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U.S. FCC votes to advance proposed ban on Huawei, ZTE equipment approvals

Credit: REUTERS/GONZALO FUENTES

The U.S. Federal Communications Commission voted unanimously on Thursday to advance a plan to ban approvals for equipment in U.S. telecommunications networks from Chinese companies deemed national security threats like Huawei and ZTE.

By David Shepardson

WASHINGTON, June 17 (Reuters) - The U.S. Federal Communications Commission voted unanimouslyon Thursday to advance a plan to ban approvals for equipment in U.S. telecommunications networks from Chinese companies deemed national security threats like Huawei HWT.UL and ZTE 000063.SZ.

Under proposed rules that won initial approval, the FCC could also revoke prior equipment authorizations issued to Chinese companies.

A Huawei spokesperson, in an email, called the FCC revision "misguided and unnecessarily punitive."

Acting FCC Chairwoman Jessica Rosenworcel said the new measures would "exclude untrustworthy equipment from our communications networks... We have left open opportunities for (Huawei and other Chinese equipment) use in the United States through our equipment authorization process. So here we propose to close that door."

FCC Commissioner Brendan Carr said the FCC has approved more than 3,000 applications from Huawei since 2018.

The FCC action would prohibit all future authorizations for communications equipment deemed to pose an unacceptable risk to national security.

In March, the FCC designated five Chinese companies as posing a threat to national security under a 2019 law aimed at protecting U.S. communications networks.

The affected companies included the previously designated Huawei and ZTE, as well as Hytera Communications Corp 002583.SZ, Hangzhou Hikvision Digital Technology Co 002415.SZ and Zhejiang Dahua Technology Co 002236.SZ.

Huawei said "blocking the purchase of equipment, based on a 'predictive judgment,' related to country of origin or brand is without merit, discriminatory and will do nothing to protect the integrity of U.S. communications networks or supply chains."

In August 2020, the U.S. government barred federal agencies from buying goods or services from any of the five Chinese companies.

In 2019, the United States placed Huawei, Hikvision and other firms on its economic blacklist.

Last year, the FCC designated Huawei and ZTE as national security threats to communications networks - a declaration that barred U.S. firms from tapping an $8.3 billion government fund to purchase equipment from the companies.

The FCC in December finalized rules requiring carriers with ZTE or Huawei equipment to "rip and replace" that equipment. It created a reimbursement program for that effort, and U.S. lawmakers in December approved $1.9 billion to fund it.

(Reporting by David Shepardson; Editing by Chizu Nomiyama and Dan Grebler)

((David.Shepardson@thomsonreuters.com; 2028988324;))

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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