US classifies China's Huawei, ZTE as security threats, blocks funding

WASHINGTON • The US Federal Communications Commission (FCC) on Tuesday designated Chinese telecommunications firms Huawei and ZTE as national security threats, cutting them off from billions of dollars in federal broadband subsidies.

The agency voted unanimously last year to bar telecommunications manufacturers it deemed to be threats from receiving money meant to expand Internet access to underserved areas, including rural America. The announcement on Tuesday was the final step in blocking Huawei and ZTE from the American funds.

The Trump administration has been applying pressure on Chinese companies over security concerns. US officials have pushed countries around the world not to use Huawei's networking equipment in their next-generation, or 5G, wireless networks.

The FCC has increasingly scrutinised Chinese companies as tensions grow between Beijing and Washington over trade, the coronavirus and security issues. The agency is considering banning three Chinese telephone companies, and last year barred China Mobile from entering the US market.

On Monday, the United States blocked the export of high-tech products to Hong Kong a day before the Chinese government signed off on a new national security law that will crack down on dissent in the territory.

The FCC's decision on Tuesday is part of a campaign against Chinese firms that make the equipment underlying telecom networks.

Critics of those companies have long said that the Chinese government could go through the companies' equipment to spy on traffic around the world or sabotage networks and the technologies they power.

Mr Ajit Pai, the FCC chairman, who was appointed to the role by President Donald Trump, said in a statement that the agency "cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our critical communications infrastructure".

The companies have long denied their products pose a risk.

Huawei said last year that the FCC was relying on a "mistaken view of Chinese law" to conclude that the company could be forced under Chinese government control.

Huawei and ZTE did not immediately respond to requests for comment on Tuesday.

The US authorities have sought to make that case to governments around the world, although they have largely failed to turn the tide against the Chinese companies.

The new designation means that American Internet providers will no longer be able to use money provided by the federal government to expand broadband access using Huawei and ZTE equipment.


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A version of this article appeared in the print edition of The Straits Times on July 02, 2020, with the headline US classifies China's Huawei, ZTE as security threats, blocks funding. Subscribe