FCC Chairman Ajit Pai announced that he is circulating an order that would prohibit the use of Universal Service Fund (USF) dollars to purchase equipment or services from any company—like Huawei—that poses a national security threat.
Importantly, however, he’s also proposing that the commission initiate a process to remove and replace existing Huawei gear. Some rural wireless carriers that receive USF funds already have installed Chinese equipment, and the chairman’s plan calls for first assessing exactly how much equipment from Huawei and ZTE exist in these networks and then figuring out financial assistance to help the carriers transition to other vendors.
“We’ll seek public input on how big this ‘rip and replace’ program needs to be and how best to finance it,” he said in a blog. “I hope that my colleagues will join me in voting for these important steps to protect our national security at our November 19 meeting.”
He also explained it in a commentary that ran in the Wall Street Journal, where he noted recent incidents involving the National Basketball Association, Apple and others, where Americans have become more aware of how the Chinese government uses its influence over global commerce. “Imagine what could happen if we let Chinese equipment into tomorrow’s 5G wireless networks. It would open the door to censorship, surveillance, espionage and other harms,” he said.
The Republican chairman would seem to have support here from his Democratic colleagues on the commission. Commissioner Geoffrey Starks earlier this year called for the U.S. government to address the fact that many existing 4G wireless networks are currently using Huawei equipment. He said the FCC should identify Huawei gear in use in U.S. networks, and that the government should help carriers remove and replace that equipment.
Commissioner Jessica Rosenworcel, the other Democrat on the commission, issued a statement today noting that the FCC is moving forward after more than a year and a half with its initial proposal to ensure that the USF will not be used to purchase insecure network equipment, but she indicated that she wants to see more being done.
“We need cybersecurity policies that target all our network providers—not just our universal service recipients,” she said in the statement. “In addition, we need to be mindful that in a global economy, our networks will still connect to insecure equipment abroad. So we should start researching how we can build networks that can withstand connection to equipment vulnerabilities around the world, including virtualizing the radio access part of our networks.”
Last year, the FCC voted on a Notice of Proposed Rulemaking (NPRM) that sought comment on a proposal to prohibit use of USF funds on the purchase of equipment or services from any company that poses a national security threat to the integrity of U.S. communications networks or the communications supply chain. A number of issues were the subject of that NPRM.
The draft Report and Order circulating this week goes further and would bar communications companies from using any support they receive from the FCC’s USF to purchase equipment or services from companies posing a national security threat—Huawei and ZTE are named specifically. The draft order also would establish a process for designating other suppliers that pose a national security threat.
In addition, a draft Further Notice of Proposed Rulemaking would propose requiring certain carriers receiving USF funds, known as eligible telecommunications carriers, to remove existing equipment and services from designated companies from their networks and seek comment on how to provide financial assistance to these carriers to help them transition to more trusted suppliers. The draft item would adopt an information collection system to help assess the extent to which eligible telecommunications carriers have deployed Huawei and ZTE equipment in their networks as well as the costs to remove and replace it.
A Huawei spokesperson said that in 30 years of business, Huawei has never had a major security-related incident in the 170 countries it operates. The company supplies more than 500 network operators around the world.
"Banning specific vendors based on country origin will do nothing to protect America’s telecommunications networks," Huawei said in a statement provided to Fierce. The proposal released by the FCC chairman "only impacts the broadband providers in the most unserved or underserved rural areas of the United States." Such action will further widen the digital divide, slowing the pace of economic development without further securing the nation’s telecom networks, according to Huawei.
"The FCC is aware of alternative measures that could solve both issues - continuing to enhance connectivity in those areas while actually improving the security of U.S. networks – but Chairman Pai is choosing to also ignore what is considered best practices around the globe," the company added. "Huawei remains open to engage with the US government and policy makers to find a productive solution to safeguard the U.S. telecommunications system."
Article updated Oct. 29 with statement from Huawei.