Pierluigi Paganini November 25, 2019

U.S. Federal Communications Commission has cut off government funding for equipment from Huawei and ZTE due to security concerns.

U.S. Federal Communications Commission has cut off government funding for equipment from the Chinese companies Huawei and ZTE due to security concerns. The Federal Communications Commission is also requesting to the government to assign subsidies to the American companies that will replace any equipment from the Chinese firms that they already have in place.

“The FCC voted unanimously Friday to bar U.S. telecommunications providers from using government subsidies to buy equipment from Huawei or ZTE. The FCC’s order mostly affects small, rural companies, as larger U.S. carriers do not use equipment from those Chinese companies.” reads the post published by the Associated Press.

Huawei regrets the proposal and asked the FCC to reconsider it, the company explained that the decision was “based on selective information, innuendo, and mistaken assumptions” and that “these unwarranted actions will have profound negative effects on connectivity for Americans in rural and underserved areas across the United States.”

At the end of October, the Federal Communications Commission proposed cutting off funds for Chinese telecom equipment from Huawei and ZTE.

The Commission announced that he was going to evaluate the impact of the replacement of the Chinese equipment with the ones of other vendors. Congress in the past has already proposed setting huge funds to rip out the Chinese equipment.

“The government is seeking comments on how it can help companies financially if they have to do that. Bills in Congress have proposed setting $700 million to $1 billion aside for telecom companies to replace their networks.” reads a post published by the Associated Press.

Anyway, the economic impact of the replacement could be greater than initial thought, the AP Agency reports the case of a trade group for small rural wireless carriers that would spend up to $1 billion for its dozen companies to replace the Huawei and ZTE equipment.

Currently, Huawei has tens of customers in the U.S. this means that the economic impact on US telecommunication firms could be severe.

The trade group for small rural wireless carriers believes that the subsidies proposed by the FCC will allow its companies to replace any banned equipment from the Chinese companies.

The opinion of Huawei is different, according to a statement issued by the company the lack of funding would hurt rural and disadvantaged communities.

“Without access to those solutions, these carriers will lose their ability to provide reliable and high-speed telecommunications and internet services,” reads the statement. “Rural schools, hospitals, and libraries will feel the effects. And, due to reduced competition in the market for telecommunications equipment, particularly in cutting-edge 5G networks, all Americans will pay higher prices for these critical services.”

Huawei confirmed its intent to work with the FCC to help its experts to dispel any doubts about the risks associated with using its equipment.

The Chinese giant Huawei was already excluded by several countries from building their 5G internet networks. The United States, Australia, New Zealand, Romania, and Japan announced the exclusion of Huawei technology for their 5G internet networks.

In April 2018, the UK GCHQ intelligence agency warned UK telcos firms of the risks of using ZTE equipment and services for their infrastructure.

In December 2018, a Czech cyber-security agency is warned against using Huawei and ZTE technologies because they pose a threat to state security.

Commissioner Jessica Rosenworcel, a Democrat representative, praised the FCC’s move but remarked the urgency for a “coordinated national plan” for securing 5G cellular networks.

Pierluigi Paganini

(SecurityAffairs – Federal Communications Commission, espionage)

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