FCC names names: Five Chinese equipment vendors singled out as ‘unacceptable risk’

The Federal Communications Commission has released its first official list of equipment vendors which it says pose “unacceptable risk to national security or the security and safety of U.S. persons.”

The five vendors named on the list are: Huawei, ZTE, Hytera Communications, Hangzhou Hikvision Digital Technology and Dahua Technology. The list bans the use of federals funds for telecommunications equipment from Huawei and ZTE and more specifically, calls out “video surveillance and telecommunications equipment” from the last three companies, “to the extent it is used for the purpose of public safety” and security of government facilities and critical infrastructure.

Huawei has been under U.S. federal government restrictions since May 2019, when it was put on the Commerce Department’s Entity List (Hikvision, Dahua and ZTE were on that list as well). Last summer, as the FCC began the process to draw up the list released last week, the agency declared that U.S. companies could not use federal funds “to purchase, obtain, maintain, improve, modify, or otherwise support any equipment or services produced or provided” by Huawei and ZTE because the two vendors were considered national security risks.

Huawei has steadfastly denied that its equipment and software pose security threats to nations or individuals and has attempted to fight U.S. exclusion of its solutions in court. The company said last month that it does not expect the Biden administration to lift restrictions that were initiated by the Trump administration. But Huawei also noted that it is involved in the builds of half of global 5G networks, despite the significant pressure that the U.S. has put on allies over the past several years to avoid the use of equipment from Chinese vendors, especially Huawei and ZTE.

Meanwhile, Hytera — which sells radio systems for industrial, enterprise and public safety use — has been embroiled in a long-running series of lawsuits around the world with Motorola Solutions; a U.S. court recently decided that Hytera will have to pay royalties to Motorola over trade secrets violations, but the two companies are reportedly arguing over the exact amounts, with Hytera claiming that Motorola wants it to pay such high royalties that it would be essentially unable to sell two-way radios at a profit.

Hikvision told Reuters that it strongly opposed the FCC’s decision “and is weighing all options on how to best address this unsubstantiated designation. Hikvision does not belong on a list for next-generation networks.”

The FCC actions come as a result of the passage of the Secure Networks Act, signed into law by former President Donald Trump in March of last year. That law established a process to ban the use of federal subsidies to purchase equipment or services deemed to pose national security risks, as well as a reimbursement program to help companies replace equipment or services that have been designated as security risks. The bill also established a $1 billion fund for replacing suspect equipment in telecom networks.

In a statement, Acting FCC Chairwoman Jessica Rosenworcel called the FCC’s list “a big step toward restoring trust in our communications networks.

“Americans are relying on our networks more than ever to work, go to school, or access healthcare, and we need to trust that these communications are safe and secure,” said Rosenworcel. “This list provides meaningful guidance that will ensure that as next-generation networks are built across the country, they do not repeat the mistakes of the past or use equipment or services that will pose a threat to U.S. national security or the security and safety of Americans.”

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