Huawei claims independence from Beijing, fighting to keep FCC funds for its US network clients

The FCC is currently hearing out public comments for whether it will block any US networking company from buying telecommunications equipment from several Chinese manufacturers. The mechanism for blocking the purchases would be a ban on access to the taxpayer-funded Universal Access Fund to subsidize major equipment purchases.

Plenty of beltway politicians and intelligence officials claim that the likes of Huawei and ZTE have crucial links with the Beijing government and could pass along American user data so that their home country gains an economic and cybersecurity advantage. ZTE, found to have violated trade sanctions, was punished with an imports ban by the Commerce Department, though legislators believe President Donald Trump meddled with the righteous verdict in revising the penalty raft.

Huawei, in particular, sees its role differently. In a reply to the rule proposal obtained by The Verge, the company attempted to bat away concerns from lawmakers:

As Huawei showed in its initial Comments, the reality is that it is an independent, privately-owned business that is no more subject to the control of the Chinese Government than American companies are controlled by the U.S. Government.

It aligns itself as a lower-cost equipment provider in a marketplace full of very expensive options and says its clients from rural internet service providers to major networks, such as Sprint, would suffer from a lack of price competition:

Where Huawei is allowed to bid, its presence restrains the pricing of other vendors, and consumers benefit regardless of who wins the bid. Because Huawei is often not allowed to bid in U.S. procurements, average prices for network equipment are higher here than in most other countries; and U.S. customers generally pay higher prices for a lower level of mobile service than consumers elsewhere. Allowing Huawei to compete freely could yield savings of at least $20 billion in building U.S. mobile infrastructure between 2017 and 2020, which would likely be passed through to consumers.

Networks that are forced to rip out Huawei products, the company goes on to argue, may end up on the hook for millions of dollars for hardware reconciliation.

The rule isn’t scheduled for a vote right now, but it could get brought up in the FCC’s open meeting next month.

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About The Author
Jules Wang
Jules Wang is News Editor for Pocketnow and one of the hosts of the Pocketnow Weekly Podcast. He came onto the team in 2014 as an intern editing and producing videos and the podcast while he was studying journalism at Emerson College. He graduated the year after and entered into his current position at Pocketnow, full-time.