US Federal Communications Commission to vote to bar China’s Huawei and ZTE from US$8.5 billion government subsidy programme

Telecoms regulator also plans to propose requiring US rural carriers to remove and replace equipment from designated companies

Trump says US will cooperate with ‘like-minded nations’ to promote security in next-generation 5G networks

2-MIN READ2-MIN

Published: 2:34am, 29 Oct 2019Updated: 5:15am, 29 Oct 2019

The US Federal Communications Commission (FCC) plans to vote in November to designate Huawei Technologies and ZTE Corp as posing national security risks and to bar the use of funds from an US$8.5 billion government programme to purchase equipment or services from those companies, officials said on Monday.

The US telecommunications regulator also plans to propose requiring US rural carriers to remove and replace equipment from designated companies. It intends to ask carriers how much it would cost to remove and replace Huawei and ZTE from existing networks and to establish a reimbursement programme to offset the costs of removing the equipment.

This is the latest in a series of actions by the US government aimed at barring US companies from purchasing Huawei and ZTE equipment. Huawei and ZTE would have 30 days to contest the FCC’s national security risk designation, the officials said.

FCC Chairman Ajit Pai first proposed in March 2018 barring companies that posed a national security risk from receiving funds from the FCC’s Universal Service Fund, but did not name Huawei or ZTE. The fund provides subsidies to provide service in rural or hard-to-reach areas, and to libraries and schools.

The FCC will argue that the companies’ ties to the Chinese government and military apparatus and Chinese laws requiring that such companies assist Beijing with intelligence activities pose a US national security risk.

Congress has been considering legislation to authorise up to US$1 billion for small and rural wireless providers to replace network equipment from the Chinese companies.