The Federal Communications Commission (FCC) has declared that Chinese companies Huawei and ZTE pose a “threat” to US communications networks. The reason why the FCC made this statement is linked to the fact that the two companies appear to have close contacts with the Chinese government and its military services. FCC Chairman Ajit Paisaid that the two Chinese telecommunications companies pose a risk to the future of 5G in America. Pai also added that the two companies are largely subject to Chinese law that requires them to cooperate with the agencies .
Under the terms, U.S. telecom companies cannot use the FCC’s $8.3 billion subsidy fund to buy any equipment from these two Chinese companies. This could affect rural network providers that rely on FCC subsidies and have purchased equipment from these Chinese companies in the past, as it can be cheaper than comparable equipment made by European companies such as Nokia and Ericsson.
In May, the FCC held a public hearing on how it could compensate carriers that chose to remove and replace existing products on their networks.
Pai said in a press release that the FCC will not allow the Chinese Communist Party to exploit vulnerabilities and compromise their critical communications infrastructure.
The FCC voted unanimously last year to block Chinese telecom equipment companies it saw as a threat from receiving money from the Universal Service Fund (USF), which is intended to expand internet to “underserved” areas of the country. The Trump has urged countries around the world not to use network equipment from Chinese manufacturers in their 5G wireless networks.
After pressure from Washington, the United Kingdom government said it would review its decision to allow Huawei to provide 5G technology in the country. Following the initial decision of the British government in February, Attorney General William Barr suggested the US consider acquiring a stake in European telecom equipment companies Nokia and Ericsson to reduce the “dominance” of Huawei.
Later in February, the U.S. Senate voted unanimously to pass a bill that would ban the purchase of telecommunications equipment from Chinese manufacturers such as Huawei and ZTE. The bill, which was signed into law by the President in March, also included $1 billion in funding to help rural telecommunications providers replace equipment from Chinese manufacturers.
