The Federal Communications Commission (FCC), the US comms regulator, has barred telcos from using their universal service fund to purchase equipment or services from Huawei and ZTE, after designating both Chinese firms as threats to national security. This appears to be a step towards prohibiting all Huawei and ZTE equipment from being used in US networks.
An FCC press release stated:
This designation is the latest step that the FCC has taken to secure America’s communications networks from the threats posed by Communist China and bad actors that might do its bidding. Those efforts include prohibiting a company linked to Communist China from connecting to our communications networks, directing numerous other entities to show cause why their authority to remain connected to our networks should not be revoked, and launching a proceeding aimed at removing Huawei and ZTE gear from our communications networks.
FCC Chairman Ajit Pai highlighted the links between the businesses and China’s one-party government.
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. The Bureau also took into account the findings and actions of Congress, the Executive Branch, the intelligence community, our allies, and communications service providers in other countries. We cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our critical communications infrastructure. Today’s action will also protect the FCC’s Universal Service Fund—money that comes from fees paid by American consumers and businesses on their phone bills—from being used to underwrite these suppliers, which threaten our national security.
The FCC’s decision comes after it reviewed the ‘totality’ of evidence, including filings made by Huawei, ZTE and others. It may be a sign that Huawei believe they have lost the propaganda battle in the USA that their @HuaweiFacts Twitter account had not responded to the FCC’s decision at the time of writing, although it was apparently set up to forcefully counter criticism from the US authorities and other bodies. The account is currently littered with recent tweets about Huawei helping poor kids to obtain an education.
The detailed decision about Huawei captures the arguments that the Chinese manufacturer put forward in their defense.
…Huawei challenged the initial designation by arguing that the Commission relied on unsupported conclusions about Chinese law that ignored Huawei’s multiple expert submissions, that the Commission’s decision to “selectively” target Huawei was arbitrary and capricious, and that the designation was “infected” by unconstitutional congressional pressure and unconstitutional prejudgment against Huawei.
Huawei’s arguments were brushed aside in a judgment that identified the following reasons to consider Huawei a threat to national security.
- Huawei is highly susceptible to influence and coercion by the Chinese government, military, and intelligence community.
- The designation of Huawei as a threat to national security aligns with the findings and actions of various branches of US government, the US intelligence community, allied nations and telcos.
- Huawei equipment is known to have security vulnerabilities.
- The Secure and Trusted Communications Networks Act of 2019 demonstrates that both the legislative and executive branches of government have ongoing concerns about Huawei equipment.
Some of the same reasons were given for designating ZTE a threat to national security, but the FCC went even further by citing:
…ZTE’s history of breaking U.S. law and obstructing U.S. investigations…
Some will interpret this decision as mere politicking whilst the US and China position themselves for a potential trade war. However, telecommunications has both a strategic and military aspect that should not be underestimated. It is not an accident that Huawei’s political backers have ensured the Chinese firm has had the financial firepower to massively outspend rivals on research and development. With Chinese telcos having long been directed to purchase equipment from Chinese suppliers, this is a step towards the US government mirroring the practices of their rivals.