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

WION Web Team Washington, United States Jul 01, 2020, 10.43 AM(IST)

The Huawei logo is seen on a communications device in London, Britain Photograph:( Reuters )

Story highlights

The declaration made by FCC bars US tech firms from tapping an $8.3 billion Universal Service fund to purchase equipment from the companies, effective immediately.

The US telecommunications regulator Federal Communications Commission(FCC) on Tuesday formally designated China's Huawei Technologies Co and ZTE Corp as posing threats to US national security.

The declaration bars US tech 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 US telecommunications regulator 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 US networks.

''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.

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''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 US networks and said the US Congress must allocate funding for replacements.

In May 2019, US President Trump had signed an executive order declaring a national emergency and barring US companies from using 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 US operations of three state-controlled Chinese telecommunications companies

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 Chinese telecommunications company, China Mobile Ltd, the right to provide US services, citing risks that the Chinese government could use the company to conduct espionage against the US government.