U.S. FCC votes to advance proposed ban on Huawei, ZTE gear

WASHINGTON, June 17 (Reuters) – The U.S. Federal Communications Commission unanimously voted Thursday to launch a plan to ban licenses for devices on U.S. telecommunications networks by Chinese companies that are considered national security threats, such as Huawei (HWT. UL) and ZTE (000063.SZ).

The vote met with opposition in Beijing.

Under the proposed rules, which were initially approved, the FCC could also revoke previous equipment permits granted to Chinese companies.

A Huawei spokesman described the FCC revision in an email as “misdirected and unnecessarily punitive”.

Acting FCC Chair Jessica Rosenworcel said the new measures would “remove untrustworthy devices from our communications networks … We have left opportunities for (Huawei and other Chinese devices) to be used in the United States through our device approval process, so close that door.”

FCC Commissioner Brendan Carr said the FCC had approved more than 3,000 applications from Huawei since 2018.

The FCC measure would prohibit all future approvals for communications devices that are believed to pose an unacceptable risk to national security.

“The United States is still abusing national security and state power to suppress Chinese businesses without any evidence,” said Zhao Lijian, a spokesman for the Chinese Foreign Ministry.

“We call on the US again to stop expanding the concept of national security and stop politicizing economic problems,” Zhao said at a regular media talk in Beijing.

In March, the FCC classified five Chinese companies as a national security threat under a 2019 law to protect U.S. communications networks.

A group of US lawmakers, including Democratic Senator Ed Markey and Republican Senator Marco Rubio, praised the FCC’s action, saying it reflected the goals of bipartisan legislation. They said the FCC voted to “put national security first by keeping compromised Chinese equipment off US telecommunications networks.”

Affected companies included the previously named Huawei and ZTE as well as Hytera Communications Corp (002583.SZ), Hangzhou Hikvision Digital Technology Co (002415.SZ) and Zhejiang Dahua Technology Co (002236.SZ).

Huawei said, “Blocking device purchases based on ‘predictive judgment’ about country of origin or brand is unfounded, discriminatory and will do nothing to protect the integrity of US communications networks or supply chains.”

In August 2020, the U.S. government banned federal agencies from buying goods or services from any of the five Chinese companies.

In 2019, the United States put Huawei, Hikvision, and other companies on their economic blacklist.

Last year, the FCC identified Huawei and ZTE as national security threats to communications networks – a statement that prevented US firms from tapping into a $ 8.3 billion government fund to buy devices from the companies.

In December the FCC passed rules according to which network operators with ZTE or Huawei devices must “tear up and replace” these devices. It proposed a refund program for those efforts, and U.S. lawmakers approved $ 1.9 billion in December to fund it.

Rosenworcel said the FCC will vote in July to finalize rules to oversee the reimbursement fund.

Reporting by David Shepardson Editing by Chizu Nomiyama

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