US telecom agency says it could boost authority over Huawei, ZTE equipment

By David Shepardson

WASHINGTON (Reuters) -Federal Communications Commission Chair Jessica Rosenworcel said on Thursday the agency’s proposal to reinstate net neutrality rules could give it new authority to force the removal of equipment from China-based Huawei and ZTE (HK:) from U.S. networks, including data centers.

The 129-page proposal asks for public input if new rules designed to bar internet service providers from blocking or throttling traffic or offering paid fast lanes would give the FCC “more robust authority to require more entities to remove and replace covered Huawei and ZTE communications equipment and services.”

It also asks if the authority would allow it to prohibit Chinese equipment in any network infrastructure used to route or transmit communications, including data centers and internet exchange facilities.

Huawei and ZTE did not immediately respond to requests for comment.

The FCC in November banned approvals of new telecommunications equipment from Huawei and ZTE, saying they posed “an unacceptable risk” to U.S. national security.

In September 2022, the FCC named Chinese telecom companies Pacific Networks and China Unicom (NYSE:) (Americas) as threats to U.S. national security under a 2019 law aimed at protecting communications networks.

It previously revoked or denied authority to Chinese telecom companies to provide to operate telecommunications in the United States.

The FCC said the net neutrality rules would enhance the agency’s “ability to protect the nation’s communications networks from entities that pose threats to national security.”

Rosenworcel said existing “authority does not cover broadband. This is a national security loophole that needs to be addressed.”

The proposal faces an initial Oct. 19 vote and also asks if the FCC could prohibit internet service providers from entering into traffic exchange arrangements with some companies on national security grounds.

The Chinese embassy in Washington said previously the FCC “abused state power and maliciously attacked Chinese telecom operators again without factual basis.” Huawei has repeatedly denied allegations of wrongdoing and said the U.S. government has “unlawfully and irrationally” targeted the company.

Washington’s efforts to counter the Chinese tech giants come amid U.S. fears that Beijing could use them to spy on Americans. Washington has for years pressured U.S. allies not to use Huawei or ZTE equipment from 5G networks or remove gear from existing networks.

The FCC designated Huawei and ZTE as threats, requiring U.S. carriers to remove their gear or be frozen out of an $8.3 billion government fund to purchase new equipment. However, to fund the so-called “rip and replace” effort, Congress only appropriated $1.9 billion.