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

WASHINGTON, June 17 (Reuters) – 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 (HWT.UL) and ZTE (000063.SZ).

The vote drew opposition from Beijing.

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.

“The United States, without any evidence, still abuses national security and state power to suppress Chinese companies,” said Zhao Lijian, a spokesperson at China’s foreign ministry.

“Once again we urge the U.S. to stop stretching the concept of national security and stop politicising economic issues,” Zhao said at a regular media briefing in Beijing.

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.

A group of U.S. lawmakers including Democratic Senator Ed Markey and Republican Senator Marco Rubio praised the FCC action saying it mirrors the goals of bipartisan legislation. They said the FCC voted “to put national security first by keeping compromised Chinese equipment out of U.S. telecommunications 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 proposed a reimbursement program for that effort, and U.S. lawmakers in December approved $1.9 billion to fund it.

Rosenworcel said the FCC will vote in July to finalize the rules overseeing the reimbursement fund.Reporting by David Shepardson Editing by Chizu Nomiyama

Our Standards: The Thomson Reuters Trust Principles.

Source: https://www.reuters.com/technology/us-fcc-votes-launch-further-crackdown-huawei-zte-equipment-2021-06-17/