FCC Advances Efforts to Remove Untrusted Chinese Equipment from US Market

The Federal Communications Commission plans to vote July 13 on an order that would allow it to reimburse larger telecommunications companies—in addition to smaller rural providers—for removing equipment from Chinese firms considered a threat to national security from their networks.

The order issued Tuesday applies to recipients of Universal Service Funds, a $9-billion-per-year pot of public money used to expand access to broadband. The Commission initially planned to reimburse firms with fewer than 2 million customers for replacing prohibited equipment from Huawei and ZTE but in February, after receiving $1.9 billion in appropriations from Congress, proposed opening up the reimbursement qualification to those with fewer than 10 million customers.

At their last meeting on Jun 17, the commissioners also unanimously proposed using the FCC’s equipment authorization process to further restrict suspect firms’ access to the U.S. market.  

The commission released a list of covered equipment in March that includes Huawei and ZTE in addition to three China-based firms that make video surveillance equipment: Hytera, Hikvision and Dahua. All were identified as threats in the 2019 National Defense Authorization Act and should be denied permits to operate in the U.S., whether or not they receive universal service funds, commissioners said.

During the meeting, FCC Commissioner Brendan Carr noted the FCC’s approval just last month of applications from Hytera and said of the current equipment authorization process: “This is a glaring loophole and one that Huawei and others are using today.”

“It’s the presence of this insecure equipment in our networks that’s the threat, not the source of funding used to purchase it,” he said. “Yet the FCC through its equipment authorization process continues to approve for use in the U.S. thousands of applications by Huawei and others deemed national security threats.”        

In October of 2019, noting their implication in human rights violations against ethnic minorities in China’s northwest region of Xinjiang, the Commerce Department added two of the firms on the FCC’s covered list—Hikvision and Dahua—to its entities list, requiring U.S. organizations to obtain a special permit to do business with them.

A Dec. 2020 report from Top10VPN, which reviews the privacy and security of communications equipment, found equipment from Hikvision and Dahua was more prevalent in the U.S. than in any other country outside of China. The firm used the Shodan scanning tool to show the U.S. having more than twice as many of those camera networks as Vietnam, the country with the next most networks outside of China.