TIA Supports FCC Proposal to Block Use of USF Funds on Some Foreign Products
Monday, June 04, 2018 | Comments

The Telecommunications Industry Association (TIA) said that the FCC should ban the use of federal subsidies for products from suppliers deemed to pose a national security risk, including Chinese companies Huawei and ZTE.

In comments filed with the FCC, TIA supported the commission’s proposal to prohibit Universal Service Fund (USF) spending on equipment from specific suppliers presenting a national security risk to U.S. communication networks.

“TIA strongly supports efforts by the government to address concerns regarding specific ICT (information and communications technology) suppliers deemed to pose a threat to national security,” said Cinnamon Rogers, TIA’s senior vice president of government affairs. “The FCC has a key role to play, and we support the commission’s efforts to carefully craft restrictions on USF spending.

“As the first independent agency seeking public comment toward new rules to address this important problem, the FCC will set an example for other federal agencies and foreign allies tackling this threat.” Rogers added. “We also appreciate the FCC’s recognition that improving supply chain security more generally is an ongoing process that requires work across the federal government in partnership with the ICT industry.”

TIA said the FCC should take immediate steps to ban the use of any USF dollars on products from suppliers of concern, arguing that there is now substantial evidence that China and Russia have supported extensive and damaging cyberespionage efforts targeting the United States, and the U.S. government has increasingly focused on the risks posed by products from specific ICT suppliers believed to have close ties with those governments.

TIA said that the FCC has a responsibility to safeguard a program it directly oversees, and focusing on the USF would address an immediate problem while allowing the rapidly evolving national and international conversation on these issues to continue.

The government’s focus must remain on the trustworthiness of specific suppliers rather than supply chain management generally, the TIA said. ICT supply chain management is best addressed through public-private partnerships and industry standards. TIA also said that the United States should not impose blanket country-of-origin prohibitions because global supply chains and access to export markets are critical to the health and competitive standing of the U.S. ICT industry. Restrictions should focus on specific types of products or components that pose a genuine security risk.

If appropriately tailored, the costs will be significantly outweighed by the benefits, TIA said.

Any effects on broadband deployment should be minimal because while government intervention in the marketplace should never be taken lightly, Huawei and ZTE currently have a very small market share in the United States, TIA said. Additionally, the FCC should not bear the responsibility of identifying suppliers that pose national security risks, the TIA said. National security determinations should be made by executive branch agencies with appropriate expertise. That threshold has already been satisfied with regard to Huawei, Kaspersky Labs and ZTE, TIA argued.

In a dynamically changing environment, the FCC does not have the resources or expertise to continually monitor which companies pose national security risks. Deferring to determinations by expert agencies would also avoid an inconsistent patchwork of restrictions.

Over the long term, an interagency process should be established to identify suppliers and products of concern, TIA said.

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