The FCC has formally designated Huawei and ZTE as national security threats, meaning telecoms can no longer use the FCC’s Universal Service Fund to purchase equipment or services from them, under a rule put into place in November. The USF provides over $8.5 billion a year in subsidies to help telecoms improve broadband to rural Americans that currently lack access. “Both companies have close ties to the Chinese Communist Party and China’s military apparatus, and both companies are broadly subject to Chinese law obligating them to cooperate with the country’s intelligence services,” stated FCC chair Ajit Pai. The agency also cited actions by Congress, the executive branch, the intelligence community, U.S. allies, and telecoms in other countries to support this designation.
