The Federal Communications Commission (FCC) in a formal press release today, declares Huawei and ZTE a threat to US national security. According to the Commissioner of the FCC Brendan Carr, both companies have ties to “Communist China” and intend to participate in large scale espionage in the industrial sector.
This is without a doubt, a heavy blow to both Chinese companies in the USA market. The decision from the Commission means that American companies can no longer use subsidies from FCC’s Universal Service Fund to either purchase, maintain, improve, modify, obtain, or support any services or equipment provided by ZTE and Huawei.
The press release furthers states that this is the latest step they are taking in order to protect America’s communications networks from the threat posed by China. One of the many efforts was the launching of a proceeding which is aimed at removing ZTE and Huawei gear from the country’s communications networks.
Commissioner Brendan Carr also points out that the commission will continue to take necessary steps to secure “America’s communications networks from bad actors that would do harm”. He says “America has turned the page on the weak and timid approach to Communist China of the past” and is now “showing the strength needed to address Communist China’s threats”.
US companies are still allowed to trade with Huawei and ZTE in certain fields that are deemed fit by the US Commerce Department. However, such a US company won’t receive any financial incentive(s). Without these incentives, most/every US company will undoubtedly stop doing business with Chinese telecommunications giants like Huawei and ZTE.