Huawei and ZTE officially designated “threats to national security”

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A 5G logo can be seen in an authorized Huawei experience store on May 29, 2020 in Beijing, China.Qin Luyao | VCG | Getty Images

The U.S. Federal Communications Commission (FCC) has officially designated national security threats to Huawei and ZTE.This means that companies cannot use an $ 8.3 billion government subsidy program, known as the Universal Service Fund, to buy, maintain or support equipment or services from the two Chinese telecommunications giants. .

“With today’s orders, and based on the overwhelming weight of evidence, the FCC’s Office of Public Safety and Homeland Security has identified Huawei and ZTE as national security risks to US communications networks and for our 5G future, “said FCC President Ajit Pai. in a report.

The decision formalizes a unanimous FCC vote in November in which the regulator declared the two Chinese companies to be a threat to national security.

Huawei and ZTE did not respond to a request for comment when contacted by CNBC.

Washington’s latest move is another blow to Huawei and ZTE, building on the country’s biggest campaign in the past 18 months against the two Chinese companies. Last year, Huawei was placed on an American blacklist called the Entity List and a new rule in May aimed at cutting off the tech giant from major semiconductor supplies.

The Trump administration has also tried to convince other countries to block Huawei from deploying their 5G networks. Countries like Australia and Japan have followed suit. India also suspects that it should ban Huawei in the midst of wider geopolitical tensions with China. However, other countries like the United Kingdom have challenged the United States, giving Huawei a limited role in its 5G deployment.

5G refers to next generation mobile networks that promise ultra-fast data speeds. But they are considered even more important than previous generations of networks because of their potential ability to support critical infrastructure.

Critics of Huawei and ZTE said their network equipment could be used by Beijing for spying.

“The two companies have close ties to the Chinese Communist Party and the Chinese military, and the two companies are largely subject to Chinese law requiring them to cooperate with the country’s intelligence services,” said Pai.

The FCC president was referring to a national security law in China that appears to require companies to hand over data to the government if requested.

Huawei has repeatedly stated that it will never transmit data to Beijing.

“We cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our critical communications infrastructure,” said Mr. Pai.

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