The FCC is moving ahead with efforts to block Chinese companies' access to the US market. In addition to approving so-called 'rip and replace' rules for existing Chinese equipment deemed a threat to national security, the regulator denied Huawei's appeal against a designation as a security threat. The FCC also started the process to withdraw China Telecom's authoritsation to operate in the US.
The Secure and Trusted Communications Networks Act of 2019 requires the FCC to administer compensation to operators so they can remove equipment from Huawei and ZTE from their networks. The regulator's latest order provides a list of communications equipment and services determined to be a risk to national security. This was drawn up with input from defence and security officials across the government. Once Congress appropriates funding, carriers that receive universal service funding to provide service in remote areas of the country must remove such equipment or services from their networks and dispose of it.
The order also establishes rules for awarding compensation for the removal and replacement of the equipment. The FCC estimates this will cost at least USD 1.6 billion to reimburse eligible providers. Operators are required to keep the FCC updated on the status of such equipment in their networks.
In June, the Commission’s Public Safety and Homeland Security Bureau formally designated Huawei and ZTE as banned for use by companies receiving universal service funds. It has now denied Huawei's application to review that order, the same as it earlier rejected ZTE's appeal. Huawei is also challenging the order in court.
Finally, the FCC is moving ahead with a recommendation from executive branch officials to revoke the operating licence of China Telecom in the US. Since the company was given notice in April, it had not provided a satisfactory response as to why the licence should be maintained, the FCC said. The regulator starts the formal procedure to look at whether there is any public interest in allowing the company to operate, and will also examine whether China Telecom lived up to assurances provided to the Departments of Justice and Homeland Security in 2007.
The US government took a similar step against China Mobile last year.
