Tuesday, 04 August 2020

FCC lists Huawei and ZTE as security threats, cuts access to govt subsidies

by Harry Baldock, Total Telecom
Wednesday 01 July 20

The latest flare in the US–China trade war could have huge ramifications for Huawei, perhaps even jeopardising their position in UK 5G networks

The Federal Communications Commission (FCC) has announced the latest in a long string of sanctions against Chinese companies Huawei and ZTE, this time officially labelling them security threats.   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&rsquo…

The Federal Communications Commission (FCC) has announced the latest in a long string of sanctions against Chinese companies Huawei and ZTE, this time officially labelling them security threats.
 
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 Ajit Pai. “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 new designation will bar US companies from using government subsidies to purchase equipment from the Chinese tech giants. Currently, the US Universal Service Fund, overseen by the FCC, provides domestic companies with $8.3 billion in government funding to help deliver services to underserved areas of the country, all of which will now be off limits to the Chinese companies.
 
The order itself has been a long time coming: the FCC voted unanimously to restrict telcos from using government funds to purchase Huawei equipment back in November, but the order only came into effect yesterday.
 
ZTE and Huawei have both repeatedly argued that they are independent businesses, not subject to the whims of the Chinese government.
 
As the geopolitical clash between the US and China rages on, tensions are also picking up in other parts of the world. A clash between Chinese and Indian troops in a disputed region of the Himalayas that resulted in the deaths of over 20 soldiers has seen India quickly ban 59 Chinese apps on security grounds; meanwhile, the new draconian laws China is introducing in Hong Kong have further increased tensions with the UK. 
 
With the UK already on the fence about Huawei’s future role in the country’s 5G networks, the latest move by the US may be enough to tip the balance and see Huawei squeezed out of UK infrastructure. 
 
Speaking just yesterday, UK PM Boris Johnson described Huawei as a ‘hostile state vendor’ and said security was a key concern for UK infrastructure.
 
 
Geopolitics is having a huge impact on the telecoms supply chain around the world. How would further restrictions shake up the ecosystem? Find out in Total Telecom's latest webinar. Register now
 
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