On Tuesday, the Federal Communications Commission formally designated Huawei and ZTE as threats to national security, meaning that telecommunications can no longer use the FCC’s Universal Service Fund to buy equipment or services from Chinese companies.
In November, the FCC implemented a rule that prohibits money from the fund from going to providers deemed a threat to national security. At the time, he recommended that the designation apply to Huawei and ZTE. The USF provides more than $ 8.5 billion a year in grants to help telecommunications companies provide adequate broadband to rural Americans who currently lack access.
In a statement Tuesday, FCC President Ajit Pai said the appointment is “based on the overwhelming weight of the evidence.”
“Both companies have close ties to the Chinese Communist Party and the Chinese military apparatus, and both companies are widely subject to Chinese law that requires them to cooperate with the country’s intelligence services,” he said. “We cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our critical communications infrastructure.”
The agency also considered recent actions by Congress, the executive branch, the intelligence community, U.S. allies, and communications service providers in other countries. Last year, when the Trump administration increased its stance against China, the US Department of Commerce added Huawei to its “List of Entities,” prohibiting US companies from transferring technology to Huawei without a special license from the US government. USA
Then, in March of this year, Trump signed legislation that prohibits American companies from using federal funds to buy equipment from companies that are considered threats to national security. The law also established a $ 1 billion rebate program to help smaller vendors with the cost of removing and replacing prohibited equipment from Huawei and ZTE.
Other countries like Australia, New Zealand, Japan, and Taiwan have also effectively banned Huawei.
