The FCC Tuesday officially designated Chinese telecoms Huawei and ZTE — and their parents, affiliates, and subsidiaries — as “covered companies” under the agency’s 2019 ban on the use of universal service support to purchase equipment or services from companies posing a national security threat. The action means money from the Commission’s $8.3 billion a year Universal Service Fund may no longer be used to buy, obtain, maintain, improve, modify, or otherwise support any equipment or services produced or provided by these suppliers. The designations are effective immediately.
“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,” said FCC Chairman Ajit Pai. He said the agency also took into account the findings and actions of Congress, the executive branch, the intelligence community, America’s 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,” he explained. “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.”
In November 2019, the Commission unanimously adopted a ban on the use of USF money to companies deemed to be national security threats. The Commission proposed Huawei and ZTE be covered by the rule.
FCC commissioner Geoffrey Starks has been outspoken about the need to help smaller telecoms replace untrusted gear currently in their networks. He called on the Commission last year to find untrustworthy equipment in networks, fix the problem by instituting a replacement program, and to fund equipment replacement. His catchphrase is: “Find it. Fix it. Fund it.”
“We must prioritize our review of our recent information collection and establish an expedited plan for the removal and replacement of untrustworthy equipment,” said Starks Tuesday. “That plan should seriously consider leveraging Open RAN technology, which will use standardized hardware and interoperable interfaces to enable networks to combine equipment from multiple vendors.”
Starks also called on Congress to fund the replacement effort. “Congress recognized in the Secure and Trusted Communications Networks Act that many carriers will need support to transition away from untrustworthy equipment, but it still has not appropriated funding for replacements. I look forward to working with Congress and my colleagues to ensure there are sufficient funds to get the job done.”