FCC rejects Huawei appeal of national security threat designation

The Federal Communications Commission (FCC) on Thursday unanimously rejected Chinese telecommunications giant Huawei’s request to reconsider the agency’s designation of the group as a national security threat.

The decision came months after the FCC formally adopted the designation, banning U.S. telecom companies from using money in the FCC’s $8.3 billion Universal Service Fund to purchase equipment from the group, which is one of the largest 5G equipment manufacturers in the world. 

“Huawei has a long and well-documented history of close ties to the Chinese military and intelligence communities, as well as the Chinese Communist Party, at every level of the company all the way up to its founder, compelling Huawei’s assistance and cooperation with the Chinese intelligence services and forbidding the disclosure of that assistance,” FCC Chairman Ajit Pai, a Republican, said during agency’s monthly meeting on Thursday. 

He noted that the FCC’s decision to reject Huawei’s request would “have a direct and positive impact on the security and integrity of America’s networks.”

The decision also comes a month after the agency also  rejected Chinese telecom group ZTE’s request to have its national security threat designation removed. 

Both Huawei and ZTE are groups the Trump administration and bipartisan members of Congress have increasingly pushed back against, citing concerns around potential ties to the Chinese government and intelligence operations. The companies are both on the Commerce Department’s “entity list,” which means U.S. companies may not do business with them.

A spokesperson for Huawei told The Hill on Thursday that the company is “disappointed with the FCC’s decision to force removal of our products from telecommunications networks. This overreach puts U.S. citizens at risk in the largely underserved rural areas – during a pandemic – when reliable communication is essential.”

Both Huawei and ZTE have pushed back against concerns. Huawei is currently fighting back in court against the national security threat designation. 

The FCC also unanimously approved a measure on Thursday requiring telecom groups to rip out and replace equipment deemed potentially suspect, and voted to establish a reimbursement program to assist in this effort.

The vote was taken in order to implement the Secure and Trusted Communications Act, a bipartisan bill that President Trump signed into law in March, which was designed to push back against Huawei and ZTE. 

The new law requires the FCC to establish a $1 billion fund to help smaller telecom groups rip out and replace potentially suspect equipment, and requires that the agency compile a list of companies that may pose a risk to national security. 

Once Congress provides funding for the reimbursement program, which both the FCC and bipartisan lawmakers have urged in recent weeks, equipment from companies on the list must be removed and disposed of. U.S. telecom groups participating in ripping out and replacing this equipment are required to report the progress of these activities to the FCC.

The FCC estimated in September that the funds necessary to reimburse U.S. telecom groups for ripping out and replacing suspect equipment could total to $1.6 billion, much more than the new law called for. 

“We can’t actually implement the reimbursement program unless and until Congress appropriates the necessary funding, something I have called for for many months,” Pai said. “Fully funding this program is essential to protecting the integrity of communications infrastructure and protecting the future viability of the digital economy at large.”

Democratic members of the FCC also agreed with the moves by the FCC on Thursday in order to combat potential threats from Huawei and ZTE. 

“China is playing the long game…it could put itself in a position to gather intelligence, steal intellectual property, and bring down regional communications in times of crisis, and despite our efforts here, the Chinese government is still actively consolidating its global 5G authority,” FCC Commissioner Jessica Rosenworcel, a Democrat, said during the meeting. 

“It means what we do here, banning two vendors and removing their equipment from our nation’s networks is a start, but it’s not enough,” she added. “The United States needs a more comprehensive approach to secure 5G both at home and abroad.”

Securing U.S. telecom networks against potential foreign threats has been a rare area of bipartisan agreement on Capitol Hill during the Trump administration. 

The House last month unanimously approved legislation that would appropriate $750 million towards building out 5G networks in the U.S. and combating threats from foreign-made equipment. 

Earlier this week, a bipartisan group of senators led by Senate Commerce Committee Chairman Roger Wicker (R-Miss.) sent a letter to Senate leaders urging them to include funding for the reimbursement program for ripping out and replacing suspect equipment in the upcoming 2021 appropriations package. 

“This is a national security imperative,” the lawmakers wrote. “Fully funding this program is essential to protecting the integrity of our communications infrastructure and the future viability of our digital economy at large.”

-Updated at 6:55 p.m.