US FCC Classifies Huawei and ZTE as Security Threats, Cuts off Funding

US FCC has classified Huawei and ZTE as security threats, and banned them as suppliers for projects under its Universal Service Fund, because of alleged ties to Chinese military and intelligence services. The Federal Communications Commission is the US agency that regulates all communications technology. In a news release explaining the decision, the FCC said that this is a step to protect US networks fro security risks. The two companies have been banned as suppliers under the FCC's Universal Service Fund. The fund is a collection of subsidies through which the US government can promote access to telecom services.

In the release, the FCC stated: “As a result of today's action, money from the FCC's $8.3 billion (approximately Rs. 62,676 crore) a year Universal Service Fund may no longer be used to purchase, obtain, maintain, improve, modify, or otherwise support any equipment or services produced or provided by these suppliers.“

“With today's Orders, and based on the overwhelming weight of evidence, the Bureau has designated Huawei and ZTE as national security risks to America's communications networks—and to our 5G future,” FCC Chairman Ajit Pai said in the release. “Both companies have close ties to the Chinese Communist Party and China's military apparatus, and both companies are broadly subject to Chinese law obligating them to cooperate with the country's intelligence services.”

“The Bureau also took into account the findings and actions of Congress, the Executive Branch, the intelligence community, our allies, and communications service providers in other countries. We cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our critical communications infrastructure,” he added.

This comes just a day after the Indian government issued an order banning 59 apps from China, including TikTok, for reasons of national security, However, the government has taken no action against Chinese hardware providers at this point.

In a series of tweets, US FCC Chairman Ajit Pai noted that the two companies have been designated as a security threat, and added that the decision was made with input from “Congress, Executive Branch, intelligence community, allies, and communications service providers.” He concluded by saying, “With this decision, we are sending a clear message: the U.S. Government, and this FCC in particular, cannot and will not allow the Chinese Communist Party to exploit vulnerabilities in U.S. communications networks and compromise our critical communications infrastructure.”