US telecom regulator designates China's Huawei, ZTE as 'national security threats'

The US telecommunications regulatorFederal Communications Commission(FCC) on Tuesday formally designated China'sHuawei Technologies Co and ZTE Corp as posing threats to USnational security.

Thedeclaration bars UStech firms from tapping an $8.3 billion Universal Service Fund to purchase equipment from the companies, effective immediately.

This fund was established in 1997 and is a programme that provides subsidies to companies while purchasing equipment and services for the maximisation of access to the telecom industry in a country.

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The UStelecommunicationsregulator had voted in November to issue the declaration and had proposed requiring rural carriers to remove and replace equipment from the two Chinese companies from existing USnetworks.

''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,''FCC Chairman Ajit Pai said in a statement Tuesday.

''We cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our critical communications infrastructure," he added.

Huawei and ZTE did not immediately respond to requests for comment but have previously sharply criticized the FCC's actions.

FCC Commissioner Geoffrey Starks said on Tuesday that "untrustworthy equipment" remains in place in USnetworks and said the USCongress must allocate funding for replacements.

In May 2019, US President Trump had signed an executive order declaring a national emergency and barring UScompanies fromusing telecommunications equipment made by companies posing a national security risk. The Trump administration had also added Huawei to its trade blacklist last year.

The FCC has taken an increasingly hard line against Chinese firms.In April, the FCC said it may shut down USoperations of three state-controlled Chinesetelecommunicationscompanies

The FCC required China Telecom Americas, China Unicom Americas, Pacific Networks Corp and its wholly-owned subsidiary ComNet (USA) LLC to explain why it should not start the process of revoking authorizations enabling their U.S. operations.

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

In May 2019, the FCC voted to deny another state-owned Chinesetelecommunicationscompany, China Mobile Ltd, the right to provide USservices, citing risks that the Chinese government coulduse the company to conduct espionage against the USgovernment.