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International Relations

US to bar telecom equipment from Huawei and ZTE

Spying concerns cited by FCC are likely to inflame trade tensions with Beijing

  © Reuters

WASHINGTON -- The U.S. Federal Communications Commission announced on Tuesday a ban on U.S. telecom companies buying communications equipment from foreign companies that present a security risk, with a high-ranking FCC official saying Huawei Technologies and ZTE are potential targets in the crackdown.

The companies subject to the ban have not been determined yet, but the two Chinese manufacturers are expected to be on the list. The FCC is concerned that equipment from some Chinese companies could be used for espionage. The move is likely to add to trade friction between the U.S. and China.

The new regulations, passed unanimously by the FCC's five commissioners, prohibit U.S. telecom companies that receive subsidies from the regulator from buying products from foreign companies deemed a security threat. The subsidies are granted for construction of communication lines across the U.S.

The FCC will solicit comment from companies and the public to determine which suppliers and products will be subject to restrictions. The regulations will be introduced later.

Congress in 2012 urged American companies not to use communications equipment from Huawei and ZTE, fearing that such gear could be used by the Chinese government to spy on the U.S. The Defense Department has already been banned from buying from the two companies.

Big U.S. telecom providers such as AT&T typically avoid products made by Huawei and other Chinese manufacturers. The latest decision is more likely to affect smaller peers in rural areas that tend to rely on cheaper Chinese products.

The Trump administration and Congress have become increasingly worried about the potential national security threat posed by Chinese information technology companies.

The Commerce Department said Monday that it will impose a seven-year ban on ZTE doing business with U.S. companies. ZTE was found to have illegally exported U.S. products to Iran and North Korea.

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