The FCC wants to make it patently obvious that Huawei and ZTE are personas non grata in American telecom networks. The regulator has formally labeled Huawei and ZTE as “national security threats,” finally barring carriers from using their Universal Service Fund money to buy or maintain any products from the two Chinese companies. The move is partly symbolic when the US government’s blacklisting makes the hardware difficult to buy regardless, but it does further close a door that was very nearly shut.
“With today’s Orders, and based on the overwhelming weight of evidence, the Bureau has designated Huawei and ZTE as national security risks to America’s communications networks and to our 5G future,” FCC Chairman Ajit Pai said in a statement Tuesday. “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.”
By designating Huawei and ZTE as threats to US national security, the FCC bars telecommunications providers from using government subsidy money through the $8.3 billion Universal Service Fund to purchase equipment from the companies for their networks. The FCC voted unanimously to block telecoms from using federal funds to purchase equipment from Huawei last November, but the final order went into effect Tuesday.
Huawei and ZTE did not immediately respond to requests for comment. However, both companies have repeatedly denied that they are threats to US national security.
As with the FCC’s original order in November, the security threat label isn’t great news for smaller telecoms that bought Huawei or ZTE gear to save money and now face the prospect of replacing the hardware with offerings from other countries. The FCC hopes to reimburse those providers, but it’s still a pain if they built significant portions of their network with Chinese equipment.