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FCC targets Huawei, ZTE for Federal Subsidy Ban



Photo : Sean Gallup ( Getty Images ) [19659003] The Federal Communications Commission goes ahead with new restrictions on doing business with tech giants Huawei and ZTE, with board chairman Ajit Pai setting a Nov. 19 ballot for a proposal to prevent US companies from receiving federal subsidies from purchasing the Chinese companies telecommunications equipment.

According to the Wall Street Journal it would designate both companies as national security threats and effectively prevent them from participating in a $ 8.5 billion fund to expand rural environments. inter net access – the main market for both of the company's telecommunications operations. This can take effect within 30 days of a vote, but up to 120 days if any of the companies dispute it, an FCC source tells the Journal. In another escalation, the FCC is considering mandating US companies replace Huawei and ZTE equipment they already have installed (in line with Pai's argument that the equipment poses a major security risk ).

TechCrunch reported that the FCC is considering a program to reimburse transporters for equipment that had to be replaced. In a press release, the website reported, the FCC said that "a number of" smaller US carriers used the federal fund to purchase Huawei equipment, and that the draft order "should establish a process to designate other suppliers that pose a national security threat. "

A spokesman for the FCC denied to the Journal that the decision was motivated by the ongoing US-China trade war and instead by US intelligence agencies' repeated claims that Chinese technology companies could be vehicles for espionage (the CIA has reportedly claimed to anglophone members "Five Eyes" intelligence alliance that Huawei is at least partially supported by Chinese security services ). Huawei has strongly denied the allegations, although it faces further problems besides everything from a federal trade theft case to the status of chief economist Meng Wanzhou, who the United States says has broken sanctions on Iran and committed bank fraud. Meng is c who is now fighting extradition to the United States before the Canadian court .

Donald Trump's administration has already blacklisted Huawei and ZTE from the federal procurement process, which means US agencies cannot use their equipment. Huawei has also been subjected to further sanctions against its business which has effectively banned it from purchasing American technology ; one of the more difficult battles was when the consumer technology business was cut off from Google's Android ecosystem . The company recently reported on healthy sales growth despite the restrictions, probably frustrating US officials.


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