BEIJING (dpa-AFX) - The U.S. Federal Communications Commission or FCC plans to vote on a proposal in November to designate China's Huawei Technologies Co. and ZTE Corp. as national security risks. If implemented, this will bar communications companies in the U.S. from utilizing an $8.5 billion FCC fund to buy equipment or services from the Chinese companies.
The FCC plans to propose requiring the carriers to remove and replace existing equipment and services from the designated companies from their networks. The telecommunications regulator said it will seek comments on how to provide financial assistance to these carriers to help them transition to more trusted suppliers.
According to the FCC, the two-part proposal would help safeguard the nation's communications networks from security threats. The Commission will vote on this proposal at its November 19 meeting.
'As the United States upgrades its networks to the next generation of wireless technologies-5G-we cannot ignore the risk that that the Chinese government will seek to exploit network vulnerabilities in order to engage in espionage, insert malware and viruses, and otherwise compromise our critical communications networks,' FCC Chairman Ajit Pai said.
Huawei, the world's largest telecom equipment maker, and ZTE will have 30 days to contest the FCC's national security risk designation.
The U.S. intelligence agencies are concerned that Huawei and other Chinese companies may be beholden to the Chinese government or the ruling Communist Party, raising the risk of espionage.
Huawei and ZTE are major players in the 5G market as they manufacture and sell telecom equipment for 5G networks at competitive prices.
In March 2018, Pai had proposed to bar companies that posed a national security risk from receiving funds from the FCC's $8.5 billion Universal Service Fund or USF, but did not name either Huawei or ZTE.
U.S. President Donald Trump signed an executive order in May declaring a national emergency to protect U.S. computer networks from attack by 'foreign adversaries.' The U.S. Commerce Department added Huawei to its 'Entity List', which banned the Chinese company from buying components and technology from U.S. firms without prior approval from the U.S. government.
The Trump administration had blacklisted Huawei in May on national security grounds, with the ban primarily aimed at keeping equipment made by the Chinese company out of the 5G network in the U.S.
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