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Huawei and ZTE dealt major blow as FCC moves to ban them from $8.5bn fund

The FCC’s proposal was announced on Monday in Washington, and the vote will take place next month.

October 29, 2019 / 06:19 PM IST
Representative image

Representative image

Huawei recently re-established its place as the brand with the second-highest number of smartphones shipped. However, the company has been dealt with yet another major blow by the United States Government as a result of the US and China trade war. The setback comes in the form of FCC wanting to place more restrictions on the Chinese tech giant.

The US Federal Communications Commission will vote on an order to ban companies that receive government subsidies from purchasing services or equipment from prominent Chinese tech firms ZTE and Huawei. The FCC’s proposal was announced on Monday in Washington, and the vote will take place next month.

The proposal for the ban comes as politicians in Washington D.C. continue to scrutinise American companies that do business in China.

During the announcement, FCC Chairman Ajit Pai said; “The concern is that hostile foreign actors could use hidden ‘backdoors’ to our networks to spy on us, steal from us, harm us with malware and viruses, or otherwise exploit our networks. And there are mounting reasons to believe that the Chinese firms Huawei and ZTE pose an unacceptable risk to U.S. national security.”

The vote will be the latest move in a growing list of restrictions U.S. government agencies are placing on Huawei intending to curb global expansion. Huawei is the second-largest smartphone brand and the world's biggest telecommunications equipment maker. Huawei is a world leader in 5G technology equipment.

According to the Wall Street Journal, both Huawei and ZTE would be designated at national security threats and would be barred from participating in an $8.5 billion annual federal fund designated to expand rural internet access. The vote will be cast on November 19th and could go into effect in 30 days, unless the two firms contest it, which could take the timeline to 120 days.

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Tags: #Huawei
first published: Oct 29, 2019 06:19 pm
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