Huawei is looking to overturn a ruling by the U.S. Federal Communications Commission (FCC) that bars a government fund from being used to buy equipment from the Chinese telecommunications giant.
Last month, the FCC banned the use of the $8.5 billion a year Universal Service Fund (USF) to purchase equipment and services from companies that pose a national security threat. The regulator designated Huawei and ZTE as companies covered by this rule.
Huawei was deemed a threat under Trump, whose administration used a variety of methods to sever its ties to US businesses. Federal agencies argued that Huawei equipment posed an inexcusable security risk, citing possible backdoors that would let the company spy on Americans. Huawei has denied the allegations.
In 2019, the FCC voted to bar using federal funds to buy its products, preventing American companies from rolling out wireless networks with Huawei equipment. That order took effect in June of last year, despite a legal challenge from Huawei. The FCC went further in December, voting to make companies replace existing Huawei equipment.
When the FCC made the ruling in November, it claimed both Huawei and ZTE have “close ties to the Chinese government and military apparatus and are subject to Chinese laws requiring them to assist with espionage.” It was referencing laws that apparently compel Chinese firms to hand over data to Beijing when asked.
“The designation is based on a fundamental misunderstanding of Chinese law and on unsound, unreliable, and inadmissible accusations and innuendo, not evidence,” Nager said. “The designation is simply shameful prejudgment of the worst kind.”
