FCC Expected to Further Tighten Restrictions on Sale of Chinese Gear in US
The FCC is expected to approve soon a recent draft order circulated by Chairwoman Jessica Rosenworcel that would further clamp down on gear from Chinese companies, preventing the sale of yet-to-be authorized equipment in the U.S. The order, circulated by Rosenworcel Oct. 5 (see 2210070083), would ban the FCC authorization of gear from companies including Huawei, ZTE, Hytera Communications, Hikvision and Dahua Technology, FCC officials said. Industry officials believe the coming restrictions could increase lawmakers' interest in approving additional funding for the Secure and Trusted Communications Networks Reimbursement Program as part of an end-of-year legislative package (see 2210130074).
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The FCC faces a statutory deadline of Nov. 11 under the Secure Equipment Act, requiring the FCC to stop authorizing equipment by companies the commission decides are a national security risk (see 2111120058). CTA declined comment Thursday. “The FCC remains committed to protecting our national security by ensuring that untrustworthy communications equipment is not authorized for use within our borders, and we are continuing that work here,” Rosenworcel said in a statement.
The order will likely be approved 4-0, officials said. Commissioner Brendan Carr urged tightening equipment authorization rules in March (see 2203160031). “The Secure Equipment Act gives us additional authorities to close” loopholes “and we should reach a final determination in that proceeding quickly,” he said then. The FCC launched a proceeding in June 2021 designed to further clamp down on gear from companies deemed to pose a security risk to U.S. networks (see 2106170063).
Sen. Mark Warner, D-Va., a co-sponsor of the equipment act, welcomed the development. “Several years ago a bipartisan group of senators on the Senate Select Committee on Intelligence began raising the alarm about the threat that Huawei and ZTE posed to our national security,” he said in a statement: “I’m glad to see” the FCC “finally take this step to protect our networks and national security.”
“Without a doubt the FCC will tighten the restrictions on Chinese equipment,” Recon Analytics’ Roger Entner told us. “There is a tremendous amount of suspicion around how Chinese state security can use Chinese equipment to spy on anyone, not just Americans,” he said: “At the same time, it raises the prospects of China imposing similar restrictions on US equipment.”
“I’m glad we are moving forward on closing the Huawei loophole,” said Digital Progress Institute President Joel Thayer. The commission needs “to ferret out more details, so I’d expect there to be a further rulemaking on top of this order,” he said.
“Telecom networks are the foundation of the digital society,” emailed John Strand of Strand Consult: “COVID-19 proved that telecom networks are essential, as they have allowed people to work, learn, shop, and get healthcare from home during a period of lockdown and social distancing. Consequently, the importance of security and resilience of these networks is heightened. Policymakers are justifiably concerned about the vulnerabilities of these networks.”
Strand noted actions against Huawei aren’t just a “front” in a U.S. trade war with China. “Other than a few mobile phones on Amazon, Huawei sells little in the United States,” he said. “The fear that Chinese information technology can be abused is not new; it dates to 2005, and many reports have been published about this subject,” he said. Strand noted many countries have imposed restrictions on Huawei and ZTE. “These restrictions have followed extensive investigations which have uncovered many red flags including but not limited to the inability to establish the technical baseline that the systems are not compromised by backdoors, inability to demonstrate that the Chinese government and military are not integrated with the enterprise, lack of operational and financial transparency and disclosure, illegal and unethical business practices, and violation of international law,” he said.
“This FCC ban is unprecedented, but unsurprising in that the FCC was required to act … under the Secure Equipment Act that was signed last year,” emailed telecom lawyer Marc Martin of Perkins Coie. “It’s hard to speculate about this being applied more broadly, however, as this arises from very specific circumstances,” he said.