Domestic pressures will dominate US president-elect’s first few months, but the China trade war will loom.
The United States Federal Communications Commission (FCC) has rejected a petition from ZTE Corp asking the agency to reconsider its decision designating the Chinese company as a US national security threat to communications networks.
The FCC announced in June it had formally designated China’s Huawei Technologies Co and ZTE as threats, a declaration that bars US firms from tapping an $8.3bn government fund to buy equipment from the companies.
The federal subsidies help many small rural carriers fund the acquisition and maintenance of equipment made by the companies.
The FCC has said ZTE and Huawei pose a risk of espionage, an allegation each company denies. The agency has increasingly scrutinised Chinese companies amid tensions between Beijing and Washington over trade, the coronavirus and security issues.
In May 2019, President Donald Trump signed an executive order barring US companies from using telecommunications equipment made by companies posing national security risks and the administration added Huawei to its trade blacklist.
FCC Chairman Ajit Pai in an emailed statement called Tuesday’s rejection of ZTE’s request “another important step in our ongoing efforts to protect US communications networks from security risks.”
ZTE did not immediately respond to a request by the Reuters news agency for comment, but said after the June ruling that it supplies safe and secure equipment and is “clearly and fully dedicated to complying with all applicable laws in the United States”.
Huawei was not mentioned in the FCC’s news release.
Last week, the FCC said it was extending the time frame to respond to Huawei’s petition until December 11 “to fully and adequately consider the voluminous record”.
The FCC on December 10 will vote on how to help US telecommunications carriers remove and replace equipment from companies posing security risks from networks. Pai pushed for government support for US firms affected by the rulings barring dealings with the Chinese tech giants.
“Now it is more vital than ever that Congress appropriate funds so that our communications networks are protected from vendors that threaten our national security,” Pai said in the news release.
Pai said last week the commission will take up two unspecified national security matters at its December 10 meeting. In April, the FCC disclosed it might shut down the US operations of three state-controlled Chinese telecommunications companies: China Telecom, China Unicom and Pacific Networks Corp and its subsidiary ComNet (USA).
Last week, the FCC said it was reclaiming International Signaling Point Codes assigned to China Telecom (Americas), saying it had determined “the three codes are no longer in use.” China Telecom did not immediately comment.
The nearly 20-year-old authorisations allow Chinese telecom companies to provide interconnection services for phone calls between the US and other countries.
Last month, the FCC asked the Department of Justice to weigh in on whether China Unicom’s US operations pose security risks.
In May 2019, the FCC voted unanimously to deny another state-owned Chinese telecommunications company, China Mobile, the right to provide US services, citing concerns China could use the approval to conduct espionage against the US government.