This archive report was first published on 4 July 2020.
On July 4, 2020, the US Federal Communications Commission (FCC) took a significant step in protecting national security by designating Huawei and ZTE as threats to America's communications networks.
The FCC's decision restricts US-based companies from benefiting from the Universal Service Program, an $8.3 billion government subsidy program, if they purchase equipment or services from the two Chinese tech giants.
FCC Chairman Ajit Pai stated, “With today’s Orders, and based on the overwhelming weight of evidence, the (FCC’s Public Safety and Homeland Security) Bureau has designated Huawei and ZTE as national security risks to America’s communications networks—and to our 5G future.”
This ruling formalizes the November 2019 FCC vote that first declared the two Chinese tech giants as potential national security risks.
The US has been lobbying other countries against allowing Huawei to set up its 5G networks in their territories, with Japan and Australia having already cut ties with the company.
India is also considering banning Huawei in the midst of political tensions with China, with New Delhi directing state-run BSNL and MTNL to not source telecom equipment from Huawei and ZTE.
However, countries like the United Kingdom have granted Huawei a minor role in their 5G rollout.
The running claims against ZTE and Huawei are that they could potentially use their networking equipment for espionage on behalf of the Chinese Communist Party.
Huawei has repeatedly denied any claims that it could hand over data to Beijing, but the FCC's main concern is China’s national security law that compels any and all China-based companies to hand over data to the government if compelled.
