US companies are forbidden from tapping into the FCC’s $8.3 billion Universal Service Fund to purchase Huawei and ZTE goods and services under the ban, which was issued on Tuesday, according to RT.
“Both companies have close ties to the Chinese Communist Party and China’s military apparatus,” FCC chair Ajit Pai announced in a statement, “and both companies are broadly subject to Chinese law obligating them to cooperate with the country’s intelligence services.”
While Pai cited “the overwhelming weight of evidence” to support the FCC’s move, US intelligence agencies’ claims that Chinese telecom equipment is riddled with backdoors funneling sensitive data back to Beijing have yet to be supported with evidence.
Huawei has been repeatedly banned and blacklisted by the US government, which has also pressured allies including the UK and Germany to bar the market-dominating Chinese firm from their nascent 5G infrastructure. The company was placed on Washington’s “Entity List” last year, barring US firms from doing business with it without special permission.
However, earlier this month, the US actually eased restrictions on Huawei, allowing American companies to work together with the Chinese firm to set standards for 5G networks.
Much to Washington’s chagrin, Huawei remains the leader in global 5G technology. However, the administration of President Donald Trump has reportedly been holding talks with US tech and private equity firms in an effort to wrest dominance of the new technology out of Beijing’s control, floating possibilities including a government-backed consortium buying a controlling stake in Nokia or Ericsson - the two non-Chinese companies rounding out the top four 5G providers.