FCC Formally Bans Huawei, ZTE from Accessing USF Funds
Thursday, July 02, 2020 | Comments

The FCC formally designated two companies — Huawei Technologies Co. and ZTE, as well as their parents, affiliates and subsidiaries — as covered companies for purposes of the agency’s November 2019 ban on the use of universal service support to purchase equipment or services from companies posing a national security threat. Money from the FCC’s $8.3 billion a year Universal Service Fund (USF) may no longer be used to purchase, obtain, maintain, improve, modify or otherwise support any equipment or services produced or provided by these suppliers.

In the latest FCC orders, the Public Safety and Homeland Security Bureau (PSHSB) based its final designations on the totality of evidence, including evidence supporting the commission’s initial designations and filings submitted in the record by Huawei, ZTE and other interested parties. The final designations of Huawei and ZTE are effective immediately.

“With today’s orders, and based on the overwhelming weight of evidence, the bureau has designated Huawei and ZTE as national security risks to America’s communications networks — and to our 5G future,” said FCC Chairman Ajit Pai. “Both companies have close ties to the Chinese Communist Party and China’s military apparatus, and both companies are broadly subject to Chinese law obligating them to cooperate with the country’s intelligence services. The bureau also took into account the findings and actions of Congress, the Executive Branch, the intelligence community, our allies and communications service providers in other countries. We cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our critical communications infrastructure. Today’s action will also protect the FCC’s Universal Service Fund — money that comes from fees paid by American consumers and businesses on their phone bills — from being used to underwrite these suppliers, which threaten our national security.”

In November 2019, the FCC unanimously adopted a ban on the use of universal service support to purchase, obtain or maintain any equipment or services produced or provided by companies posing a national security threat to the integrity of communications networks or the communications supply chain.

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