The FCC has announced that that the Chinese communications companies Huawei Technologies Company and ZTE Corporation have been officially designated as national security threats to the integrity of U.S. communications and supply chain. The FCC’s Public Safety and Homeland Security Bureau went on the specify that this designation also applies to the companies’ parents, affiliates, and subsidiaries as well. The reason for this decision was the FCC’s assessment that both organizations are highly vulnerable to influence from within the Chinese government, including the military and intelligence agencies. This new designation goes into effect immediately and means that none of the $8.3 billion/year Universal Services Fund may be used to “purchase, obtain, maintain, improve, modify, or otherwise support any equipment or services” from either Huawei or ZTE.
This is not the first time that Chinese technologies and telecom firms have come under scrutiny and investigation by the U.S. government. In early 2018 the heads of the major U.S. intelligence agencies, including the Office of the Director of National Intelligence (ODNI) urged against purchasing services and equipment from Huawei and ZTE. The risk of influence from the Chinese government over these two companies does not only impact government organizations but private companies as well. Chinese intelligence interests extend to intellectual property for nearly all industries, including technology, communications, manufacturing and healthcare. No indications were given on how this would impact any companies currently contracted by the U.S. government who use equipment produced by Huawei or ZTE. Both companies have been found to have a troubling number of security risks and vulnerabilities within their products in recent years, causing some security analysts in private industry and other government agencies to question the security implications of using products or services from these companies prior to the FCC designation. More information on this incident can be found at https://www.bleepingcomputer.com/news/security/us-designates-chinas-huawei-and-zte-as-national-security-threats/
The official FCC designation regarding Huawei can be found at https://docs.fcc.gov/public/attachments/DA-20-690A1.pdf
The official FCC designation regarding ZTE can be found at https://docs.fcc.gov/public/attachments/DA-20-691A1.pdf