By David Shepardson
WASHINGTON (Reuters) - The Federal Communications Commission on Tuesday formally designated Chinese's Huawei Technologies Co and ZTE (HK:0763) Corp (SZ:000063) as posing threats to U.S. national security, a declaration that bars U.S. firms from tapping an $8.3 billion government fund to purchase equipment from the companies.
The U.S. telecommunications regulator voted in November 5-0 to issue the declaration and proposed requiring rural carriers to remove and replace equipment from the two Chinese companies from existing U.S. networks. "We cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our critical communications infrastructure," FCC Chairman Ajit Pai said in a statement Tuesday.
Huawei and ZTE did not immediately respond to requests for comment but have previously sharply criticized the FCC's actions.
FCC Commissioner Geoffrey Starks said on Tuesday that "untrustworthy equipment" remains in place in U.S. networks and said the U.S. Congress must allocate funding for replacements.
In May 2019, Trump signed an executive order declaring a national emergency and barring U.S. companies from using telecommunications equipment made by companies posing a national security risk. The Trump administration also added Huawei to its trade blacklist last year.
The FCC has taken an increasingly hard line against Chinese firms.
In April, the FCC said it may shut down U.S. operations of three state-controlled Chinese telecommunications companies
The FCC required China Telecom Americas (HK:0728), China Unicom Americas (HK:0762), Pacific Networks Corp and its wholly owned subsidiary ComNet (USA) LLC to explain why it should not start the process of revoking authorizations enabling their U.S. operations.
The FCC granted its approvals to the firms more than a decade ago.
In May 2019, the FCC voted to deny another state-owned Chinese telecommunications company, China Mobile Ltd (HK:0941), the right to provide U.S. services, citing risks that the Chinese government could use the company to conduct espionage against the U.S. government.