Trump signs law banning use of federal funds to purchase Huawei equipment

President Trump on Thursday signed into law a bill banning the use of federal funds to purchase equipment from telecom companies deemed a national security threat, such as Chinese telecom group Huawei.

The Secure and Trusted Communications Act, which the Senate passed in February and the House approved last year, will also require the Federal Communications Commission (FCC) to establish a $1 billion fund to help small telecom groups remove existing equipment that is deemed to be a threat. 

“Securing our networks from malicious foreign interference is critical to America’s wireless future, especially as some communications providers rely on equipment from companies like Huawei that pose an immense threat to America’s national and economic security,” the bill’s House sponsors, House Energy and Commerce Committee Chairman Frank Pallone Jr. (D-N.J.), ranking member Greg Walden (R-Ore.), and Reps. Doris Matsui (D-Calif.) and Brett Guthrie (R-Ky.), said in a statement.

Senate Commerce Committee Chairman Roger Wicker (R-Miss.), whose committee has made 5G security a priority, praised Trump for signing the bill into law.

“This legislation lays the foundation to help U.S. firms strip out vulnerable equipment and replace it with secure alternatives,” Wicker said in a statement. “Today marks an important victory for our economy and national security.”

The new law marks a major effort to eject Huawei and another Chinese company, ZTE, from U.S. networks. Both were previously designated national security threats by the FCC in November. The FCC also previously voted unanimously to ban the use of FCC funds by groups deemed to be threats.

A spokesperson for Huawei declined to respond to The Hill’s request for comment. The company has repeatedly pushed back against criticism, and is suing the FCC. 

Concerns around Huawei stem from a 2017 Chinese intelligence law that requires companies and citizens to assist in state intelligence work if requested, including sharing data and information. American prosecutors also recently charged Huawei with conspiracy to commit racketeering, which followed previous charges of stealing intellectual property, wire fraud and obstruction of justice.

Huawei is the largest provider of 5G equipment in the world, with no American company currently able to compete. Its two biggest competitors are European groups Nokia and Ericsson. Lawmakers used a recent Senate hearing to explore use equipment from these companies.

The new law will likely have a major impact on rural networks. The Rural Wireless Association (RWA) estimated in 2018 that about 25 percent of its member networks use some equipment from Huawei or ZTE. 

RWA said in a statement following the Senate’s passage of the new law last month that the funds in the bill marked “an important first step in securing the communications network supply chain.” 

Other measures against Huawei have already been taken, including the addition of the group to the Commerce Department’s “entity list” last year, effectively blacklisting Huawei. On Thursday, bipartisan lawmakers in the House and Senate introduced a bill that would add the company to the Treasury Department’s Specially Designated Nationals list and freeze Huawei out of the U.S. financial system.