Chinese companies Huawei and ZTE Corp have been designated national security threats by the US Federal Communications Commission (FCC), citing the companies’ close ties with the Chinese Communist Party and the military.
The United States took a new step in this direction after the FCC’s ban in November 2019 on the use of universal service support to purchase equipment or services from companies posing a national security threat.
“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,” said FCC Chairman AjitPai.
“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.”
Both companies are at the forefront of the development of 5G technology, which has already been implemented by numerous carriers across the world. The US has long maintained that Huawei and ZTE are providing the Chinese government and military apparatus with backdoors that would let them intercept communications.
While both Chinese companies have denied any wrongdoing, Chinese law does state that companies have to assist in espionage activities. The designation of Huawei and ZTE as threats to national security will have immediate ramifications, as the money from the FCC’s $8.3 billion-a-year Universal Service Fund may no longer be used to purchase, obtain, maintain, improve, modify, or otherwise support any equipment or services produced or provided by these suppliers.
It’s still unclear how many US carriers have started to remove that technology from their infrastructure or how long it will take. It’s also unclear what they are going to use for replacements, although there are some alternatives to the Chinese-developed 5G technology.