FCC Blocks Huawei, ZTE From Lucrative American Markets

In a move that will essentially cut Huawei off from a critical US market: the smaller, more rural-focused telecoms providers who rely on cheap Huawei components to maintain its wireless infrastructure. According to Bloomberg, the FCC has designated Huawei and ZTE, two Chinese telecoms giants, as national security threats.

The renewed pressure on both Huawei and ZTE from the FCC comes as the Commerce Department, State Department and the White House engage in a multilayered strategy to encourage US allies to block Huawei from providing components to their new 5G wireless networks, warning that the company creates vulnerabilities that can be exploited by the CCP.

Previously, the Trump Administration has tried to block both companies from either buying chips produced in the US and/or made with US technology.

Here’s more on the decision from FCC Chairman Ajit Pai.

BREAKING NEWS: The @FCC has designated #Huawei and #ZTE as companies posing a national security threat to the United States. As a result, telecom companies cannot use money from our $8.3B Universal Service Fund on equipment or services produced or provided by these suppliers. 1/5 pic.twitter.com/dH6QK4jbd4

— Ajit Pai (@AjitPaiFCC) June 30, 2020

In making this decision, @FCC took into account input from Congress, Executive Branch, intelligence community, allies, and communications service providers. Overwhelming weight of evidence supported designation of Huawei and ZTE as national security risks to U.S. networks. 2/4

— Ajit Pai (@AjitPaiFCC) June 30, 2020

Both Huawei and ZTE have close ties to the Chinese Communist Party and China’s military apparatus. And both companies are broadly subject to Chinese law, which obligates them to cooperate with the country’s intelligence services. 3/4

— Ajit Pai (@AjitPaiFCC) June 30, 2020

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. 4/4

— Ajit Pai (@AjitPaiFCC) June 30, 2020

We imagine more threats of corporate retaliation from Beijing should be landing any minute now.