US FCC to Label Huawei a ‘Security Risk’ During November Meeting

The US Federal Communications Commission has announced that it plans to vote in November to designate both Huawei and ZTE (SHE:000063) a "security risk" which would bar telecoms from using the Commission's Universal Service Fund to purchase equipment from these two companies.

“When it comes to 5G and America’s security, we can’t afford to take a risk and hope for the best," FCC Chairman Ajit Pai said in a statement. "As the United States upgrades its networks to the next generation of wireless technologies - 5G - we cannot ignore the risk 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."

Should the vote result in the two companies being labelled a security risk, they would have 30 days to file an appeal.

The Universal Service Fund is designed to subsidize the implementation of broadband and 4G/5G services into rural and hard to reach areas to ensure that they have a modern, baseline level of service. Some rural providers have already implemented Huawei equipment, the US government has already made available a $1 billion fund to bankroll the replacement of this gear.

Where's the Evidence Part 2435521135598

Huawei, for its part, argues that this move by the FCC won't be very productive: “Such action will further widen the digital divide; slowing the pace of economic development without further securing the Nation’s telecommunications networks.”

As usual, there's one thing missing from the US' argument against Huawei -- evidence. As we've documented before, the argument that the US is presenting in public about Huawei just doesn't hold up to scrutiny: The law that the US argues would compel Huawei to assist Chinese intelligence in eavesdropping isn't exactly worded as the US claims; US competitors Huawei are subsidized to a similar extent as Huawei (even more so now). The only part of the argument that holds up is the ownership structure, as there's evidence, though not compelling, that Huawei isn't an employee-owned firm as it claims. However, any suspicion on this could be easily cleared if there was more transparency on Huawei's part.

It also doesn't help when the head of a consulting group disguising themselves as lobbyists-slash-think tanks that are looking to ban Huawei is also on the board of a company selling offensive hacking tools.

What the US does have over Huawei is the fact that the company has been caught red-handed flouting US sanctions on Iran, though there are plenty of other companies that have also run afoul of these laws.

Perhaps when the FCC is in the process of deliberating before its vote, evidence may be released that finally puts this issue to rest, and outlines why Huawei is the security threat everyone claims it is. Though that might just be wishful thinking.

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