U.S. Government to Carriers: You Want Federal Funds? Better Ditch Huawei.
FCC chairman Ajit Pai is proposing eliminating government subsidies for U.S. telecom carriers that buy from suppliers that could pose a national security risk.
Huawei is not getting any love from the Trump administration. FCC Chairman Ajit Pai on Monday proposed eliminating a government subsidy for any U.S. telecom carrier that buys from the Chinese company.
The subsidies draw from the Universal Service Fund, an $8.5 billion FCC fund designed to connect low-income areas, schools and libraries to the internet. Pai's proposal seeks to bar the money from going to equipment suppliers declared a "national security threat."
The chairman's proposal doesn't identify Huawei by name. But in a blog post, Pai referenced growing Congressional concerns over "certain Chinese communication equipment providers" posing a national security risk to the U.S.
"Hidden 'back doors' to our networks in routers, switches -- and virtually any other type of telecommunications equipment -- can provide an avenue for hostile governments to inject viruses, launch denial-of-service attacks, steal data, and more," Pai said in a separate statement.
In December, 18 lawmakers also sent a letter to the FCC chairman, which raised concerns about "Chinese espionage in general and Huawei's role in that espionage in particular."
Last week, Pai responded to the lawmakers, saying he shared their concerns. "I intend to take proactive steps to help ensure the integrity of the communications supply chain," he wrote.
Pai's proposal, which goes up for vote next month, risks limiting U.S. business for both Huawei and another Chinese supplier, ZTE. In addition to selling smartphones, the two companies also develop equipment that can power cellular networks.
However, U.S. officials worry that same technology can be used for state-sponsored spying. In 2012, a Congressional committee declared both Huawei and ZTE a security threat over their suspected ties to the Chinese government.
Both Huawei and ZTE reject the spying allegations; neither have responded to Pai's announcement.
The proposal comes as AT&T, Verizon and Best Buy have all reportedly stopped selling Huawei phones. In its defense, Huawei has said its phones have been built with the best security practices in mind and use Google's Android OS.
Entrepreneur Editors' Picks
Crypto Doesn't Have to Be Serious. Just Ask This Comedian Who Organized a Conference About Failure in the Industry.
Want to Succeed? Turn Your Fixed Mindset Into a Growth Mindset.
Google's CEO Is Asking Employees 3 Simple Questions to Boost Productivity
'Greatest Storyteller Wins.' Katy Perry on the Surprising Link Between Pop Stardom and Entrepreneurship.
The 5 Personalities You Meet in a Coworking Space
'Man's Best Friend' — and Investment: The Thriving Industry of Pet-Related Franchising