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Huawei files appeal in U.S. court against FCC's rural carrier purchase ban

Credit: REUTERS/Jason Lee

China's Huawei has mounted a legal challenge against the U.S. Federal Communications Commission (FCC) after the body designated the technology giant as a security threat and tried to bar it from a government subsidy program.

By David Kirton

SHENZHEN, China, Dec 5 (Reuters) - China's Huawei has mounted a legal challenge against the U.S. Federal Communications Commission (FCC) after the body designated the technology giant as a security threat and tried to bar it from a government subsidy program.

The FCC last month voted unanimously to designate Huawei Technologies Co Ltd HWT.UL and peer ZTE Corp 000063.SZ as national security risks, barring their U.S. rural carrier customers from tapping an $8.5 billion government fund to purchase Huawei or ZTE telecommunications equipment.

Huawei filed a petition with the Fifth Circuit Court in New Orleans challenging the FCC decision, the firm's chief legal officer Song Liuping said in a statement on Thursday.

The FCC argued the companies' ties to China's government and military apparatus, and Chinese laws requiring that such companies assist the Chinese government with intelligence activities, pose a U.S. national security risk.

It also voted to propose requiring carriers remove and replace equipment from Huawei and ZTE in existing networks.

"Banning a company like Huawei, just because we started in China - this does not solve cyber security challenges," Song said in the statement.

Karl Song, vice president of Huawei's corporate communications department, said the FCC rule threatened improving connectivity in rural America, and would cost hundreds of millions of dollars and even force some small carriers to go bankrupt.

U.S. President Trump in May placed Huawei on the country's trade blacklist, citing national security concerns, which banned companies from supplying Huawei with U.S. components without special licenses.

The U.S. government has also lobbied other governments to ban Huawei equipment, ratcheting up tension between China and the United States as they engage in a tit-for-tat trade war.

U.S. agency votes 5-0 to bar China's Huawei, ZTE from govt subsidy program

(Reporting by David Kirton; Writing by Brenda Goh; Editing by Christopher Cushing)

((brenda.goh@thomsonreuters.com; +86 (0) 21 6104 1763; Reuters Messaging: brenda.goh.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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