Ending a more than 7 month-long process, the U.S. Federal Communications Commission (FCC) has formally designated China telecom companies Huawei Technologies and ZTE Corporation as “covered companies” under the agency’s ban on the use of federal funds to purchase equipment or services from companies posing a threat to U.S. national security.
Under separate Orders issued in late June by the FCC’s Public Safety and Homeland Security Bureau, money from the FCC’s $8.3 billion Universal Service Fund (USF) can no longer be used to purchase, obtain, maintain, improve, modify or otherwise support any equipment or services produced or provided by either Huawei or ZTE.
“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,” noted FCC Chair Ajit Pai in a statement issued in support of the Orders. “We cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our critical communications infrastructure.”
The FCC’s Orders in connection with Huawei and ZTE have immediate effect.
The FCC’s latest action against the companies concludes a process than begin in November 2019, when the agency issued a Report and Order banning the use of USF monies in connection with the purchase or use of telecommunications equipment from companies that pose a national security threat. In that Report and Order, the Commission initially designated Huawei and ZTE as covered companies under the scope of the ban.