Huawei and ZTE are threats to U.S. national security, says the FCC, the U.S. Federal Communications Commission. According to the agency, the two Chinese manufacturers are indeed likely to share sensitive information with Beijing. This is the first time an official entity has agreed with the Trump administration.
Since May 2019, Huawei and ZTE have been excluded from the U.S. market. Despite several reprieve, the two firms cannot trade with companies located on U.S. soil. Against the backdrop of a trade war, Donald Trump openly accuses both groups of working for the Chinese government and collecting sensitive data for Beijing's secret services. So far, no official entity has confirmed or endorsed the accusations made by the Republican president.
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What are the implications of the FCC's decision for Huawei and ZTE?
On June 30, the FCC officially designated Huawei and ZTE as "threats to national security" of the United States. "Based on overwhelming evidence, the office considers Huawei and ZTE to be risks to the national security of U.S. communications networks – and to the future of 5G," Ajit Pai, the current FCC chairman, told The Verge.
To justify its decision, the agency highlights the manufacturers' links with the Chinese authorities. "The two companies have close ties to the Chinese Communist Party and the Chinese military apparatus, they are largely subject to Chinese law requiring them to cooperate with the country's intelligence services," the official said. The arguments put forward by the FCC are the same as those of the Trump administration for several months.
As a reminder, a law enacted in 2017 legally obliges companies based in China to collaborate with the country's intelligence services. So far, Huawei and ZTE have strongly denied all accusations of espionage. Ren Zhengfei, founder of Huawei, assures that the Chinese authorities do not interfere with the activities of the companies on its soil. According to Huawei, Chinese law does not require the manufacturer to spy on foreign countries on behalf of the government.
In practical terms, the FCC's decision will prevent U.S. telecommunications companies from investing in equipment designed by Huawei and ZTE based on government subsidies. With an annual budget of $8.5 billion, the Universal Service Fund allows operators to improve their facilities every year. This is a further blow, both for ZTE and Huawei but also for the many American operators, especially rural ones, who rely on their equipment.
In addition, the FCC is asking U.S. operators to replace all network equipment provided by Huawei or ZTE that is already installed in the United States. "We cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our infrastructure," argues Ajit Pai. For the time being, the two groups have not yet responded to the FCC sanction.
Source: The Verge