The Federal Communications Commission has banned Huawei and the ZTE Coroporation from receiving federal funds because of the companies’ ties to the Chinese government.
The ban prevents both companies from drawing on the FCC’s Universal Service Fund, an $8.3 billion fund paid for by Americans via phone bill fees.
“The [FCC] has designated Huawei and ZTE as national security risks to America’s communications networks–and to our 5G future,” FCC chairman Ajit Pai said in a statement. “We cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our critical communications infrastructure.”
Both companies have been criticized by the U.S. for sharing data and information with the Chinese Communist Party. U.S. Secretary of State Mike Pompeo has repeatedly urged allies including Germany and the U.K. not to allow Huawei to develop local 5G networks. Additionally, Pentagon Defense Innovation Board chairman Eric Schmidt, a former CEO of Google, has said Huawei can essentially act as “signals intelligence” for the CCP.
“The CCP has gained footholds in countries around the world with Huawei and ZTE under the premise that they are independent companies,” Senator Ben Sasse (R., Neb.) said in a statement. “The United States will not put US dollars in the communists’ pockets and today’s decision shows that. This is good for our national security and for our shared fight against China becoming the world’s leading superpower.”