Huawei and ZTE have officially been designated as threats to national security by USA’s Federal Communications Commission (FCC).
US-based companies will thus be restricted from benefiting from the Universal Service Program, an $8.3 billion government subsidy program should they be purchasing equipment or services from the two companies.
FCC Chairman, Ajit Pai, said in a statement, “With today’s Orders, and based on the overwhelming weight of evidence, the (FCC’s Public Safety and Homeland Security) Bureau has designated Huawei and ZTE as national security risks to America’s communications networks—and to our 5G future.”
This ruling formalizes the November 2019, FCC vote that first declared the two Chinese tech giants as potential national security risks.
The US has been lobbying other countries against allowing Huawei to set up its 5G networks in their territories. Japan and Australia have cut ties with Huawei.
India is also in limbo about the subject of banning Huawei in the midst of political tensions with China.
New Delhi has already directed state-run BSNL and MTNL to not source telecom equipment from Huawei and ZTE, and may soon extend this missive to players in the private sector telecom companies as well.
Countries like the United Kingdom have granted Huawei a minor role in their 5G rollout.
The running claims against ZTE and Huawei are that they could potentially use their networking equipment for espionage for the Chinese Communist Party.
Huawei has repeatedly denied any claims that it could hand over data to Beijing.
This has done nothing to shift suspicion from them. The FCC’s main concern is China’s national security law that compels any and all China-based companies to hand over data to the government should they be compelled to.
Ajit Pai added, “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.”
He continued in the statement, “We cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our critical communications infrastructure.”
In 2019, the US government accused Huawei of illegally accessing telecom networks but failed to provide sufficient evidence to prove this.
Huawei rejected those allegations stating that all the information they received was legally available to them.
The Chinese telco has been on the forefront of setting up 5G networks in various countries world-wide.