- The FCC has officially named Huawei and ZTE as national security threats.
- This will prevent US firms from using government funds to buy from either firm.
The Federal Communications Commission (FCC) officially deemed Huawei and ZTE national security threats. This will have huge implications for US companies looking to business with either of the firms going forward and will cause even greater difficulties for Huawei and ZTE as they look to expand around the world with their products.
Huawei and ZTE nation security threats
— The FCC (@FCC) June 30, 2020
In a statement that sums up the FCC’s stance on both Chinese companies, FCC Chairman Ajit Pai said, “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.” He continued on to say, “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.”
This news comes after the FCC voted unanimously to block telecoms from using federal funds to buy equipment from Huawei in November. Today’s announcement means the ban is officially going into effect. While there was a brief moment when the US eased up on its restrictions against the firms, those measures appeared to be temporary.
This news is also hot on the heels of US President Donald Trump extending the ban on Huawei for another year, which will make it even harder for the companies to do business in the US. The biggest implication of this official designation is that companies within the US cannot use the $8.3 billion given to them in the Universal Service Fund.
Both Huawei and ZTE have repeatedly denied that they are threats, but it’s clear the FCC isn’t taking them at their word.