Huawei is suing the US regulator’s decision to classify the Chinese telecommunications giant as a national security risk. With this “arbitrary” decision, the FCC not only exceeded its competences, but also violated federal law and the constitution, argued Huawei in the complaint filed in a federal court in New Orleans on Monday.
In June last year, the Federal Communications Commission (FCC) officially declared the Chinese equipment manufacturers Huawei and ZTE a security risk. This means that the two providers belong to the group of untrustworthy companies who are denied access to state subsidies. US network operators are not allowed to use technology from Huawei and ZTE if they fall back on federal funds for expansion.
Above all, this has consequences for smaller regional carriers in the USA, which were the only ones still using Huawei technology. For the network expansion in sparsely populated, rural regions, they fall back on funding from the federal government. Washington is providing around 8.3 billion US dollars with the Universal Services Fund for infrastructure expansion. In addition, the FCC has issued new rules with which carriers should be forced to exchange Chinese network technology.
Huawei filed a complaint against the FCC’s measure, which the authority rejected in December 2020, citing the “overwhelming evidence”. Huawei was exposed to direct pressure from the Chinese government to take part in espionage activities, it said. In addition, Huawei’s relations with the military were a risk. The vote of the five members of the FCC’s top committee was unanimous across party lines.
The FCC cannot provide any substantial evidence for these allegations, Huawei counters in its lawsuit. The company always rejects the allegations discussed in Europe with regard to relations with the Chinese government and alleged back doors. The agency defended its decision against the US media. It is based on evidence gathered by the FCC and various US security agencies, the FCC said. “We are still behind this decision.”
Meanwhile, it is unclear whether the new US administration under Joe Biden will maintain the tightened pace of the previous administration. The Republican FCC chairman Ajit Pai has resigned with the change of government. Biden will nominate a successor in good time, speculation is already going on in Washington and the list of possible candidates is not very short. Until then, the Democratic Commissioner Jessica Rosenworcel, who is also one of the candidates, will manage the business.
What is Biden doing?
There have been no signals from Biden’s environment recently that something could change significantly in US policy with regard to Huawei and ZTE. The trade minister-designate Gina Raimondo had put a damper on hopes that under US President Joe Biden, for example, trade restrictions could be relaxed. The President’s chief economic adviser had previously emphasized at CES that the new administration would concentrate on strengthening the US economy in strategic competition with China.
Nevertheless, Huawei hopes for a relaxation. “I hope that the new US administration will bring about more open policies that would be in the interests of US companies and the US economy as a whole,” CEO Ren Zhengfei told journalists in Taiyuan, China, on Tuesday. The Huawei founder has repeated the offer to disclose its 5G technology and make it available to a US company. “I mean what I say,” Ren pointed out. “But no US company came forward.”
Ren also referred to the mutual economic benefit of the withdrawal of the trade restrictions. “Allowing US companies to supply Chinese customers again will benefit their earnings,” said Ren. “If Huawei expands its capacities, US companies can sell us more. It’s a win-win situation. I believe that the US government will weigh and balance these interests in its political decisions.”
Under Biden’s predecessor Donald Trump, the US government tightened its pace in the conflict with China and imposed sanctions on companies such as Huawei, ZTE and, most recently, Xiaomi. US companies are no longer allowed to supply the Chinese tech companies, but they are dependent on US technology for their own production. For example, TSMC is no longer allowed to manufacture HiSilicon chips for Huawei because US technology is used in the production process.