Chinese telecom giant, big supplier to rural wireless outfits, challenges FCC ban on use of subsidies to buy its goods

A Chinese telecommunications giant filed a legal petition last week challenging the Federal Communications Commission's recent action against the company.

"The FCC last month voted unanimously to designate Huawei Technologies Co. Ltd. and peer ZTE Corp. as national-security risks, barring their U.S. rural carrier customers from tapping an $8.5 billion government fund to purchase Huawei or ZTE telecommunications equipment," David Kirton reports for Reuters. "It also voted to propose requiring carriers remove and replace equipment from Huawei and ZTE in existing networks."

The ban could hurt rural telecom carriers, which rely disproportionately on Huawei and ZTE because their equipment is generally much cheaper than comparable equipment. Huawei spokesperson Karl Song said the FCC rule threatens rural connectivity in the U.S., would cost hundreds of millions of dollars, and could force some small carriers into bankruptcy, Kirton reports.

"Alan Fan, Huawei vice president of IP strategy and international legal policy, said U.S. rural carriers and groups submitted 90 comments to the FCC, 58% of which opposed action against it," Kirton reports.

In May, President Trump banned domestic companies from supplying Huawei with U.S. components without a special license, citing national-security concerns. "The move came after Washington brought criminal charges against Huawei, alleging theft of trade secrets, bank fraud and violation of U.S. sanctions against Iran. It has also sought to convince allies to ban it from the 5G networks over spying fears -- increasing tension with Beijing amid a tit-for-tat trade war," Kirton reports. "The United States is now considering means of stopping more foreign shipments of products with U.S. technology to Huawei."