FCC Blocks Huawei, ZTE From Billions In US Federal Subsidy Dollars

Huawei has denied US allegations that it poses a threat to national security

Huawei has denied US allegations that it poses a threat to national security More

"When it comes to 5G and America's security, we can't afford to take a risk and hope for the best", FCC Chairman Ajit Pai said in a statement.

"Some countries have, without any evidence, and making use of national security, tacitly assumed crimes to politicize, and even obstruct and restrict, normal technology exchange activities", she added.

"After all, if equipment poses a threat, it is not enough to stop subsidizing it", FCC commissioner Brendan Carr said at the hearing. 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. President Donald trump placed Huawei and others on a list in May prohibiting them from doing business with American companies.

The FCC is now seeking public comment on how the government will pay for costs associated with removing and replacing equipment which could cost up to $2 billion.

The Federal Communications Commission on Friday unanimously voted to help push Huawei and ZTE out of American telecommunications networks by blocking broadband subsidies from going to companies that don't rip out gear made by the two controversial Chinese telecom giants.

As of now, only select operators with approval can purchase Huawei and ZTE equipment and they can still do it but not with federal subsidy.

United States officials initially said the two had nothing to do with each other, since Huawei's actions were strictly law enforcement and national security issues. Nevertheless, the commission voted on Friday to adopt a rule that designates both companies as a security threat.

The Federal Communications Commission (FCC) on Friday voted unanimously to ban US -based telecom providers from using an $85 billion government subsidy program, the Universal Service Fund (USF) to buy equipment or services from the two Chinese telecom providers.

According to the commission, hundreds of carriers rely on the $8.5 billion Universal Service Fund to build telecommunication networks for low-income areas that have little access to phone or internet service. Huawei and ZTE will have 30 days to contest the designation and a final order compelling removal of equipment is not expected until next year at the earliest.

In response, Huawei said the FCC's action today will disrupt the business for many carriers in the United States, particularly in rural areas, which are reliant on the Chinese company's networking technologies.

The FCC is also prepared to require wireless carriers to remove all Huawei equipment from their networks. They say the equipment may have backdoors that could allow the Chinese government to meddle with US critical network infrastructure or open the door to massive, crippling data theft.

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