FCC chair notified Congress that U.S. service providers had requested ~$5.6B for removing and replacing network equipment and services provided by Huawei and ZTE.( Light Reading)
“A key concern, however, is the potential threat to U.S. national security posed by foreign companies that sell equipment to the U.S. government and conduct business in the United States. This includes telecommunications equipment made by Huawei and ZTE. As the largest seller of telecommunications equipment in the world, Huawei and ZTE pose a risk to U.S. national security. Their technologies could be used for malicious purposes to enable cyber attacks against entities and systems in the U.S., or for other purposes. These risks increase when equipment and services are procured from abroad and incorporated into critical information and communications technology infrastructure located in the United States.”
What is FCC notified about the U.S. service provider request of ~$5.6B for removing and replacing network equipment and services provided by Huawei and ZTE?
The FCC Chairman notified Congress yesterday that U.S. service providers have requested $5.6B in annual fees to remove and replace network equipment and services provided by Huawei and ZTE. This comes after the U.S. Commerce Department blocked the two companies earlier this year. While there’s no indication yet that these requests will be approved, if the fees are approved, the companies will be forced to abide by new rules on compliance, including requirements to comply with requests from law enforcement agencies to hand over data on customers and information about networks and devices. The proposal would give telecom companies an additional incentive to avoid using Huawei and ZTE products because, under the proposed fee structure, Huawei and ZTE will be charged $1,500 per device in the first year and a
Why have U.S. service providers requested ~$5.6B for removing and replacing network equipment and services provided by Huawei and ZTE?
Why are U.S. service providers requesting $5.6 billion to remove and replace network equipment and services provided by Huawei and ZTE? They claim that both companies are violating U.S. law by offering products and services in the United States without approval from the Commerce Department (an agency under the Department of Homeland Security). The argument is that Huawei and ZTE may be engaged in manufacturing or selling items subject to the International Emergency Economic Powers Act (IEEPA) and the Export Administration Regulations (EAR). According to the IEEPA and EAR, no person or entity may engage in any transaction related to the design, development, production, export, import, acquisition, or maintenance of any goods or technology subject to U.S. jurisdiction unless that person or entity.
How does the request of U.S. service provider~$5.6B for removing and replacing network equipment and services provided by Huawei and ZTE? Impact the U.S.?
The U.S. is likely using the request of U.S. service providers ~$5.6B for removing and replacing network equipment and services provided by Huawei and ZTE as an opportunity to take a strong stance against foreign countries using U.S. technologies in their own communications networks. It is unlikely, however, that this is the case because no one has yet produced any evidence of such foreign use. It’s doubtful that Huawei or ZTE, operating under close watch for years, would break any laws or risk their ability to do business in the United States. China has been more open to foreign investment and trade than the United States. The two countries have established joint ventures for high-tech products and research since
Conclusion
In conclusion, the Chairman and Commissioners expressed deep concerns about the risks posed to core national security and foreign policy interests by Chinese telecommunications companies Huawei and ZTE. They clarified that the companies must address longstanding national security concerns regarding the risk that their equipment could be used for malicious purposes, including against U.S. persons. This decision was taken unanimously at today’s meeting, following a briefing by senior officials from the Departments of Commerce, Defense, Homeland Security, State, and the Director of National Intelligence.
FAQS
1. Why is the FCC concerned about Huawei and ZTE?
The FCC is concerned about Huawei and ZTE because of national security. The FCC says foreign countries could use these companies to spy on Americans.
2. What will happen if Huawei and ZTE are banned?
If Huawei and ZTE are banned, American service providers must replace their equipment and services. The FCC says that this will cost $4.6 billion.
3. Is the FCC right?
The FCC says that the two companies pose a national security threat. The FCC says foreign countries could use the two companies to spy on Americans.
4. What is the best way for Congress to deal with the issue?
Congress should pass a law that allows the FCC to ban Huawei and ZTE.
