After months of rumblings from the Trump administration claiming the use of Chinese networking equipment posed a risk to the U.S., today the Federal Communications Commission officially designated both Huawei and ZTE as threats to national security.
In a statement released today, 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. 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.”
The statement from Pai follows a public notice issued by the Public Safety and Homeland Security Bureau announcing that “it has released orders issuing final designations of Huawei and ZTE, as well as their parents, affiliates, and subsidiaries, as companies posing a national security threat to the integrity of communications networks and the communications supply chain pursuant to 47 CFR § 54.9.”
The result of this decision, which goes into effect immediately, is that local telecommunications companies will be prohibited from using any money from the government’s $8.3 billion Universal Service Fund to purchase networking equipment from either Huawei or ZTE.
Currently, networking equipment from both companies is used in cell networks across the United States, particularly in many areas in the midwest and central U.S. However, last year, the FCC put a restriction on businesses from using the Universal Service Fund to purchase equipment from both Huawei and ZTE, with today’s announcement serving as final decision reinforcing that order.
In response to the FCC’s notice, in a statement provided to Gizmodo, Huawei said:
Huawei believes this order is unlawful as the FCC has singled out Huawei based on national security, but it provides no evidence that Huawei poses a security risk. Instead, the FCC simply assumes, based on a mistaken view of Chinese law, that Huawei might come under Chinese government control.
Huawei is an international leader in developing and adopting mechanisms to improve cybersecurity to protect the reliability of its equipment and the privacy of consumers. And Huawei has remained open to engaging with the U.S. government to verify productive solutions to safeguard U.S. telecommunications systems. Huawei would never breach its customers’ trust.
Gizmodo has also reached out to ZTE for comment but has yet to hear back.
For Huawei, the situation is especially dire, because after the U.S. placed Huawei on its Entity List last year, Huawei has been banned from purchasing tech made by U.S. companies for use in its devices, including components like processors and modems and software including Google Mobile Services.
[Update: 7/1/20 at 3:05 PM ET] Updated the story with an official statement from Huawei regarding the FCC’s recent decision to label Huawei as a threat to national security.