The US telecommunications regulator plans to vote in November to designate China’s Huawei and ZTE as national security risks, barring their US rural carrier customers from tapping an $8.5 billion government fund. Photo: AP

WASHINGTON – The US telecommunications regulator plans to vote in November to designate China’s Huawei and ZTE as national security risks, barring their US rural carrier customers from tapping an $8.5 billion (R124 billion) government fund to purchase equipment or services.

The Federal Communications Commission (FCC) also plans to propose requiring those carriers to remove and replace equipment from such designated companies, FCC officials said on Monday.

At a meeting set for November 19, the FCC said it planned to vote to ask carriers how much it would cost to remove and replace Huawei Technologies and ZTE from existing networks and to establish a reimbursement programme to offset the costs of removing the equipment.

“When it comes to 5G and America’s security, we can’t afford to take a risk and hope for the best,” FCC chairperson Ajit Pai said in a statement. “As the United States upgrades its networks to the next generation of wireless technologies – 5G – we cannot ignore the risk that the Chinese government will seek to exploit network vulnerabilities in order to engage in espionage, insert malware and viruses, and otherwise compromise our critical communications networks.”

This is the latest in a series of actions by the US government aimed at barring US companies from purchasing Huawei and ZTE equipment. Huawei and ZTE would have 30 days to contest the FCC’s national security risk designation and a final order compelling removal of equipment is not expected until next year at the earliest.

“In 30 years of business, Huawei has never had a major security-related incident in the 170 countries where we operate,” said a Huawei spokesman in Shenzhen, China.

“Today’s proposal, released by the FCC Chairman, only impacts the broadband providers in the most unserved or underserved rural areas of the United States,” the spokesman said. “Such action will further widen the digital divide; slowing the pace of economic development without further securing the Nation’s telecommunications networks.”

ZTE did not immediately respond to a Reuters’ request for comment.

Chinese Foreign Ministry spokesman Geng Shuang said China was “resolutely opposed” to the US putting such pressure on Chinese companies, which was “economic bullying” that went in the face of US claims to follow the principles of a market economy.

This decision would only harm US consumers, especially in rural areas, which could be left without telecommunication services, he told a daily news briefing.

“I don’t know what the US view is on this risk,” Geng said.

The US should stop trying to smear Chinese companies and provide them with a non-discriminatory environment in which to operate, he said.

BUSINESS REPORT