According to the decision of the US Federal Communications Commission (FCC), China’s Huawei Technologies Co. and ZTE Corp. included in the list of companies that threaten the national security of the United States.
First of all, this entails a ban on several transactions with companies for American business: it is impossible to purchase Huawei and ZTE products worth more than $8 billion if the Fund’s funds are used for the development of telecommunications services in rural areas.
“Both Huawei and ZTE have close ties with the Chinese Communist Party and the country’s military authorities. We give a clear signal: the US government and the FCC cannot and will not allow the Chinese Communist party to exploit the vulnerabilities of American telecommunications networks,” Ajit Pai said.
Regional American companies operating in rural areas actively used cheap Huawei and ZTE equipment. Still, after the FCC’s decision, they will have to replace the equipment of Chinese companies in their networks.
In November 2019, FCC members made a preliminary decision to classify Huawei and ZTE as companies that pose a threat to US state security. On June 30, it was approved and took effect immediately.