Making things even more difficult for HUAWEI and fellow Chinese company ZTE, the US Federal Communications Commission (US FCC) has designated the two as threats to national security. Chairman Ajit Pai said in a statement that the action has been taken in view of evidence that the two companies are a threat to the country’s communications network and have close ties to the Chinese government.
Following the order, money from US FCC’s $8.3 billion a year Universal Service Fund can no longer be used to purchase equipment or procure services from HUAWEI and ZTE, as well as their affiliates, parent companies, and subsidiaries. HUAWEI and ZTE are yet to respond, but both companies have denied the allegations of links with the Chinese government and security risks in the past.
“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,” FCC Chairman Ajit Pai said. “We cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our critical communications infrastructure.”