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US bans Huawei, ZTE telecom equipment on data-security risk

Todd Shields, Bloomberg News on

Published in Business News

Huawei Technologies Co. and ZTE Corp. were banned from selling electronics in the US by regulators who say they pose a security risk, continuing a years-long effort to limit the reach of Chinese telecommunications companies into US networks.

The Federal Communications Commission, in an order released Friday, also named connected-camera providers Hangzhou Hikvision Digital Technology Co. and Dahua Technology Co., as well as two-way radio maker Hytera Communications Corp.

“The FCC is committed to protecting our national security by ensuring that untrustworthy communications equipment is not authorized for use within our borders, and we are continuing that work here,” Chairwoman Jessica Rosenworcel said in a news release. “These new rules are an important part of our ongoing actions to protect the American people from national security threats involving telecommunications.”

In the 4-0 vote, the FCC concluded the products pose a risk to data security. Past efforts to curb Chinese access include export controls to cut off key, sophisticated equipment and software. Recently US officials have weighed restrictions on TikTok over fears Chinese authorities could access US user data via the video sharing app.

‘Culminating action’

“This is a culminating action,” said Klon Kitchen, a senior fellow at the Washington-based American Enterprise Institute, a public-policy think tank. “Things that began under Trump are now being carried out. The Biden administration is continuing to turn the screws on these companies because the threat isn’t changing.”

Huawei declined to comment, while Hikvision didn’t immediately supply a comment after being contacted. Dahua, Hytera and ZTE didn’t respond to emails sent outside normal business hours in China.

The looming FCC move didn’t come up in the bilateral meeting between US President Joe Biden and Chinese President Xi Jinping in Indonesia last week, a U.S. official said, speaking on condition of anonymity. Biden did discuss technology issues more broadly with Xi and was clear that the US will continue to take action to protect its national security, the official said.

 

“This is the death knell for all of them for their US operations,” said Conor Healy, director of government research for the Bethlehem, Pennsylvania-based surveillance research group IPVM. “They won’t be able to introduce any new products into the US.”

Most exposed

Dahua and Hikvision stand to be affected most since their cameras are widely used, often by government agencies with many facilities to monitor, Healy said. Agencies including police also use handheld Hytera radios, he said.

In its order, the FCC also asked for comment on whether to revoke existing equipment authorization, Rosenworcel said in an online statement.

According to Healy, merchants could be stuck with gear that’s illegal to sell.

In 2018, Congress voted to stop federal agencies from buying gear from the five companies named by the FCC. The agency said earlier that the companies aren’t eligible to receive federal subsidies, and also has barred Chinese phone companies from doing business in the US.

The order released Friday was required under a bill Biden signed in November 2021, the agency said.

©2022 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.

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