that the "weight of evidence" supported the decision.

"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 and ZTE were "initially designated" as security threats at the time, but the formal process of assigning them that status has taken place in the intervening months, resulting in today's declaration.

The agency framed the companies as agents of the Chinese government thanks to their close political ties, compulsion to cooperate with covert espionage operations under law, vulnerabilities in their networking equipment that could allow data to be directed to Beijing, and their transgressions on US trade sanctions against Iran and North Korea.

In May 2019, US President Donald Trump signed an executive order declaring a national emergency and barring US companies from using telecommunications equipment made by companies posing a national security risk.

In February 2020, Huawei and two of its U.S. subsidiaries were also charged by the U.S. Department of Justice with conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (RICO) and to steal trade secrets.

The FCC granted its approvals to the firms more than a decade ago.

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