The US Federal Communications Commission (FCC) designated Huawei Technologies Co. and ZTE Corp. as national security threats, in a move to drive out the Chinese manufacturers from the US market.
According to the reports, the declaration by the FCC will now stop US firms from tapping into an $8.3 billion government fund to purchase equipment from these companies.
The US telecommunications regulator issued the declaration and proposed requiring rural carriers to remove and replace equipment from the two Chinese companies from existing US networks.
FCC chairman Ajit Pai said that the “weight of evidence” supported the decision. He added that the federal agencies and lawmakers have long claimed that because the tech giants are subject to Chinese law, they could be obligated to “cooperate with the country’s intelligence services,” Pai said.
“We cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our critical communications infrastructure,” the Republican-majority FCC said in a separate statement.
US says equipment from Huawei an ZTE can be used for spying
The FCC had kept an eye on the Chinese tech companies while the tensions mounted between China and the US over trade, the coronavirus pandemic and security issues. The FCC is considering banning these two Chinese telephone companies along with China Mobile Ltd, which was banned last year from entering the US market.
The United States contends that Huawei’s equipment could be used by China for spying. However, the company has repeatedly rejected that it poses any security risk and insists that it is independent of the Beijing government.
In November of last year, the FCC had announced that companies deemed a national security threat would be ineligible to receive any money from the Universal Service Fund. Huawei and ZTE were already “initially designated” as security threats at the time, but the formal process of assigning them that status has now been completed and the current declaration was made.
US administration had cut Huawei off from global chip suppliers
Earlier in May, the US administration had issued an order barring Huawei and its suppliers from using American technology and software.
The US administration had decided to block shipments of semiconductors to Huawei Technologies from major global chipmakers. The US Commerce Department had stated it was amending an export rule to “strategically target Huawei’s acquisition of semiconductors that are the direct product of certain US software and technology.”