FCC 5G Supply Chain Rules OK'd 5-0; Ban Imposed on Huawei, ZTE
The FCC approved national security supply chain rules Friday, barring equipment from Chinese vendors Huawei and ZTE from networks funded by the USF and establishing rules that could block other providers (see 1910290054). Commissioner Mike O’Rielly voted yes, with reservations. Commissioner Jessica Rosenworcel said the FCC needs to do more and should have acted more quickly. Commissioner Geoffrey Starks said smaller carriers using USF should be reimbursed for ripping Chinese gear out of their networks. Officials acknowledged the item got late changes sought by commissioners (see 1911200030).
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We don’t know all the applications that are on the horizon, but they must be secure, said O’Rielly. He acknowledged reservations about whether innocent companies could be harmed. He has no sympathy for Huawei and ZTE. “Sometimes, innocent companies can be implicated by mistake and we must get these decisions right,” he said. O’Rielly isn’t “that comfortable” delegating decisions to staff and was disappointed by the cost-benefit analysis offered: “I fear we are underestimating the costs.”
The U.S. needs a coordinated plan for managing 5G security, and the evidence is it doesn’t have one, Rosenworcel said. “It should not have taken us 18 months to reach the conclusion that federal funds should not be used to purchase equipment that undermines national security,” she said: “We do not have a coordinated national strategy in place for 5G.” Don’t trade away security as part of trade talks, a danger under President Donald Trump, she said.
Rosenworcel noted the item changed based on her proposed edits. That including language exploring authority over carriers under the Communications Assistance for Law Enforcement Act to expand the prohibition beyond just the USF.
Starks said smaller providers should be reimbursed. He has focused on security since joining the FCC (see 1911210018). “They’re concerned that they’ll be punished for using Chinese equipment in their networks that they bought lawfully and in good faith, in many cases before the full strength of our concerns about network vulnerabilities linked to Chinese telecoms manufacturing surfaced,” he said.
Starks wants an FCC National Security Task Force and said the FCC should encourage U.S companies to build 5G equipment. “We cannot entrust the technological solutions to the challenges of 5G to geopolitical rivals,” he said. Starks raised concerns about an undersea cable application from U.S. companies that partnered with Dr. Peng Telecom & Media, a Chinese conglomerate, for a Los Angeles-Hong Kong cable.
“Given the threats posed by Huawei and ZTE to America’s security and our 5G future, this FCC will not sit idly by and hope for the best,” said Chairman Ajit Pai.
“Everything we do in modern society now runs on interconnected networks" and "this will become only more so as carriers continue to build out 5G networks,” said Commissioner Brendan Carr: “If these networks are threatened, everything we have come to rely on is threatened.” Carr didn’t have reservations. “With the ever-increasing sophistication of cyberattacks and the fact that attacks from state actors are by far the most well-funded and advanced, it’s not hard to see the threat that these companies like Huawei and ZTE pose,” he said.
“Huawei and ZTE have close ties to the Chinese government and military apparatus and are subject to Chinese laws requiring them to assist with espionage, a threat recognized by other federal agencies and the governments of other nations,” said an FCC news release: “The public funds in the FCC’s USF … must not endanger national security through the purchase of equipment from companies posing a national security risk.”
House Commerce Committee ranking member Greg Walden, R-Ore., hailed the FCC vote. He touted the committee's advancement of supply chain security bills (see 1911210057), including the Secure and Trusted Communications Networks Act (HR-4998), to "help the FCC carry out this important work." HR-4998 would require the FCC to provide $1 billion in funding to help small carriers remove equipment from companies that may pose a security risk.
The Rural Wireless Association has “cautious” optimism. The order “will allow for a handful of impacted rural carriers, including RWA members, to maintain existing critical communications services so long as USF funding is not used to directly or indirectly fund Huawei or ZTE by purchasing additional equipment manufactured by these covered companies, or, contract for new services performed by these covered companies,” RWA said. A Further NPRM should offer a “fully-adequate funding program in place and approved by Congress before there is any physical removal of existing equipment.”
Other industry groups applauded. “With 5G technology ushering in unprecedented connectivity, ensuring global networks are safe and reliable is more important than ever before,” said David Stehlin, CEO of the Telecommunications Industry Association. It's “smart policy and will make us safer,” said USTelecom President Jonathan Spalter. The Chinese companies and the Chinese Embassy didn't comment.