US Telecom Regulator Designates China’s Huawei, ZTE as National Security ThreatsHuawei pavilion at the CES 2018 expo in Las Vegas Nevada (David Becker/Getty Images)

The Federal Communications Commission (FCC), the nodal agency of the United States government that regulates interstate and international communications by radio, television, wire, satellite and cable across the country, announced that it is designating Chinese companies Huawei Technologies Co. and ZTE Corp. as national security threats.

The order will now bar U.S. firms from tapping an $8.3 billion government fund to purchase equipment from these companies and is seen as a step towards blocking the Chinese manufacturers from accessing the U.S. market where small rural carriers rely on their cheap network equipment.

As a result of today’s order , funds from FCC’s Universal Service Fund may no longer be used to purchase, obtain, maintain, improve, modify, or otherwise support any equipment or services produced

“We cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our critical communications infrastructure,” FCC Chairman Ajit Pai said in a statement Tuesday.

In the order, the Commission identified Huawei as posing a particular threat to U.S. national security interests based on its substantial ties to the Chinese government and military apparatus, as well as Chinese laws obligating it to cooperate with any Chinese government request to use or access its systems for intelligence and surveillance.

In the order, FCC observed

“ We find that Huawei is susceptible to coercion, both legal and political, and this presents profound risks to the security of our nation’s communications networks. We find that Huawei’s close ties to the Chinese government, both at the level of ownership and at the employee level, as well as its obligations under Chinese law, present far too great a risk to U.S. national security to continue to subsidize the use of Huawei equipment and services. The record of this proceeding confirms the conclusion of a recent U.S. national security advisor concerning Huawei “and its role in China’s security apparatus” and specifically “the grave national security danger associated with a wide array of Huawei’s telecommunications equipment. “

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