The decision was nearly expected as USA lawmakers had given a hint late Thursday that they would urge White House to declare these Chinese companies as national security threats. "In the absence of evidence, Huawei poses a national security threat?" There is concern that the Chinese government could hack into USA networks if Huawei and ZTE gear were used as a backbone of major communication networks.
"National schools, hospitals and libraries will feel the effects", said Huawei, adding that the FCC decision would lead to higher prices. It also claims that the FCC misinterprets Chinese law. The U.S. has been pressuring allies to ban Huawei from their networks and has restricted exports of U.S. technology to Huawei, though numerous loopholes have been exploited.
In a November 22 statement on the new rule, FCC Chairman Ajit Pai said Huawei and ZTE "pose a national security threat to the integrity of communications networks or the communications supply chain".
Huawei and ZTE have 30 days to contest their national security risk designations.
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Huawei's chief financial officer, Meng Wanzhou, who is also the daughter of the company's founder and CEO, was arrested in Canada previous year and is now fighting extradition to the United States on fraud and conspiracy charges tied to USA sanctions. Nevertheless, the commission voted on Friday to adopt a rule that designates both companies as a security threat.
Android Authority reached out to Huawei for comment, but did not receive a response by press time.
And Democratic Commissioner Geoffrey Starks recommended the FCC create a national security task force to look more broadly at the intersection of telecom and security concerns.
"With 5G technology ushering in unprecedented connectivity, ensuring global networks are safe and reliable is more important than ever before", said David Stehlin, CEO at the Telecommunications Industry Association.
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American regulators on Friday unanimously branded Chinese telecoms firms ZTE and Huawei as threats to national security and blocked them from accessing $8.5 billion in federal funds for services and equipment.
The new rules also would require telecommunications carriers that use the fund to certify their equipment is made by vendors other than ZTE and Huawei. The agency said China's Huawei and ZTE pose such a threat.
The FCC is also prepared to require wireless carriers to remove all Huawei equipment from their networks.
Earlier this week, Secretary of Commerce Wilbur Ross said there are two bills pending in Congress to finance the replacement of the 3G and 4G equipment. "We simply can not allow China, and other bad actors, to infiltrate our telecommunications networks".
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