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FCC Designates Huawei and ZTE as National Security Threats

The Federal Communications Commission on Tuesday designated the Chinese telecommunications firms Huawei and ZTE as national security threats, cutting them off from billions of dollars in federal broadband subsidies.

The agency voted unanimously last year to bar telecommunications manufacturers it deemed to be threats from receiving money meant to expand internet access to underserved areas, including rural America. The announcement on Tuesday was the final step in blocking Huawei and ZTE from the funds.

The Trump administration has been applying pressure on Chinese companies over security concerns. American officials have pushed countries around the world not to use Huawei’s networking equipment in their next-generation, or 5G, wireless networks.

On Monday, the United States blocked the export of high-tech products to Hong Kong a day before the Chinese government signed off on a new national security law that will crack down on dissent in the territory. Hong Kong has maintained a strong degree of autonomy since it ceased to be a British colony in the late 1990s, and American officials have said the new law will reduce its independence.

The F.C.C.’s decision on Tuesday is part of a campaign against Chinese firms that make the equipment underlying telecom networks.

Critics of the companies have long said that the Chinese government could go through the companies’ equipment to spy on traffic around the world or sabotage networks and the technologies they power.

Ajit Pai, the F.C.C. chairman, who was appointed to the role by President Trump, said in a statement that the agency “cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our critical communications infrastructure.”

The companies have long denied that their products pose a risk. Huawei said last year that the F.C.C. was relying on a “mistaken view of Chinese law” to conclude that the company could be forced under Chinese government control. Huawei and ZTE did not immediately respond to requests for comment on the F.C.C. decision on Tuesday.

American authorities have sought to make that case to governments around the world, although they have largely failed to turn the tide against the Chinese companies.

The companies’ new designation means that American internet providers will no longer be able to use money provided by the federal government to expand broadband access using Huawei and ZTE equipment. The agency has said it will study how carriers could remove and replace existing Huawei and ZTE products in their networks.

That is likely to affect rural carriers who rely on the subsidies to fund networks in areas where there are not enough customers to profitably build a network. Those carriers have in some cases used the Chinese equipment, which can be cheaper than alternatives built by European companies.

The New York Times

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