A bipartisan Senate bill would direct the Federal Communications Commission not to sign off on any applications from companies on its national security threats list, including Huawei, after one of the commissioners pushed for a bigger crackdown on Chinese Communist Party-linked companies in the United States.
The new legislation, the Secure Equipment Act of 2021, co-sponsored by Republican Sen. Marco Rubio and Democratic Sen. Ed Markey, would mandate that the FCC no longer review or approve business requests from entities on the FCC’s designated list, with the Senate offices saying this would “prevent further integration and sales” of Huawei and other Chinese state-backed firms inside the U.S. “regardless of whether federal funds are involved.”
The FCC adopted new rules last year, telling U.S. telecom carriers to “rip and replace” equipment provided by Chinese telecom giants such as Huawei and ZTE if the equipment was purchased with federal funding and banned U.S. taxpayer dollars from subsidizing this Chinese equipment, but “the very same equipment can still be used if purchased with private or non-federal government dollars” — so the proposed law “closes this national security loophole” that currently exists.
“Chinese state-directed companies like Huawei and ZTE pose a serious risk to our national security,” Rubio said Monday. “The Chinese Communist Party subsidizes these companies and exploits loopholes in our laws to allow malicious actors to sell compromised equipment and services in the U.S. The status quo is dangerous, and we need to act now to strengthen our national security and protect our critical infrastructure.”
The language for the Secure Equipment Act of 2021 says it aims to ensure the FCC “does not approve radio frequency devices that pose a national security risk” and directs the FCC to “initiate rulemaking to clarify that the Commission will no longer review or approve any application for equipment authorization for equipment that is on the list of covered communications equipment or services.”
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“In today’s increasingly connected world, we must animate our technology with our values, especially in the 5G networks that are critical to our future economic prosperity,” Markey said this week. “That’s why our bipartisan legislation will make sure all of our devices and equipment are safe for consumers and secure for the United States. I’m proud to partner with Senator Rubio on this commonsense proposal and I look forward to fighting together for its swift passage.”
The FCC’s Public Safety and Homeland Security Bureau released a list in March of Chinese communication companies “that have been deemed a threat to national security” that included Huawei and other companies, which the FCC said all “produce telecommunications equipment and services that have been found to pose an unacceptable risk to U.S. national security or the security and safety of U.S. persons.” The blacklist, which also extends to subsidiaries and affiliates of the Chinese firms, was created in accordance with the Secure Networks Act, which passed last year.
FCC Commissioner Brendan Carr spoke at the Center for Strategic and International Studies on the issue in March, arguing: “It is time to close this glaring loophole … Once we have determined that Huawei or other gear poses an unacceptable national security risk, it makes no sense to allow that exact same equipment to be purchased and inserted into our communications networks as long as federal dollars are not involved.” Carr, the top Republican in the FCC, added, “The presence of these insecure devices in our networks is the threat, not the source of funding used to purchase them. Yet the FCC, through its equipment authorization process, continues to approve for use in the U.S. thousands of applications from Huawei and other entities deemed national security threats. The FCC should move swiftly to eliminate Communist China’s backdoor into our networks.”
The Justice Department and U.S. intelligence agencies believe that Huawei and other Chinese companies are working hand in hand with the Chinese Communist Party, potentially giving it access to hardware and networks around the world.
The FCC initially designated Huawei and ZTE as “national security threats” last summer, banning the two from accessing U.S. government subsidies to build communication infrastructure. The FCC noted then that the companies would now fall under the FCC’s November 2019 rule that bans the “purchase of equipment or services from companies posing a national security threat.” The FCC said that government subsidies from its $8.3 billion annual Universal Service Fund “may no longer be used to purchase, obtain, maintain, improve, modify, or otherwise support any equipment or services produced or provided by” Huawei or ZTE. The new law would push the FCC even further.
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Huawei filed an appeal earlier this year with the U.S. Court of Appeals for the 5th Circuit in an effort to push back against the FCC designating the Chinese telecommunications company as a national security threat.
“I applaud Senator Rubio and Senator Markey for their leadership and bold action,” Carr said Monday. “Their legislation would strengthen our national security by ensuring that we close the loophole that Huawei and others are using right now despite our determination that their gear poses an unacceptable risk to our national security.”
