US FCC declares Huawei, ZTE as threats to national security

Both firms are vulnerable to influence by the Chinese Communist Party, military, and intelligence agencies, FCC believes

The US Federal Communications Commission (FCC) on Tuesday designated Chinese telecom firms Huawei and ZTE Corp as posing threats to national security, a move that will formally bar many small rural carriers from using FCC's Universal Service Fund $8.3 billion fund to buy or maintain equipment from the two companies.

"The FCC's Public Safety and Homeland Security Bureau formally designated two companies - Huawei Technologies Company (Huawei) and ZTE Corporation (ZTE), as well as their parents, affiliates, and subsidiaries - as covered companies for purposes of the agency's November 2019 ban on the use of universal service support to purchase equipment or services from companies posing a national security threat," an official statement [pdf] from the FCC said.

According to FCC, both firms are highly vulnerable to influence by the Chinese Communist Party, military, and intelligence agencies. Various security vulnerabilities which are known to impact both Huawei and ZTE equipment also led to FCC taking the stern step against the two companies.

In a message posted on Twitter, FCC Chairman Ajit Pai said that the decision is "based on the overwhelming weight of evidence."

Pai stated that the two firms have close links with Chinese Communist Party and China's military apparatus, and the decision will send a clear message that the US "cannot and will not allow the Chinese Communist Party to exploit vulnerabilities in the US communications networks."

In February 2018, the chiefs of all six top US intelligence agencies (CIA, NSA, FBI, DNI, DIA, and NGA) had recommended the government and the mobile carriers to avoid buying equipment and services from the two companies.

In a statement, FCC commissioner Geoffrey Starks noted that designating the two firms as security threats is a start, adding the Huawei and ZTE equipment currently being used in US telecom networks also need to identified and replaced.

Last year, the US Commerce Department added Huawei to its "Entity List," barring American firms from selling technology to Huawei without permission from the US government.

In March, Trump signed legislation to bar US firms from using federal funds to buy equipment from foreign companies that are deemed threat to national security.

Last month, Britain's National Cyber Security Centre (NCSC) reportedly directed telecom firms to stockpile networking gear sold by Chinese firm Huawei in the wake of US trade sanctions.

British officials fear that the Chinese equipment maker may not be able to maintain critical supplies and to provide updates for its equipment while facing a trade ban from the US.

Earlier in May, it emerged that the UK government is planning to cut the role of the Chinese firm in British 5G infrastructure to zero by 2023.

"The security and resilience of our networks is of paramount importance," the National Cyber Security Centre said in a statement.

"Following the US announcement of additional sanctions against Huawei, the NCSC is looking carefully at any impact they could have to the UK's networks."