June 23, 2021

Huawei Challenges US FCC Over National Security Threat Designation

Huawei Technologies has filed a legal challenge to the Federal Communications Commission’s designation of the Chinese company as a US national security threat to communications networks.

The FCC in June formally designated China’s Huawei and ZTE as security threats, a declaration barring US firms from tapping an $8.3 billion (roughly Rs. 60,460 crores) government fund to purchase equipment from the companies. In December the FCC rejected a petition from Huawei asking the agency to reconsider its decision.

Huawei said in a petition filed late on Monday with the Fifth US Circuit Court of Appeals that the FCC order exceeded “statutory authority; violates federal law and the Constitution; is arbitrary, capricious, and an abuse of discretion.”

The FCC did not immediately comment on Huawei’s petition.

The agency also in December finalised rules requiring carriers with ZTE or Huawei equipment to “rip and replace” that equipment. It created a reimbursement programme for that effort, and US lawmakers in December approved $1.9 billion (roughly Rs. 13,840 crores) to fund the programme.

Also in December, the FCC began the process of revoking China Telecom’s authorisation to operate in the United States as it took further steps to crack down on China’s role in US telecommunications.

China Telecom, the largest Chinese telecommunications company, has had authorisation to provide telecommunications services for nearly 20 years.

The FCC in April warned that it might shut down the US operations of three state-controlled Chinese telecommunications companies, citing national security risks. They include China Telecom Americas, China Unicom Americas, Pacific Networks Corp and its wholly owned subsidiary ComNet (USA) LLC.

In May 2019, the FCC voted to deny another state-owned Chinese telecommunications company, China Mobile, the right to provide services in the United States, citing risks that the Chinese government could use the approval to conduct espionage against the US government.

© Thomson Reuters 2021

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