U.S. Attorney General William Barr says an FCC plan to ban U.S. funding for Huawei and ZTE communications equipment will help secure domestic communications from Chinese espionage. The action comes as the agency plans to vote this week on an order barring carriers from using Universal Fund Subsidies to buy network gear or services from the Chinese telecoms.
In a letter to FCC Chairman Ajit Pai last week, Barr highlighted allegations the Department of Justice has made against Huawei and ZTE.
Federal criminal charges are pending against Huawei in the Eastern District of New York relating to alleged violations of America’s Iran embargo, bank fraud and obstruction of justice. The DOJ is also prosecuting Huawei for trade secret theft and obstruction of justice. The Chinese telecoms refute the allegations.
“While these cases do not discuss activities that would directly affect the security of our telecommunications networks, it is impossible to ignore them in evaluating whether those companies should be trusted to build or service networks with the support of federal funds,” wrote Barr. “As the [FCC] Report and Order notes, a company’s ties to a foreign government and willingness to take direction from it bear on its reliability. Their own track record, as well as the practices of the Chinese government, demonstrate that Huawei and ZTE cannot be trusted,” he stated.
Allowing recipients to use USF funds to purchase such equipment and services will have the opposite effect, according to Barr, including, for example, “rewarding Huawei and ZTE for their business practices and putting further pressure on Huawei and ZTE’s competitors, which are already labor in a market wildly distorted by Chinese state-funding. The DOJ, “supports, and strongly encourages your fellow Commissioners to support, the proposed prohibition on the use of USF funds for companies like Huawei and ZTE and the launch of a process to remove and replace such equipment.”
November 18, 2019