US FCC votes to advance proposed ban on Huawei and ZTE equipment

WASHINGTON, June 17 (Reuters) – The United States Federal Communications Commission voted unanimously on Thursday to advance a plan to ban approval of equipment in U.S. telecommunications networks from Chinese companies believed to be national security threats like Huawei (HWT.UL) and ZTE (000063.SZ).

The vote drew opposition from Beijing.

Under the proposed rules that got the initial approval, the FCC could also revoke previous equipment approvals issued to Chinese companies.

A Huawei spokesperson, in an email, called the FCC review “misguided and needlessly punitive.”

FCC Acting President Jessica Rosenworcel said the new measures “would exclude unreliable equipment from our communications networks … close that door.”

FCC Commissioner Brendan Carr said the FCC has approved more than 3,000 Huawei claims since 2018.

The FCC’s action would ban all future approvals for communications equipment deemed to pose an unacceptable risk to national security.

“The United States, without any evidence, is still abusing national security and state power to suppress Chinese companies,” said Zhao Lijian, spokesperson for China’s Foreign Ministry.

“Once again, we urge the United States to stop expanding the concept of national security and stop politicizing economic issues,” Zhao said at a regular press conference in Beijing.

In March, the FCC designated five Chinese companies as posing a threat to national security under a 2019 law to protect U.S. communications networks.

A group of U.S. lawmakers, including Democratic Senator Ed Markey and Republican Senator Marco Rubio, praised the FCC’s action, saying it reflects the goals of bipartisan legislation. They said the FCC voted “to put national security first by keeping compromised Chinese equipment out of US telecommunications networks.”

The companies involved included previously named Huawei and ZTE, as well as Hytera Communications Corp (002583.SZ), Hangzhou Hikvision Digital Technology Co (002415.SZ) and Zhejiang Dahua Technology Co (002236.SZ).

Huawei said that “blocking the purchase of equipment, on the basis of” predictive judgment “, linked to country of origin or brand is unfounded, discriminatory and will do nothing to protect the integrity of networks communications or US supply chains “.

In August 2020, the US government banned federal agencies from purchasing goods or services from any of the five Chinese companies.

In 2019, the United States put Huawei, Hikvision, and other companies on their economic blacklist.

Last year, the FCC named Huawei and ZTE as national security threats to communications networks – a statement that prohibited U.S. companies from tapping into an $ 8.3 billion government fund to buy equipment from companies.

In December, the FCC finalized rules requiring operators with ZTE or Huawei equipment to “rip and replace” this equipment. He proposed a repayment program for this effort, and U.S. lawmakers in December approved $ 1.9 billion to fund it.

Rosenworcel said the FCC will vote in July to finalize the rules governing the payback fund.

Reporting by David Shepardson Editing by Chizu Nomiyama

Our Standards: Thomson Reuters Trust Principles.

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