FCC Pushes Plan that Would Squeeze Out Huawei and ZTE
The FCC today moved forward with a plan that would make it harder and/or more expensive for U.S. companies to buy equipment from corporations that might pose a security risk. Though the FCC didn't call out China-based Huawei or ZTE by name, the proposal is clearly meant to keep the two companies sidelined in the U.S market. Specifically, the FCC wants to "prohibit use of [Universal Service Fund monies] on the purchase of equipment or services from any company that poses a national security threat to the integrity of U.S. communications networks or the communications supply chain." The Notice of Proposed Rulemaking adopted by the FCC today isn't final, and the agency is seeking input on how to implement the proposed prohibition. For example, what types of equipment/services should be banned, how should the FCC identify the equipment, what are the costs/benefits, and finally could the rule best be enforced. Huawei and ZTE are taking fire from lawmakers for their supposed ties to the Chinese government. Today's action follows recent blows to Huawei and ZTE. Earlier this year, Huawei lost distribution deals with AT&T and Verizon Wireless, while earlier this week ZTE was banned from buying American components and technology for its phones. "Hidden 'backdoors' to our networks in routers, switches, and other network equipment can allow hostile foreign powers to inject viruses and other malware, steal Americans' private data, spy on U.S. businesses, and more," said FCC Chairman Ajit Pai. Republican lawmakers have also introduced legislation that would bar U.S. government employee from buying Huawei and ZTE phones. Neither Huawei nor ZTE commented on the FCC's actions.
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