The US Federal Communications Commission (FCC) has doubled down on its assertion that ZTE is a threat to national security.
The Chinese telecoms equipment manufacturer had filed an appeal against a ruling made in June, but the regulator said there was no reason to reverse its decision.
Although ZTE has no business with any of the major US carriers, several smaller rural operators use the company’s equipment for cost reasons. The Rural Wireless Association, which represents operators with fewer than 100,000 customers, estimates a quarter of its members have Chinese-made kit in their networks
ZTE’s status as a “threatening entity” means US telecom companies and operators are now blocked from accessing the government’s $8.3bn Universal Service Fund to purchase equipment from the company.
Huawei was also given the status of “threatening entity” at the same time and will also be banned from the same programme. The company is also appealing the decision, but its case will be heard separately.
Both companies have denied any allegations of wrongdoing, while the US has yet to provide any evidence to supports its claims. Huawei in particularly has alleged that Washington’s actions are less about security and more about politics given the country’s trade dispute with China.
FCC Chairman Ajit Pai has welcomed the ruling ahead of an FCC vote next month on new rules that will assist operators remove offending equipment from their infrastructure. The US senate has already approved $1 billion in funding for the activity.
“With today’s order, we are taking another important step in our ongoing efforts to protect U.S. communications networks from security risks,” said Ajit Pai.
“At the next Open Meeting on December 10, the Commission will vote on rules to implement the Secure and Trusted Communications Networks Reimbursement program to help carriers remove and replace untrusted equipment from their networks, months before the statutory deadline. Now it is more vital than ever that Congress appropriate funds so that our communications networks are protected from vendors that threaten our national security.”
ZTE has been contacted for comment.