The Federal Communications Commission is preparing to ban new Huawei and ZTE device sales in the U.S., the first time the regulator has banned equipment on the basis of national security, according to various reports.

The FCC, with the support of Congress, has already cut any broadband subsidy funding to ZTE and Huawei network equipment, which it has concluded is a threat to national and network security. With the backstop of federal legislation, the FCC also requires any so-subsidized networks to rip and replace any of that suspect tech they have been using.

The issue is the conclusion that those companies have too-close ties to the Chinese Communist Party.

Also: Telecom Nets Seek $5 Billion-Plus to Rip and Replace

Sen. Mark Warner (D-Va.), chairman of the Senate Intelligence Committee and a former top communications tech executive, buttressed that reporting with a statement Thursday (Oct. 13) billed as a response to “the Federal Communications Commission (FCC) decision to ban new sales of Chinese-based Huawei and ZTE technologies on the bases of national security.”

A spokesperson said the senator’s response was to the widespread reporting, combined with the fact that the law requires the FCC to vote on such a ban before the end of the year.

Also: Huawei Says FCC Ban Could Be Unconstitutional

Warner, who has long warned of the dangers of using tech from those Chinese companies, said he was glad the FCC “finally took that step” and pointed out that a bipartisan group of senators has been calling out the threat from Huawei and ZTE for several years, including passing the Secure and Trusted Networks Act of 2019, which incentivized the FCC rip and replace program, and which Warner co-authored.

The Secure and Trusted Communications Networks Act required the FCC to identify tech companies — and their subsidiaries and affiliates — whose products and/or services posed a national security threat and reimburse them for removing that suspect tech. ■

In a move that is a big blow to some big tech companies, Congress has voted to ban new equipment licenses for Chinese telecoms Huawei, ZTE and any other technology company the government concludes poses a national security threat, closing what one of the bill's sponsors called a “dangerous loophole.”

That came with the Senate‘s unanimous passage of the Secure Equipment Act, which requires the Federal Communications Commission to adopt rules to that effect. The House has already passed the bill, so it will only take a stroke of the President's pen to make it the new law of the land.

Currently, in addition to ZTE and Huawei, companies on the FCC's suspect tech list are Hytera, Hikvision, and Dahua.

The FCC was directed by the Secure and Trusted Communications Networks Act of 2019 to maintain a list of equipment and services that pose that national security risk.

The FCC has already adopted rules requiring networks to rip and replace any suspect tech that was bought with government subsidy money, but the new bill extends that crackdown to tech outside the subsidy programs. Now that tech will not be able to get FCC approval for use by any U.S. networks.

The bill was co-sponsored in the Senate by Sens. Ed Markey (D-Mass.) and Marco Rubio (R-Fla.). Rubio has been a big critic of Chinese technology in U.S networks.

“In today’s increasingly connected world, we must animate our technology with our values,” Markey said. “That’s why our bipartisan legislation will keep compromised equipment out of U.S. telecommunications networks and ensure our technology is safe for consumers and secure for the United States.”

“Chinese state-directed companies like Huawei and ZTE are known national security threats and have no place in our telecommunications network,” said Rubio. “I am grateful that the Senate and House passed this bill, which will help keep compromised equipment from bad actors out of critical American infrastructure.”

“I applaud Senator Rubio and Senator Markey as well as Republican Whip [Steve] Scalise [R-La.] and Congresswoman [Anna] Eshoo [D-Calif.] [who introduced the bill in the House] for their leadership and work to secure America’s communications networks," said FCC commissioner Brendan Carr, who called for closing what he has labeled the “Huawei loophole.” 

“Their work in the Senate and House to secure passage of this legislation, which is now headed to the President’s desk for his signature, will help to ensure that insecure gear from companies like Huawei and ZTE can no longer be inserted into America’s communications networks,” Carr said.

“Congratulations to Congresswoman Eshoo and Congressmen Scalise on the passage of their Secure Equipment Act of 2021," said FCC Commissioner Nathan Simington. "Once signed, this important legislation will give the FCC crucial authority to protect American networks from untrustworthy equipment that can serve as footholds for China and other foreign powers to infiltrate U.S. telecommunications networks and threaten our national security. But this legislation does not complete the work of protecting our digital sovereignty. In the current digital security landscape, inadvertent flaws in wireless edge devices are as much a threat as intentionally created backdoors. The FCC must continue to engage with industry and other parts of government to identify and eliminate weaknesses that can be exploited by our adversaries.”

The House has passed four communications-related bills including one that would expand the ban on suspect tech. All four passed out of the House Energy & Commerce Committee last summer by voice vote, meaning none were controversial. They all must still be passed by the Senate to make it to President Joe Biden‘s desk.

The “Secure Equipment Act of 2021” (HR 3919) — sponsored by Reps. Steve Scalise (R-La.) and Anna Eshoo (D-Calif.) — would prevent the Federal Communications Commission from approving any wireless equipment authorization for a tech company on the list of companies that pose a national security risk. That list currently includes Chinese firms Huawei and ZTE.

The FCC, under its own initiative and with the direction of Congress in the Secure and Trusted Communications Act, published a list of tech suppliers deemed national security threats and prohibited the use of federal funds for telecom networks using that tech: the highest-profile companies on that list were Huawei and ZTE. Congress also funded the removal that suspect tech from existing government-funded buildouts.

Currently, the FCC is disallowing the use of technology from Huawei, ZTE, Hytera, Hikvision, and Dahua in U.S. broadband networks built out with government subsidy money. But the prohibition has not extended to networks not built with government bucks. This bill expands the ban by not allowing them to get FCC authorization for use in any U.S. network.

The degree to which keeping suspect tech out of those U.S. networks is a bipartisan priority was evident in the lopsided vote, which was 420-4.

The House also passed:

• H.R. 4067, the “Communications Security Advisory Act of 2021,” which would codify and make permanent the FCC‘s Communications Security, Reliability, and Interoperability Council and require biennial reporting to the FCC and public on how to improve communications network.

• H.R. 4032, the “Open RAN Outreach Act,” which directs NTIA to reach out and help small network providers who want to offer Open-RAN (ORAN) networks and other open architectures.

• H.R. 4028, the “Information and Communication Technology Strategy Act,” which would direct the Secretary of Commerce to report to Congress on the state of the economic competitiveness of the trusted vendors the U.S. will rely on to replace the untrusted ones being weeded out of U.S. nets and how the government can help insure their competitiveness. China has helped insure the competitiveness of untrusted nets by subsidizing their tech giants.

All four of the bills advanced out of the Energy and Commerce Committee by a voice vote during a full committee markup in July. 

The bills' passage brought bipartisan praise from the other side of the Hill. Sens. Ed Markey (D-Mass.) and Marco Rubio (R-Fla.), who introduced the Senate version of the Secure Equipment Act, applauded House passage and urged the Senate to follow suit.

“Today the House continued its work to strengthen our nation’s telecommunications infrastructure for the future by overwhelmingly passing four bipartisan bills,” the senators said in a statement. “Together, these bills will boost network reliability, protect against suspect equipment that poses a risk to our national security, support small communications network providers, and bolster the economic competitiveness of our technology supply chains. We commend the bipartisan work that went into these bills that advanced out of our committee in July and hope that the Senate will take action soon.”

Attention broadband network providers with ZTE or Huawei tech: The FCC is holding a webinar Sept. 27 with info on the Secure and Trusted Communications Networks Reimbursement Program.

That is the congressionally mandated and FCC-supported program for compensating smaller providers--10 million and fewer customers--for removing and replacing network tech the FCC has concluded is a potential national security threat, a list that started with ZTE and Huawei.

The webinar, which begins at 10:30 a.m. on the FCC website here, will include information on eligibility, the application process and a virtual walk-through of the online portal for filing those applications for reimbursement. There is no registration requirement for the webinar.

Also Read: FCC Denies ZTE Appeal of Suspect Tech Label

The Secure and Trusted Networks Act of 2019 set aside $1.9 billion for reimbursement of the cost of ripping and replacing.

Currently, the program only applies to ZTE and Huawei tech obtained "on or before June 30, 2020.

In June 2020, the FCC deemed technology provided by Chinese vendors Huawei and ZTE to be security threats and blocked access to the Universal Service Fund broadband subsidies' billions to any U.S. network operator that didn’t comply with the edict to remove Huawei and ZTE tech from their networks and not to buy any more of it.

The FCC has voted on an order to extend its reimbursement program for ripping and replacing suspect tech to larger players, aligning its ongoing efforts with Congress' legislative directives.

The proposed cap on reimbursing providers of advanced telecom services for the reasonable costs for removing, replacing and disposing of equipment that poses an unacceptable national security risk was providers with up to two million customers. Now, the cap will be 10 million.

The money comes from the $1.895 billion Congress appropriated in the Secure and Trusted Communications Networks Reimbursement Program.

Also Read: FCC Labels Five Chinese Companies Security Risks

The order also extends rip and replace to all equipment and services made by Huawei and ZTE, both already designated national security threats subject to the program.

As directed by Congress, "[t]he FCC will soon undertake what is perhaps the most significant federally funded effort to rebuild and secure commercial communications networks nationwide," said acting chair Jessica Rosenworcel. "This means we will evaluate network after network, base station after base station, and router after router until we have rooted out equipment that could undermine our national security."

Also Read: FCC Seeks Input on Rip-and-Replace Cost Catalog

The item, which was voted at the FCC's July 13 open meeting, also clarified some program requirements and creates a process for prioritizing funds if the need exceeds Congress' $1,895, as some believe it could.

The FCC has proposed revising it's equipment authorization and competitive bidding rules to better keep untrustworthy entities out of U.S. networks.

The commission voted unanimously at its June 17 public meeting to approve a notice of proposed rulemaking (NPRM) and notice of inquiry (NOI) to better protect U.S. networks from all threats.

Acting chair Jessica Rosenworcel said it was crucial to rethink the communications supply chain, including excluding suspect actors from U.S. networks by not authorizing suspect tech.

Also Read: Commissioner Carr Says FCC Continues to Approve Insecure Tech

She pointed out that while tech from Chinese telecoms Huawei and ZTE  had been excluded from networks built with government subsidies, the FCC was still approving potentially insecure tech from those companies, which could be used in networks not built with those government subsidies. The current proposal would close that loophole.

The NPRM/NOI proposes to revise the FCC's equipment authorizations to include a finding that the authorized equipment does not pose a national security risk. It also seeks input on whether and how the FCC should revoke prior authorizations by companies identified by the FCC as a potential threat to the security of U.S. communications networks. Currently those are Chinese telecoms Huawei and ZTE.

The FCC is also proposing that it change its competitive bidding rules to require bidders to certify that they are not relying for financial support on any company identified as a threat to national security. The rules would also require companies to have a U.S. agent for the FCC to deal with.

The commission is asking for input on compliance and enforcement of the revisions, and on how to leverage its equipment authorization authority to encourage cybersecure devices and better cybersecurity practices.

“[I]f you sell your equipment in the United States—the greatest free marketplace in the world—then you should also make yourself readily available to the FCC’s jurisdiction should we need to ask questions or hold you accountable for any issues stemming from that equipment," said commissioner Geoffrey Starks. "The American people welcome competition for the best goods, but also expect to be protected from harm. It is only fair. The item therefore proposes to require foreign equipment authorization applicants to have a U.S. registered agent for service of process. Beyond all the legalese, here is what the message is: If your equipment harms Americans, the FCC needs to be able to find you, and hold you accountable.  These changes will hopefully increase transparency, and prevent future bad actors from using their foreign status to avoid any FCC accountability.”

"We are launching this procedure with a simple and important goal--to protect our networks and out national security. At the same time, this is also about what I have described as our 5G values, values that Communist China clearly does not share with the U.S. and other democratic nations."

"The FCC is committed to doing everything it can to support the security of our communications networks," said Rosenworcel.

The FCC action came only days after a bipartisan bill was introduced that would prevent the use of private, as well as public, funds to purchase suspect tech for U.S. networks.

The legislators backing bills to ban all suspect tech from U.S. nets added their collective praise for the FCC vote.

“We applaud the FCC’s vote to put national security first by keeping compromised Chinese equipment out of U.S. telecommunications networks. We introduced bipartisan, bicameral legislation to make this action permanent, blocking technology manufactured by companies that pose a threat to our national security," said Sens. Marco Rubio (R-Fla.) and Ed Markey (D-Mass.), along with Reps. Anna Eshoo (D-Calif.) and Steve Scalise (R-La.). "We thank Acting Chairwoman Rosenworcel and Commissioner Carr for their leadership on this issue and look forward to working with the Commission to protect our nation’s networks from foreign adversaries,” 

The Senate has passed the U.S. Innovation and Competition Act (USICA) (formerly the Endless Frontier Act), which, among many other things, attempts to diversify and better secure the 5G supply chain by backing alternatives to Chinese tech suppliers Huawei and ZTE. It now heads to the House.

Among those other things would be investment in the telecommunications workforce, improve STEM education, and promote agency coordination on R&D.

Passage was greeted by bipartisan cheers, though with some caveats.

Also Read: DC Weighs in on 5G Buildout Item

“Over the past three months, I have heard from dozens of stakeholders at every level of the semiconductor supply chain and customer base that we need smart, strategic investments to shore up our domestic supply chain and bolster U.S. leadership — and we need them now," said Commerce Secretary Gina Raimondo. "Today, the Senate took a critical bipartisan step forward to make the investments we need to continue America’s legacy as a global leader in innovation. I applaud the Senators from both parties who came together to get this done. This funding isn’t just about addressing the current semiconductor chip shortage, it is about long-term investments in semiconductor manufacturing and research and development to enhance our economic and national security, strengthen American competitiveness and create good-paying jobs. I urge the House to take up this critical legislation as quickly as possible.”

“America is at our best when we are innovating, competing and exploring,” said Commerce Committee Chair Maria Cantwell (D-Wash.). “Today’s Senate vote is a major step towards building the R&D capacity we need to seize the promise of an Information Age. This bipartisan vote is a huge boost to our innovation ecosystem that will help us keep pace with our competitors.”

"America’s innovation in semiconductors undergirds our entire innovation economy. A wide array of products – from planes and automobiles to household appliances and small ‘smart’ devices – rely on these chips, and demand is only growing. But for too long, the U.S. has allowed competitors like China to out-invest us. No more," said Sen. Mark Warner (D-Va.), who backed the 5G provision. 

"This bill makes a major, $52 billion investment in domestic semiconductor manufacturing, which will create good-paying jobs in America while maintaining our global innovation edge,” said Warner. “I am encouraged that this bill passed the Senate today on a broadly bipartisan basis, and strongly encourage our colleagues in the House to take it up and send it to the President’s desk without delay.”

“We are encouraged that the Senate has made U.S. competitiveness and technological innovation a priority with an emphasis on AI and other emerging and critical technologiesm," said Computer & Communications Industry Association (CCIA) VP Arthur Sidney. "However, late amendments to this critical bill may prove unworkable or counterproductive for U.S. industry. Thus, we welcome the opportunity to work with the House to improve this legislation and refocus it to help American innovation flourish."

"To remain competitive on the international stage, the United States must prioritize and continue to expand its investments in research, development, and technological advancement," said ITI President Jason Oxman. "The U.S. Innovation and Competition Act takes important steps to expand U.S. innovation leadership, including key measures to help build a strong ecosystem for developing advanced technologies and creating new jobs in communities across the country. We are pleased that the bill, in particular, provides robust funding for the CHIPS for America Act to boost domestic semiconductor production, which is essential for our economic and national security..."

“The U.S. Innovation and Competition Act would help position the United States a step ahead of China in science and technology,” said Sen. Roger Wicker (R-Miss.), ranking member of Commerce Committee. “The legislation includes numerous bills and amendments that I sponsored to ensure all areas of the country receive a fair opportunity to participate in federally funded R&D and to protect American research and intellectual property from foreign theft.”

"This important legislation will support U.S. ingenuity for years to come, including new wireless network technologies that DISH is eager to bring to life for the American people," said Jeff Blum, EVP of external and legislative affairs at DISH. "The critical funding to promote and deploy Open RAN innovation from Senator Warner and Senator Rubio’s USA Telecommunications Act will spur American job creation, diversify the telecom equipment supply chain, enhance network security and boost our nation’s efforts to lead the global race to 5G (and beyond).

FCC Commissioner Brenda Carr says it is time to close a "glaring loophole" in rules adopted under former FCC Chairman Ajit Pai to weed out suspect tech from U.S. networks, rules under which he said thousands of insecure applications continue to be approved because they are bought with private funds.

The FCC's rules for requiring telecoms to rip and replace equipment from suspect Chinese tech suppliers--Huawei and ZTE initially and now several more--only apply to equipment purchased with government subsidies, Carr said at an event hosed by the Center for Strategic and International Studies, which means that the same suspect tech bought with private funds can continue to be used in U.S. networks.

Also Read: Rosenworcel Says of 5G Security--Be Afraid; Be Very Afraid

“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," he said.

He said the FCC continues to approve thousands of applications from Huawei and other entities deemed national security threats. 

The FCC's list of companies whose tech must be removed and replaced if it was bought with Universal Service Fund subsidy money has grown to Huawei, ZTE, Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, and Dahua Technology Company," Carr points out. He says he reviewed the FCC’s equipment authorizations since 2018 and it shows that "over 3,000 applications from Huawei alone have been approved since then," including "new devices and re-certification of existing ones, ranging from network gear to tracking devices" which include video surveillance and facial recognition equipment."

Also Read: FCC Flags More Chinese Telecoms

He calls that a back door for Communist China the FCC needs to slam ASAP.

Carr also wants the FCC to try and make sure that no device can enter the U.S. market if it has been produced with forced labor, saying his proposal is along the lines of the Uyghur Forced Labor Prevention Act introduced by Sen. Marco Rubio (R-Fla.).

Also Read: Huawei Opposes FCC Rip and Replace 

Carr says the FCC should require any company that buys devices or components from the Xinjiang Uyghur

Autonomous Region (XUAR) of China would have to meet a "heightened burden" to make sure it was not made with forced labor. "Communist China must not profit from their human rights abuses," said Carr.

"FCC Acting Chairwoman Rosenworcel has long advocated for reforming the equipment authorization process to better ensure security in new network devices and is pleased to see growing support for this idea," said a spokesperson for the acting chairwoman.  "In fact, the FCC is already working on addressing many of the issues Commissioner Carr spoke about."

The FCC has released its list of communications equipment and services deemed a national security threat and joining Huawei and ZTE, currently the poster companies for the FCC's effort to secure the network supply chain, are three other Chinese companies: Hytera Communications Corp., Hangzhou Hikvision Digital Technology Co., and Dahua Technology Co.

Also Read: Senate Bill Would Boost Network Rip-and-Replace Eligibility

The list was released by the Public Safety and Homeland Security Bureau Friday (March 12) and was mandated by Congress in the Secure Networks Act, part of an effort by the FCC and Congress to remove suspect tech from U.S. networks.

FCC subsidy money cannot be spent on new network buildouts that include technology or services from those companies. 

The bureau said the list will be updated if and as needed.

Also Read: FCC Says Suspect Tech Extraction Will Cost $1.8B

"This list is a big step toward restoring trust in our communications networks," said acting chair Jessica Rosenworcel. "Americans are relying on our networks more than ever to work, go to school, or access healthcare, and we need to trust that these communications are safe and secure. This list provides meaningful guidance that will ensure that as next-generation networks are built across the country, they do not repeat the mistakes of the past or use equipment or services that will pose a threat to U.S. national security or the security and safety of Americans."

China Telecom (Americas) appears to be working hard to try and prevent the FCC from revoking its licenses to operate in the U.S.

On Thursday (Dec. 10), the FCC voted unanimously to initiate a revocation proceeding against the company after several federal agencies recommended that action, citing the company as a national security threat. The FCC suggested such revocation was warranted "based on the 'substantial and unacceptable national security and law enforcement risks associated with [China Telecom Americas’] continued access to U.S. telecommunications infrastructure.'"

Also Read: FCC Says China Telecom Has Some Explaining to Do

On the same day the FCC voted to launch the revocation proceeding, China Telecom (Americas) announced that it had been accepted into the Mutually Agreed Norms for Routing Security (MANRS). MANRS is "a global initiative, supported by the Internet Society, that provides crucial fixes to reduce the most common routing threats."

"Even though internally it is always clear to us that we are committed to providing the most secure and reliable networks for our customers, joining MANRS is an unequivocal demonstration to the outside world of that commitment," said company president Xu Tan in a statement.

Also Read: FCC Flags More Chinese Telecoms

In April, the FCC issued a "show cause" order to China Telecom (Americas) directing it to justify why the FCC should not start revocation proceedings.

As with ZTE and Huawei, whose tech the FCC has tentatively found to be suspect and in need of replacing, the FCC's issues with China Mobile were concerns that current or potential Chinese government influence could make them a national security threat to the network security of critical 5G nets in the U.S.

China Telecom's announcement also came the same day the FCC made it official that Huawei tech would be excluded, ripped and replaced from any U.S. nets funded with government money.

The FCC has voted on a Second Report and Order (a final action) to approve the framework for preventing the use of suspect tech in U.S. networks and removing (the new term of art rather than "ripping") and replacing existing suspect tech, including a process for identifying which tech to expel.

The FCC called it a major step to protect those networks from potential security threats. That vote came at what will be the second to the last meeting for FCC chairman Ajit Pai and the last for outgoing Republican commissioner Michael O'Rielly.

Thursday's decision comes in the face of the exponential growth of internet-connected devices controlling everything from power grids to refrigerators; an increasingly hunkered down, work and play from home, virtual world; and the wealth of data, personal and otherwise, being trafficked on the 'net and stored in the cloud.

Now, the FCC just needs Congress to pony up the money for the rip-and-replace regime that was mandated in the Secure and Trusted Communications Network Act.

The FCC has already formally designated Huawei and ZTE as suspect tech and excluded them from the $8.3 billion in Universal Service Fund broadband subsidy money.

Related: Senate Bill Would Boost Rip-and-Replace Eligibility

The rules require Eligible Telecommunications Carriers (ETCs) to "remove and replace covered equipment from their networks," and create a "Secure and Trusted Communications Networks Reimbursement Program" to fund smaller carriers' removal and replacement of suspect tech, at least once Congress has appropriated the $1.6 billion the FCC has estimated it will cost.

The FCC also approved a Second Report and Order that:

•  "Adopts rules to publish and modify a list of communications equipment and services that Congress or enumerated national security agencies or interagency bodies with appropriate national security expertise determine pose an unacceptable risk to the national security of the United States or the safety and security of its people.

• "Prohibits the use of any Federal subsidy that is made available through a program administered by the Commission and that provides funds to be used for the capital expenditures necessary for the provision of advanced communications service to purchase, rent, or otherwise obtain any covered communications equipment or services.

• "Establishes the Secure and Trusted Communications Network Reimbursement Program, which will provide funds for the removal, replacement, and disposal of covered communications equipment and services, and condition the start of the program on Congress appropriating the funds the Commission estimates that program will cost.

• "Requires Eligible Telecommunications Carriers and participants in the Secure and Trusted Communications Network Reimbursement Program to remove, replace, and dispose of covered communications equipment and services in their networks.

• "Requires all providers of advanced communications services to report whether their networks use covered communications equipment or services acquired after August 14, 2018."

FCC chairman Ajit Pai has said those all are "critical next steps toward securing our communications networks." 

Commissioner O'Rielly said the need to protect networks from harm has never been more apparent. He said the FCC is effectively closing out market in the interests of national security and that those actions will have global repercussions, but that ultimately he supported the item. He said that a mandated rip and destroy program will look more like "duplicate and dismantle," so the FCC needs to be mindful of the disruption it will create.

He said the FCC should not tip the scales toward certain companies or pick technologies winners and losers, and should tread carefully.

Commissioner Brendan Carr, after first saying O'Rielly had outworked probably everyone in this building, pointed out he had promoted rip-and-remove a couple of years ago, and the need for that program had only grown. He said the record is clear on China's intent to spy on the U.S. to get an industrial and business edge. 

He said the FCC "has shown the strength and resolve to meet this threat." He also said it had turned the page on "the weak and timid approach to China of the past," and that it would be a mistake to revert to that approach, a not-to-veiled reference to Republican concerns about the approach of a Biden Administration. 

Commissioner Jessica Rosenworcel began her comments with a shout-out to O'Rielly, saying that she appreciated his allegiance to the Constitution, "even in times where it may not have been convenient or easy." O'Rielly's nomination was pulled by President Trump, a move generally credited to O'Rielly's defense of the First Amendment against attempts to regulate social media speech, attempts the President has supported.

Of the item, Rosenworcel said the Chinese government is still trying to consolidate its 5G authority and sustain its supply chain advantages. She said that means banning two vendors--Huawei and ZTE--is a start, but not enough. She said there needs to be a more comprehensive national 5G security strategy. 

Commissioner Geoffrey Starks, having saluted O'Rielly as well, called the item "another important step in confronting the threat of insecure equipment in our nation’s communications networks." Given the seriousness and urgency of the threats to our networks, I am glad that we have decided to move forward with today’s Order, even as we await an appropriation," he said.

He also said he appreciated the chairman's willingness to tweak the item. 

"I am pleased that the chairman worked with me to make changes to today’s Order that will further reduce the national security impact of the funding lag," said Starks. "The version we now adopt will effectuate the recommendations by chairman Frank Pallone and ranking member Greg Walden and make clear that the Commission intends to develop and release the Catalogue of Eligible Expenses as soon as possible, so that it can be a resource to providers who wish to begin the replacement process before reimbursement funding becomes available. It also encourages companies to proceed with the replacement process before the reimbursement program is funded with confidence that doing so will not jeopardize their eligibility. These steps should encourage providers to make these critical security improvements now."

Pai, who had already praised O'Rielly in his opening statement, went straight to the issue. 

He talked about the previous (Democratic) FCC's watch, during which he said China's rise drew praise from the Administration and Chinese equipment was allowed to be incorporated into U.S. networks "with nary an eyebrow raised." But he said that had changed under his watch.

"We have made real progress in securing our networks and supply chains," he said, including the initial designations of Huawei and ZTE as national security threats, and pushing for open radio access networks (ORANs).

Pai also put in another plug for Congress to fund the program, which could cost upwards of $1.6 billion.

Rosenworcel suggested more needed to be done on ORANs, including the FCC launching testbeds, and Starks said he would have preferred the item require that those replacing suspect tech with government demonstrate that they had considered ORAN solutions.

The Telecommunications Industry Association supported the move. 

“In the midst of a pandemic, we depend on our networks more than ever to keep us working and learning from home," said TIA CEO David Stehlin. "We urge Congress to now appropriate the necessary funds and make this critical investment to ensure the security of our nation’s digital infrastructure."

A bipartisan group of senators has sent a letter to that body's leadership from both parties asking that Congress fully fund already-passed legislation that mandates a suspect network tech rip-and-replace program and better FCC broadband mapping.

Sens. Roger Wicker (R-Miss.), chairman of the Senate Commerce Committee; Deb Fischer (R-Neb.), Jerry Moran (R-Kan.), Todd Young (R-Ind.) and Marsha Blackburn (R-Tenn.) were the lead names on a letter joined by over a dozen more Senate colleagues seeking funding for the Secure and Trusted Communications Networks Act and the Broadband DATA Act.  

Related: Senate Bill Would Boost Rip-and-Replace Eligibility

"Congress needs to ensure Americans have access to secure connectivity. Providing funding for rip and replace and broadband mapping will help achieve this goal," they wrote. 

Outgoing FCC Chairman Ajit Pai has also been pushing Congress to come through with the money for mapping and to help smaller operators deal with the expense of ferreting out and replacing network tech from suppliers like ZTE and Huawei, the first two to be classified as network security threats in need or eliminating.

The senators point out that closing the digital divide depends on knowing where broadband is and isn't, which is why better mapping is imperative.

Also signing the letter were Sens. John Barrasso (R-Wyo.), Richard Burr (R-N.C.), Benjamin Cardin (D-Md.), John Cornyn (R-Tex.), Kevin Cramer (R-N.D.), Mike Crapo (R-Idaho), Steve Daines (R-Mont.), Angus King (I-Maine), David Perdue (R-Ga.), James Risch ( R-Idaho), Pat Roberts (R-Kan.,) Tim Scott (R-S.C.), and Chris Van Hollen (D-Md.).

“I strongly agree with the 18 bipartisan Senators, and especially Chairman Wicker, for their letter urging Senate leadership and appropriations leadership to provide full funding for the Secure and Trusted Communications Networks Reimbursement Program and to implement the Broadband DATA Act," said Competitive Carriers Association President Steven K. Berry. "The Reimbursement Program is vital not only to national security, but also to small, rural telecommunications operators – many of whom provide the only service to customers in their respective areas.  Having to replace affected equipment is a massive financial and personnel undertaking, and carriers depend on congressional funding to continue to provide critical mobile broadband services to their customers.

"Additionally, I couldn’t agree more that the Broadband DATA Act should be funded to ensure more accurate broadband maps.  More accurately identifying unserved and underserved areas will help close the digital divide and will help ensure that every American, no matter where they live, work, or travel, can access necessary mobile broadband services.”

The FCC has denied Chinese telecom ZTE's appeal of its designation as suspect network technology that can't be subsidized with Universal Service Fund money and must eventually be replaced in existing networks.

The FCC's Public Safety and Homeland Security Bureau has denied a petition for reconsideration filed by ZTE, which along with Huawei were the first two tech suppliers designated a threat to U.S. network security and the communications supply chain by the FCC, which is coming up with a list of others. 

Related: Senate Bill Would Boost Rip-and-Replace Eligibility

“With today’s order, we are taking another important step in our ongoing efforts to protect U.S. communications networks from security risks,” said FCC Chairman Ajit Pai in a statement.

Pai has teed up a vote at the December public meeting plan on rules to implement a congressional mandate—in the Secure and Trusted Networks Act—to "remove and replace untrusted equipment," though Congress has yet to allocate the $1.6 billion of the $1.8 billion the FCC has estimated it will cost, a point Pai made in his statement. 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," said Pai. 

Related: FCC Urged to Rip and Replace without Funds

In June, the FCC deemed technology provided by Chinese vendors Huawei and ZTE to be security threats pending an opportunity for them to appeal that decision, which they did. The agency blocked access to the Universal Service Fund to any U.S. network operator that didn’t comply with the edict to remove Huawei and ZTE tech from their networks and not to buy any more of it again. 

Related: Computers Cos. Provide Rip-and-Replace Guidance

The mandate burdened network operators with the task of replacing relatively inexpensive technology from the Chinese vendors with gear and software from pricier vendors—essentially buying the same tech twice, and paying substantially more the second time around. 

In March, the Trump Administration signed into law the Secure and Trusted Communications Act, which underwrote much of the replacement costs with tax dollars. 

The bipartisan leadership of the House Energy & Commerce Committee is asking the FCC to get moving on a suspect network tech rip-and-replace program Congress mandated, but has yet to fund.

The program requires smaller service providers to remove and replace suspect network technology, like that of Huawei and ZTE, which have already been given that designation by the FCC, which has estimated that ripping and replacing that tech, plus any other companies it adds to the list, could cost $1.6 billion.

The FCC is planning to vote next month on a framework for ripping and replacing.

Related: Senate Bill Would Boost Rip-and-Replace Eligibility

The item would adopt rules requiring Eligible Telecommunications Carriers (ETCs) to "remove and replace covered equipment from their networks," and create a "Secure and Trusted Communications Networks Reimbursement Program" to fund smaller carriers' removal and replacement of suspect tech, at least once Congress has appropriated the $1.6 billion.

As planned, the start of the reimbursement program would be "condition[ed] on Congress appropriating the funds the Commission estimates that program will cost."

But House E&C chairman Frank Pallone (D-N.J.) and ranking member Greg Walden (R-Ore.) don't want the FCC to wait for the money before setting the process in motion. 

In a letter from the leaders to FCC chairman Ajit Pai, a copy of which was supplied to Multichannel News, they say: "While the Program has not yet been funded by Congress, there is demonstrated bipartisan and bicameral support for doing so. In the meantime, carriers are moving forward to remove their suspect equipment and need guidance."

Related: Huawei Opposes FCC Rip-and-Replace 

Pallone and Walden want the FCC to develop and release the list of suspect tech, including equipment, software and services, ASAP, and to "reassure" companies they can buy replacement equipment before the program is funded so long as they are eligible.

Invoking COVID-19, they said companies will need to replace tech without disrupting service. 

Pai has been warned by Rep. Pallone and other Dems not to make any controversial moves during the lame duck period, but Pallone and Walden agreed it was a "non-controversial action" that should be taken ASAP.

“Chairman Pai strongly agrees with the letter’s goal of ensuring that our nation’s communications networks are secure," said an FCC spokesperson. "To that end, the Commission has taken significant action to protect against threats to our communications networks, including prohibiting the use of money from the Universal Service Fund to purchase or support equipment or services from companies posing a national security threat. Additionally, he just announced that on Dec. 10, the FCC will vote on rules to implement the Secure and Trusted Communications Networks Reimbursement program, months before the statutory deadline. He also agrees that it is more vital than ever that Congress appropriate funds to allow the Commission to fully support carriers through the remove and replace process.” 

“I thank chairman Pallone and Republican Leader Walden for their focus on ensuring the FCC provides assistance to companies that need to replace suspect network equipment and assurance that eligibility for expenses to be reimbursed not be in jeopardy if they begin the process prior to the program being fully funded," said Competitive Carriers Association president Steven K. Berry. "Smaller carriers, with already limited resources, greatly depend on funds from the Secure and Trusted Communications Networks Reimbursement Program to continue providing critical wireless services to their customers as they transition to approved, more secure technologies, and the FCC plays an essential role in ensuring these companies have clear guidance during this challenging process. I thank Congressmen Pallone and Walden for their leadership on this issue and remain committed to working with Congress to fully fund the program as soon as possible.”

The FCC plans to vote next month on the framework for preventing the use of suspect tech in U.S. networks and ripping and replacing existing suspect tech, including a process for identifying which tech to expel.

The FCC has already formally designated Huawei and ZTE as suspect tech and excluded them from $8.3 billion in Universal Service Fund broadband subsidy money.

Related: Senate Bill Would Boost Rip-and-Replace Eligibility

The item would adopt rules requiring Eligible Telecommunications Carriers (ETCs) to "remove and replace covered equipment from their networks," and create a "Secure and Trusted Communications Networks Reimbursement Program" to fund smaller carriers' removal and replacement of suspect tech, at least once Congress has appropriated the $1.6 billion the FCC has estimated it will cost.

The chairman has circulated a Second Report and Order to the other commissioners that would specifically:

•  "Adopt rules to publish and modify a list of communications equipment and services that Congress or enumerated national security agencies or interagency bodies with appropriate national security expertise determine pose an unacceptable risk to the national security of the United States or the safety and security of its people.

• "Prohibit the use of any Federal subsidy that is made available through a program administered by the Commission and that provides funds to be used for the capital expenditures necessary for the provision of advanced communications service to purchase, rent, or otherwise obtain any covered communications equipment or services.

• "Establish the Secure and Trusted Communications Network Reimbursement Program, which will provide funds for the removal, replacement, and disposal of covered communications equipment and services, and condition the start of the program on Congress appropriating the funds the Commission estimates that program will cost.

• "Require Eligible Telecommunications Carriers and participants in the Secure and Trusted Communications Network Reimbursement Program to remove, replace, and dispose of covered communications equipment and services in their networks.

• "Require all providers of advanced communications services to report whether their networks use covered communications equipment or services acquired after August 14, 2018."

FCC Chairman Ajit Pai blogged that those are "critical next steps toward securing our communications networks." 

The price for extracting from U.S. networks equipment and software from Chinese vendors deemed security threats by the Trump Administration will come in at around $1.8 billion, according to figures released Friday by the FCC. 

The agency also said that most of that money, $1.6 billion of it, could be eligible for reimbursement to U.S. network operators from the federal government. 

In June, the FCC deemed technology provided by Chinese vendors Huawei and ZTE to be security threats. The agency blocked access to the Universal Service Fund to any U.S. network operator that didn’t comply with the edict to remove Huawei and ZTE tech from their networks and not to buy any more of it again. 

The mandate burdened network operators with the task of replacing relatively inexpensive technology from the Chinese vendors with gear and software from pricier vendors—essentially buying the same tech twice, and paying substantially more the second time around. 

In March, however, the Trump Administration signed into law the Secure and Trusted Communications Act, which underwrote much of the replacement costs with tax dollars. 

Notably, The Verge quoted the CEO of a small Oregon carrier in June who said it would cost $1.5 million to replace Huawei equipment his company originally paid $500,000 for. The company also said it might not be able to come up with the cash to make the switch before receiving the government reimbursement. 

Tech company government contractors said they may not all be able to comply immediately with a new prohibition on suspect tech. 

The interim rule implementing the National Defense Authorization Act ban on the use of tech from Huawei and ZTE (as well as surveillance tech from three other companies, Hytera, Hangzhou Hikvision Digital Technology Co., and Dahua Technology Co.), went into effect for government contractors Thursday (Aug. 13). 

Due to their alleged connections to the Chinese government, those companies' tech in U.S. networks was deemed a national security risk. 

Related: Chinese Telecoms Unwelcome in Government Contracts 

In response to the rule's trigger, ITI, the Information Technology Industry Council, which represents hardware and networking equipment manufacturers and software developers, said Thursday that its members "wholeheartedly" support the goal of protecting the federal tech supply chain from potentially compromised equipment. "However, because of the extended time it took to roll out rules for these far-reaching requirements, contractors may not be able to consistently meet the law’s objectives," warned Gordon Bitko, SVP for public sector policy." 

ITI said it would continue to provide "input" on the rule while working with federal agencies to to both secure networks and "minimize unintended negative commercial impacts." 

Because of the national security issues and the Aug. 13 congressional deadline, the rule was implemented without public comment and the normal OMB review under the Paperwork Reduction Act, but there will still be an opportunity to comment, the Administration said, which is why it is an interim rule, not the final one.  

Related: Huawei President Pushes Back

The interim rule revises the Federal Acquisition Regulation (FAR) and "prohibits agencies from procuring or obtaining, or extending or renewing a contract to procure or obtain, any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as a critical technology as part of any system, on or after Aug. 13, 2019."  

Related: Reports Have White House Implementing Tech-Blocking Provision

There is an opportunity for a one-time waiver for up to a year, determined on a case-by-case basis, as well as for the Director of National Intelligence to issue waivers, though that is one of the agencies that has said Chinese telecoms pose a national security threat due to the influence of the Chinese government.    

The rule will apply to contracts that usually do not trigger the rule because they are relatively small purchases, and to contracts for off-the-shelf purchases. The Administration has concluded that there is an unacceptable level of risk that is not mitigated by the size of the purchase or the fact that the equipment and/or service "has been sold or offered for sale to the general public, either in the same form or a modified form."  

No big surprise, but the FCC has decided that the tech of Chinese telecoms Huawei and ZTE are indeed national security threats and will exclude them from broadband subsidy money, starting immediately. 

The FCC had tentatively, and unanimously, concluded that was the case, as has the Trump Administration and many members of Congress. It has also set up a mechanism to figure out other suppliers who might need similarly to be excluded. 

Related: ORAN 5G Bill Added to Must-Pass Legislation 

Both Huawei and ZTE have argued they are not controlled by, or beholden to, the Chinese government and are thus not a security risk, but found few takers for the argument among policymakers or legislators. 

The FCC proposed to prevent any carrier from getting Universal Service Fund broadband subsidies if their network buildouts included "equipment or services from companies posing a national security threat," tentatively concluding Huawei and ZTE fitted the description. 

Congress subsequently voted to mandate that exclusion of suspect tech and the FCC plans to declare its already-in-process exclusion fulfills that mandate. 

"[T]he FCC’s Public Safety and Homeland Security Bureau formally designated two companies—Huawei Technologies Company (Huawei) and ZTE Corporation (ZTE), as well as their parents, affiliates, and subsidiaries—as covered companies for purposes of the agency’s November 2019 ban on the use of universal service support to purchase equipment or services from companies posing a national security threat," the commission said "As a result of today’s action, money from the FCC’s $8.3 billion a year 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 these suppliers." 

“Both companies have close ties to the Chinese Communist Party and China’s military apparatus, and both companies are broadly subject to Chinese law obligating them to cooperate with the country’s intelligence services," said FCC chairman Ajit Pai. "We cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our critical communications infrastructure." 

Both Congress and the FCC are working on a process, and funding, a rip and replace program to get suspect tech out of existing networks.  

“Network security is national security," said FCC commissioner Geoffrey Starks. "Today’s actions will help secure our networks against new threats from Huawei and ZTE equipment. We must not, however, lose sight of the untrustworthy equipment already in place. Last year, I called for the FCC to find the untrustworthy equipment in our networks, to fix the problem by instituting a replacement program, and to fund the replacement of that equipment. Find it. Fix it. Fund it," he said. "The Commission has taken important steps toward identifying the problematic equipment in our systems, but there is much more to do."

Related: ORAN Bill Added to Must-Pass Legislation

That includes moving to an ORAN approach to network architecture, he said, which will "use standardized hardware and interoperable interfaces to enable networks to combine equipment from multiple vendors."  

“We cannot treat Huawei and ZTE as anything less than a threat to our collective security,” said Commissioner Brendan Carr. “Communist China intends to surveil persons within our borders and engage in large-scale, industrial espionage. Nothing short of prohibiting subsidized Huawei and ZTE gear from our networks could address this serious national security threat. After all, Chinese law does not meaningfully restrain the Communist regime given its authoritarian nature." 

“This is a great development and a critical step forward in protecting America's national and economic security," said Mike Rogers, chairman of 5G Action Now and former chair of the House Intelligence Committee. "I first warned about the threat of Huawei and ZTE in 2012 with my colleagues on the House Intelligence Committee. Since then, the threat posed by these companies and the Chinese Communist Party, with which they are directly linked, has only grown. I applaud the FCC and Chairman Pai on this decision.”

The FCC plans to signal to Congress that the commission's ongoing procedure to prevent broadband subsidy money from being used to subsidize suspect tech in U.S. networks effectively implements Congress's subsequent mandate to do the same thing. 

That is according to the FCC's agenda for the July 16 public meeting. 

The FCC back in November 2019 voted to ban the use of Universal Service Funds for equipment or services from companies that pose a national security threat to networks or the supply chain, initially tentatively concluding that at least two companies, Chinese telecoms Huawei and ZTE, met that definition. 

The President signed the Hill bill March 12, a bill that sounded pretty redundant, but also provided its bipartisan imprimatur on the FCC action. 

Related: FCC Seeks Comment on Excluding Suspect Tech 

The FCC will vote on a declaratory ruling that concludes that the FCC order fulfills its obligation to implement the Secure and Trusted Communications Networks Act (Secure Networks Act), which put Congress' stake in ground the FCC had already plowed and planted. 

The FCC item also includes a Further Notice of Proposed Rulemaking (FNPRM) seeking comment on implementing other sections of the act.  

One thing both the FCC and Congress anticipated was a further effort to rip and replace suspect tech from existing networks. FCC Chairman Ajit Pai said when announcing the item that he hoped Congress will follow up with an estimated $2 billion to pay for "small, rural carriers" to scrub that insecure equipment. The Hill bill had anticipated that figure at $1 billion. 

The newly-formed Open Radio Access Network [ORAN] Policy Coalition is urging the FCC to use its implementation of the Secure and Trusted Networks Act to promote open, interoperable, software solutions for a secure 5G supply chain.  

Related: House Republicans Praise New 5G Security Coalition 

Congress basically mandated the FCC to do what it was already planning to, but will also fund the process, which the FCC definitely needed. 

Related: Commerce Hits Huawei with New Restrictions 

The idea both in an FCC item that preceded the bill, and in the bill, is to prevent government broadband subsidy to be used by any carrier planning to use suspect tech (at the outset the FCC proposed putting Chinese telecoms Huawei and ZTE in that category) in their broadband buildouts, as well as to come up with a way, and the money, to fund "rip and replace" or "offramp and replace" that technology from existing networks. 

At the same time, the FCC is looking at open Radio Access Networks, which "softwire" as it were rather than hardwire network architecture using radio waves rather than physical connections, thus virtualizing more of the network and making it more software dependent, a space the U.S. dominates, rather than hardware-dependent, where China, and particularly Huawei, dominate. 

That is the coalition's sweet spot, obviously. 

"[I]t is a national security imperative that U.S. communications networks provide secure and reliable connectivity," the coalition told the FCC in comments on its implementation of the Secure and Trusted Networks Act, pointing out that open and interoperable RAN solutions are ready to be the replace in "rip and replace." 

The coalition wants the FCC to develop a list of categories of equipment and services that includes open RAN and virtual solutions and avoid picking "winners and losers," which it arguably would be if it went with a list of specific technologies and suppliers rather than categories. 

The Computing Technology Industry Association (CompTIA) also asked the FCC to avoid picking tech winners and losers, and to do so by using categories rather than lists of specific tech. 

The coalition currently comprises Airspan, Altiostar, AT&T, AWS, Cisco, CommScope, Dell, DISH Network, Facebook, Fujitsu, Google, IBM, Intel, Juniper Networks, Mavenir, Microsoft, NEC Corporation, NewEdge Signal Solutions, NTT, Oracle, Parallel Wireless, Qualcomm, Rakuten Mobile, Samsung Electronics America, Telefónica, US Ignite, Verizon, VMWare, Vodafone, World Wide Technology, and XCOM-Labs. 

The Computing Technology Industry Association (CompTIA) has given the FCC some advice on how it should approach a "rip and replace" regime for getting existing suspect tech out of U.S. networks. 

It was providing comment on the FCC request for input on how such a regime would operate. The FCC has already voted to exclude such tech--Chinese telecoms Huawei and ZTE were first to be tentatively fingered--to be funded by Universal Service fund broadband subsidy going forward, but has only proposed the rip-and-replace regime for networks with existing tech, seeking comment on just how to do it given that at the same time it was proposing the regime, Congress mandated it in the Secure and Trusted Communications Networks Act. 

Realted: FCC Seeks Comment on Excluding Suspect Foreign Tech 

For one thing, said the group, the FCC should develop a list of categories of replacement technology, rather than specify suggested replacements, which would constitute and approved product list 9APL). CompTIA said the latter would be "counterproductive, contrast with the approach taken by other agencies in addressing suppliers of concern, impair innovation, and hurt technology neutrality." 

That is because an APL can "misalign supply chain risk decision-making, would likely lead to over- and under-inclusion of products on the list, and would unnecessarily distort the market," said the group. 

It also said such a category list should be broad and technology neutral and include hardware and software, "both for statutory reasons and because of emerging technology trends." 

The FCC is looking at virtualizing some of the core network functions, making them more software-based, a sector dominated by the U.S., rather than hardware, which is dominated by foreign suppliers, notably Chinese telecom Huawei. 

Sens. Ted Cruz (R-Tex.) and Josh Hawley (R-Mo.)  are introducing a bill, the Countering Chinese Attempts at Snooping (C-CAS) Act of 2020, that would further crack down on Chinese telecoms Huawei and ZTE and any other company that the State Department identifies as controlled by the Chinese Communist Policy. 

The bill would prevent federal employees from conducting any official business over platforms "run" by Huawei, ZTE, Tencent, and any other suspect tech. 

The bill requires the Secretary of State to create a list of Chinese tech companies that are determined to enable the Chinese Communist Party to conduct espionage. That is the list of companies whose technology government employees are prevented from using. 

It would also prevent any taxpayer dollars going to fund U.N. contracts with any suspect tech supplier. 

Related: FCC Seeks Input on Excluding Foreign Tech 

The FCC has already moved to prevent government broadband subsidy money going to Huawei, ZTE, and other suspect tech and has moved to revoke the licenses of some Chinese telecom nets linking to U.S. networks, and Congress is excluding them from government contract money. 

"The United Nations' decision to partner with Tencent, a glorified surveillance arm of the Chinese Communist Party, is stupid and dangerous," said Hawley. "Chinese technology companies like Tencent and Huawei actively conspire with the CCP to conduct international surveillance and present an ongoing threat to the United States and our allies. American taxpayer money should not fund UN contracts that benefit the Chinese Communist Party." 

“Preventing U.S. federal employees from conducting official business over platforms controlled by Chinese Communist Party-backed companies is smart policy," said Mike Rogers, chairman of 5G Action and former chairman of the House Intelligence Committee. "We must look at, and fully appreciate, the threat posed by companies like Huawei, ZTE, and Tencent to America’s national and economic security. This legislation is an important step in that direction.”

Building on its rejection of China Mobile USA's applications to provide telecom services between the U.S. and other countries, the FCC is suggesting other such license applications are suspect, too. 

The FCC said Friday (April 24) that it has issued "show cause" orders to China Telecom Americas, China Unicom Americas, Pacific Networks, and ComNet directing them to justify why the FCC should not start proceedings to revoke their licenses to operate in the U.S. as well. 

Related: New Bill Pumps $750 Into U.S. Telecom 

The Executive Branch has recommended that China Telecom Americas' license be revoked. 

As with ZTE and Huawei, whose tech the FCC has tentatively found to be suspect and in need of replacing, the FCC's issues with China Mobile were concerns that current or potential Chinese government influence could make them a national security threat to the network security of critical 5G nets in the U.S. 

Related: Huawei Opposes FCC Rip and Replace 

Foreign entities providing telecommunications services—or seeking to provide services—in the United States must not pose a risk to our national security,” said FCC chairman Ajit Pai. “The Show Cause Orders reflect our deep concern—one shared by the U.S. Departments of Commerce, Defense, Homeland Security, Justice, and State and the U.S. Trade Representative—about these companies’ vulnerability to the exploitation, influence, and control of the Chinese Communist Party, given that they are subsidiaries of Chinese state-owned entities. We simply cannot take a risk and hope for the best when it comes to the security of our networks.” 

The companies have 30 days to respond to the FCC letters.  

The FCC is seeking comment on how it should square its approach to preventing Universal Service Fund money from going to carriers that use Huawei and ZTE technology with Congress' mandate to do the same thing.

The Wireline Competition Bureau Monday (April 13) sought comment on the impact of the Secure and Trusted Communications Networks Act on its rulemaking on "Protecting Against National Security Threats to the Communications Supply Chain."

Related: FCC Seeks Info on ZTE, Huawei Tech

Back in November, the FCC voted unanimously to prohibit the USF support of equipment or services from any company that posed a national security risk to U.S. networks or the supply chain. It initially designated ZTE and Huawei to be such companies. It also sought comment on a program to reimburse current USF recipients for ripping and replacing that technology.

Then, on March 12, Congress passed the Act, which as the White House described it upon the President's signature, sounded pretty redundant. The White House said it "prohibits certain Federal subsidies from being used to purchase communications equipment or services posing national security risks; and establishes a reimbursement program for the replacement of communications equipment of services posing such risks." 

The competitive carriers association told Congress this week that carriers using government broadband deployment subsidy funds being asked by Congress to replace suspect tech (Huawei and ZTE notably) have access to the money up front. 

That money is coming from a new fund created by Congress in the Secure and Trusted Communications Networks Act, which passed the Senate last week. The bill essentially provides the funding for a program the FCC had already voted to implement removing untrusted suppliers from the subsidized supply chain.

Related: 5G Bills Pass House 

In written testimony for a hearing on 5G network security in the Senate Commerce Committee Wednesday (March 4), CCA president Steven K. Berry said that "Such access to needed resources recognizes that networks that were not initially economical to construct absent support mechanisms are unlikely to be able to finance the project management process without resources available long before certification that covered  elements have been completely removed." 

He says that includes prioritizing replacement of core network and routing tech first, then radio and edge elements. 

"While those inside the beltway often refer to the process as “rip and replace,” said Berry, "in practice carriers will typically need to “replace, then rip” to ensure that the consumers served by rural carriers do not lose service."

U.S.-led efforts to banish Chinese technology vendor Huawei have been unsuccessful, according to figures released in a new report by research company Dell’Oro Group.

Huawei steep growth arc has been slowed by Western sanctions. But it continued to hold a market share lead in the global telecom equipment supply business in 2019, controlling 28% of the market—flat with 2018. And Huawei’s revenue continued to grow at a time when Western suppliers including Cisco, Nokia and Ericsson each saw slippage.

Notably, ZTE—another Chinese company that, while less so than Huawei, has also been accused by the Trump Administration for helping the Chinese government conduct espionage—saw its market share rebound by 2% in 2018.

“The efforts by the U.S. government to curb Huawei’s rise has so far had mixed results—we estimate Huawei’s overall telecom equipment share continued to improve in 2019, but the pace of the 2019 share growth was weaker than its average 2014-2019 share growth," Dell'Oro Group said in a note sent to journalists. 

U.S.-led efforts to banish Chinese technology vendor Huawei have been unsuccessful, according to figures released in a new report by research company Dell’Oro Group.

Huawei steep growth arc has been slowed by Western sanctions. But it continued to hold a market share lead in the global telecom equipment supply business in 2019, controlling 28% of the market—flat with 2018. And Huawei’s revenue continued to grow at a time when Western suppliers including Cisco, Nokia and Ericsson each saw slippage.

Notably, ZTE—another Chinese company that, while less so than Huawei, has also been accused by the Trump Administration for helping the Chinese government conduct espionage—saw its market share rebound by 2% in 2018. 

“The efforts by the U.S. government to curb Huawei’s rise has so far had mixed results—we estimate Huawei’s overall telecom equipment share continued to improve in 2019, but the pace of the 2019 share growth was weaker than its average 2014-2019 share growth," Dell'Oro Group said in a note sent to media. 

Why does this matter to the OTT market? To the extent that many leading video companies are telecoms, the exclusion of a leading global supplier to the U.S. market has business implications, particularly as video becomes a more globally situated enterprise. 

Sen. Josh Hawley (R-Mo.) has released the witness list for his March 4 hearing on Chinese influence on critical infrastructure, ominously named: Dangerous Partners: "Big Tech & Beijing." 

Related: Carr, O'Rielly Raise Big Tech Red Flags at CPAC 

That is the hearing for which Apple and Chinese app company Tik Tok declined to send representatives--as they did to a November hearing on a similar topic--much to the displeasure of Hawley, who chairs the Judiciary Committee's Crime and Terrorism Subcommittee. 

As it stands, there are no tech company reps in the witness list. 

On Hawley's nice list, at least for showing up, are witnesses (panel one) Clyde Wallace, deputy assistant director of the FBI's cyber division; Bryan Warer, assistant director for cybersecurity for CISA; Adam Hickey, deputy assistant attorney general of the Department of Justice's National Security Division; and (panel two) Alex Stamos, director of the Stanford Internet Observatory; Samm Sacks, cybersecurity policy and China digital economy fellow, New America; and Derek Scissors, resident scholar, American Enterprise Institute. 

Hawley has been one of the most vocal critics of Big Tech, including Chinese telecom technology in U.S. communications networks. 

The Senate has passed the H.R. 4998, the Secure and Trusted Communications Networks Act of 2019, that body's version of the bipartisan House bill that essentially directs the FCC to do what the FCC has already decided to do: Scrub Huawei and ZTE from USF-funded broadband buildouts. The bill ensure there is money--$1 billion for smaller operators--to compensate suspect tech rippers and replacers. 

The House bill passed in December, so it now goes to the President's desk for his signature. 

Related: NCTA Points to Suspect Tech Ban's Unintended Consequences 

According to the office of Senate Commerce Chairman Roger Wicker (R-Miss.), the bill: 

1. "Prohibits the Federal Communications Commission (FCC) from subsidizing the acquisition or maintenance of telecommunications equipment or services from untrusted suppliers. 
2. "Creates a program to reimburse telecommunications providers with fewer than two million customers. These providers will remove equipment that poses a national security risk from their networks to replace it with equipment from trusted suppliers.
3. "Establishes an information sharing program for telecommunications providers, particularly small and rural operators, to obtain information regarding potential security risks and vulnerabilities to their networks." 
4. “Telecommunications equipment from certain foreign adversaries poses a significant threat to our national security, economic prosperity, and the future of U.S. leadership in advanced wireless technology,” Wicker said in a statement. “By establishing a ‘rip and replace’ program, this legislation will provide meaningful safeguards for our communications networks and more secure connections for Americans. I thank my colleagues on both sides of the aisle for coming together to help move this bill to the President’s desk.” 

In some sense, the bill is carrying coals to Newcastle. The FCC already voted unanimously back in November to ban suspect tech from networks, come up with a list of suspect tech--led by Huawei and ZTE--and a framework for compensating carriers for ripping and replacing that technology. 

In fact, the FCC just this week started collecting input from carriers on just how much of that suspect tech is in their networks to help it come up with that rip and replace framework. 

“As our nation becomes more and more reliant on next-generation telecommunication networks, we need to be doing all that we can to make sure that our networks are secure,” said Sen. Mark Warner (D-Va.), ranking member of the Senate Intelligence committee who has pushed for better securing networks against untrusted suppliers. “That includes making sure that we are not allowing our foreign adversaries to infiltrate these networks, and that as a nation, we are not dependent on infrastructure supplied by foreign vendors. This important piece of legislation will help ensure the security of our networks all across the country by making it possible for providers in small and rural communities to rip and replace equipment that might pose a national security risk. I’m very encouraged by this bill’s passage and I look forward to seeing it get signed into law as quickly as possible.”

“I commend the Senate for passing the Secure and Trusted Communications Networks Act. CCA members care deeply about network security, and this legislation provides much-needed guidance to all carriers, and importantly, resources to replace covered network elements," said Competitive Carriers Association President Steven K. Berry. "This is a significant milestone to address security issues identified by Congress and the Administration. I thank the Senate for its action to send this bill to the President’s desk for enactment, and commend the leadership of Chairman [Frank] Pallone, Chairman [Roger] Wicker, and several other leading members of Congress to advance this important legislation.”

The Senate Commerce Committee will hold a hearing next week on "5G Supply Chain Security: Threats and Solutions." 

The committee will look at the integrity of that supply chain and the federal government's role in mitigating risks to telecommunications equipment in the transition to a 5G, IoT world. 

Related: FCC Seeks Info on ZTE, Huawei 

The federal government has already taken a number of steps, including 1) the Commerce Department decision to put Chinese telecoms (and 5G equipment supplier) ZTE and Huawei on a list of suspect companies that the U.S. should not be dealing with; 2) the FCC's decision to tentatively disallow the use of broadband subsidy funds for purchase of ZTE, Huawei equipment, and potentially from others identified as national security risks; and 3) legislation that prevents the use of government contract money for suspect tech.

Related: Suspect Tech Unwelcome in Government Contracts 

Witnesses for the March 4 hearing, subject to change, are: Steven Berry, Competitive Carriers Association; Jason Boswell, Ericsson; Rick Corker, Nokia; and Dr. James Lewis, Center for Strategic and International Studies. 

The FCC has begun collecting info on technology from Chinese suppliers Huawei and ZTE, which it has tentatively branded national security threats.

The concern is that having suspect tech in a world of 5G and IoT could be an ongoing security problem. 

The information the FCC is requiring/requesting includes "whether carriers own or are using equipment or services from Huawei or ZTE; the type of such equipment or services; the costs associated with purchasing and/or installing such equipment and services; and the costs associated with removing and replacing such equipment and services."

Related: Huawei Says FCC Ban Could Be Unconstitutional

That follows its unanimous vote to propose requiring carriers getting Universal Service Fund broadband subsidies to remove and replace existing tech from those suppliers. That came at the same time it voted on a final order declaring that no USF money could be used on network buildouts with those companies' technology.

The FCC plans to reimburse carriers for the rip and replace, so the data collection is a way to help it identify the scope of the program and design the reimbursement regime, as well as to identify "any other potential FCC actions to protect the communications supply chain."

The reporting is mandatory for carriers in the USF program, but voluntary for others.

“Huawei and ZTE have been initially designated as threats to national security. Given that those designations may become final this spring, we are moving forward quickly to identify where equipment and services from these suppliers are embedded in our communications networks and, where they do have a foothold, to be in a position to help remove them,” said FCC chair Ajit Pai. “Today we’ve begun to collect the data we will need to protect our networks and protect the American people.”

While the info collection is voluntary for non-USF participants with ZTE and Huawei tech in their networks, the FCC has asked whether it may need to extend the ban beyond the USF program to other networks with imbedded national security risks, so it would be helpful for the FCC to know where that tech is, too, while it is collecting the USF-related data.

The commission has created this portal to collect the information.

“Huawei and ZTE represent clear threats to our national and economic security," said Mike Rogers, chairman of 5G Action Now and former chair of the House Intgelligence Committee. "Getting a handle on what they are doing and where they are within our communication networks is a critical step to mitigating the risks they represent. This is a smart step by the FCC.”

NCTA-The Internet & Television Association said the FCC should not expand its ban of suspect tech identified as a threat to network security beyond participants in the FCC's Universal Service Fund broadband subsidy program. 

In comments on the FCC's decision to impose such a ban, NCTA said the FCC should "remain focused" on equipment and services provided by USF-eligible communications nets. It said applying it to all networks regardless of whether or not the USF funds exceeds the FCC's authority and would duplicate efforts by other agencies. 

Related: Huawei Says FCC Ban May Be Unconstitutional

"There is no legal basis for the Commission to move from conditioning eligibility for a program it is statutorily authorized to administer on removal of certain equipment, to simply banning equipment or components from any company’s network," the NCTA said. "There is no legal basis for the Commission to move from conditioning eligibility for a program it is statutorily authorized to administer on removal of certain equipment, to simply banning equipment or components from any company’s network."  

As part of its vote to ban suspect tech, the first two identified as ZTE and Huawei, the FCC sought input on whether it should extend the ban beyond USF recipients on the theory that it was just as much a security threat in those networks. 

But NCTA suggests the USF ban is already the government inserting itself into the marketplace and it should probably stop there.   

Related: FCC Seeks Comments on ZTE, Huawei Ban

It said the FCC "made a deliberate decision to limit its intrusion into the marketplace by imposing restrictions only on use of USF funds to purchase Huawei/ZTE equipment and services." 

While it said the FCC has well-established authority to "place reasonable public interest conditions on the use of USF funds," it lacks the authority to "move from conditioning eligibility for a program it is statutorily authorized to administer on the removal of certain equipment, to flatly banning equipment or components in any company’s network – irrespective of whether they receive USF support." 

The FCC asked whether the Communications Assistance for Law Enforcement Act (CALEA) gives it such authority. NCTA said no, nothing in CALEA allows the FCC to dictate the design of communications nets or limit the types of equipment they can use. 

NCTA pointed out that a blanket ban on the use of Huawei and ZTE or other suspect tech would have "far-reaching" consequences. It pointed out that Congress has not gone that far, and the FCC shouldn't either. 

"The breadth of authority required to underpin a sector-wide ban on equipment and services from covered companies is greater than any granted by Congress to date to federal agencies to address this problem. Accordingly, the Commission should refrain from taking such a step," it said. 

The FCC also asked whether the ban should extend to a government-funded rip and replace of technology already in USF-funded nets. NCTA raises a red flag on "further enmeshing the government in the private sector." 

Related: Commerce Releases Suspect Tech Vetting Framework

He said rip and replace was "rife with the potential for unintended consequences, including raising network equipment costs (and their attendant higher prices to consumers), delaying or burdening network upgrades (thereby deferring the benefits of innovation and advanced services), and possible distortions of the competitive marketplace via inaccurate or misleading statements regarding the possible addition of new companies or equipment components to the blacklist." 

NCTA chose to characterize the ban as a "blacklist" and "intrusion" in various places in the filing. And closed its comments by saying the FCC should "carefully consider these and other potential unforeseen effects of upending the market for communications network equipment and components." 

Some high-profile senators are proposing legislation to put over $1 billion toward funding alternatives to the 5G technology from Chinese telecoms Huawei and ZTE that the U.S. is looking to scrub from its networks due to national security concerns. 

Related: Kratsios Says U.S., Allies, Must Confront Chinese Tech 

A bipartisan group of senators overseeing national security issues have introduced the Utilizing Strategic Allied (USA) Telecommunications Act. 

The bill would require the FCC to put 5% of the proceeds from any competitive spectrum auctions over a five-year period (or $750,000,000, whichever is greater) into a Public Wireless Supply Chain Innovation Fund, plus another $500 million in Multilateral Telecommunications Security Fund.

Related: Trump Administration Allows U.S. Tech Supplies to Huawei 

The National Telecommunications & Information Administration would be authorized to draw from the Supply Chain Fund fund to promote the development of interoperable 5G technology from trusted suppliers and open standards-based equipment. 

The Secretary of State could draw from the Security Fund, which would go toward working with "foreign partners" to accelerate the adoption of trusted and secure equipment globally. 

The bill would also: 

1. "Create a transition plan for the purchase of new equipment by carriers that will be forward-compatible with forthcoming O-RAN equipment so small and rural carriers are not left behind; 

2. "Increase U.S. leadership in International Standards Setting Bodies (ISSBs) by encouraging greater U.S. participation in global and regional telecommunications standards forums and requiring the FCC write a report to Congress with specific recommendations; 

3. "Expand market opportunities for suppliers and promote economies of scale for equipment and devices by encouraging the FCC to harmonize new commercial spectrum allocations with partners where possible, thus promoting greater alignment with allies and driving down the cost of Huawei alternatives." 

The senators see the bill as crucial to preventing China from winning the race to 5G with technology that could compromise the security of the U.S. and its allies. 

"Heavily subsidized by the Chinese government, Huawei is poised to become the leading commercial provider of 5G, with far-reaching effects for U.S. economic and national security," the senators said in introducing the bill. "With close ties to the Communist Party of China, Chinese state-directed technology companies present unacceptable risks to our national security and to the integrity of information networks globally. However, U.S. efforts to convince foreign partners to ban Huawei from their networks have stalled amid concerns about a lack of viable, affordable alternatives." 

“When it comes to 5G technology, the decisions we make today will be felt for decades to come," said Sen. Richard Burr (R-N.C.), chairman of the Intelligence Committee. "The widespread adoption of 5G has the potential to transform the way we do business, but also carries significant national security risks. Those risks could prove disastrous if Huawei, a company that operates at the behest of the Chinese government, military, and intelligence services, is allowed to take over the 5G market unchecked. This legislation will help maintain America’s competitive advantage and protect our national security by encouraging Western competitors to develop innovative, affordable, and secure 5G alternatives." 

"It is imperative that Congress address the complex security and competitiveness challenges that Chinese-directed telecommunication companies pose,” said Sen. Mark R. Warner (D-Va.), who co-founded wireless company Nextel and is vice chairman of the Intelligence Committee. “We need to move beyond observing the problem to providing alternatives for U.S. and foreign network operators.” 

Also backing the bill are Sens. Marco Rubio (R-Fla.), a member of the committee; Bob Menendez (D-N.J.), ranking member of the Foreign Relations Committee; Michael Bennet (D-Colo.), and John Cornyn (R-Tex.), both members of the Intelligence Committee. 

The FCC has already voted to exclude broadband subsidy funds to any network buildouts using nontrusted suppliers, the first of those identified as ZTE and Huawei, though it has sought comment on that designation before making it official. It is also considering whether to extend that ban beyond those subsidy funds, and how to fund a rip-and-replace of subsidy-funded networks already using those "untrusted" suppliers.

The FCC is seeking comment on its initial designation's of Chinese telecoms Huawei and ZTE as subject to its ban on carriers using broadband subsidy money on suspect tech. 

The FCC will look to congressional enactments--like bans on government contract money--and guidance from national security and law enforcement in identifying other companies that pose a threat. The ban applies to tech in both wireless and wireline, though must of the suspect tech is in the wireless space.  

The Public Safety and Homeland Security Bureau said late Friday (Jan. 3) that comments on the ZTE and Huwaei and ZTE initial designation are due Feb. 3. That was 30 says after publication of the designation order in the Federal Register, which happened Jan. 3. The FCC will then have 120 days after that Feb. 3 deadline to come up with the final designation. 

The FCC approved the broadband subsidy ban last November.  

By "suspect," the FCC says it means equipment, or services, that pose a national security threat to networks or the equipment supply chain, and said that ZTE and Huawei were the first to fit that description and would be subject to the ban after stakeholders were allowed to comment.  

Related: Commerce Releases Suspect Tech Vetting Framework 

The FCC is pondering exactly how to do a "remove and replace" program for switching out new tech, and will use the expertise it gained in the broadcast incentive auction equipment replacement program to inform that. 

The FCC is also proposing to adopt an information collection system to help identify eligible telecommunications carriers (ETCs) that have Huawei and ZTE equipment in their networks.  

FCC officials speaking on background said it already knows there are "a number of smaller rural wireless carriers" that use Huawei equipment, for example, but will use the comment period to get a better handle on that number.   

Related: President Moves to Block Deals for Suspect Tech 

Asked whether the FCC was contemplating extending the ban beyond USF fund recipients, an FCC official said remove and replace applies only to ETCs for now, but welcomes input on whether the ban should be broader. 

FCC Chairman Ajit Pai has circulated a long-awaited order that would prevent broadband subsidy money to be spent on equipment from Chinese telecoms ZTE and Huawei, calling them untrusted vendors, as well as on other potential security threats to 5G networks. 

The definition of banned equipment is "any equipment or services produced or provided by a covered company—i.e., one that poses a national security threat to the integrity of communications networks or the communications supply chain."

The FCC's Public Safety and Homeland Security Bureau would issue an initial designation of national security threat--which this order does for Huawei and ZTE. Those companies, or any future companies so designated, will have 30 days to respond, then the bureau will have 120 says to issue a final designation.

The FCC worked with national security agencies and law enforcement agencies on the item. The FCC will look to congressional enactments--like bans on government contract money--and guidance from national security and law enforcement in coming up with a designation for future companies. 

The plan is to vote on the item at the FCC's Nov. 19 meeting. 

If it is adopted, ZTE and Huawei will be put on the 30-day clock to respond.

Asked why Huaweu and ZTE topped the list, FCC officials cite their ties to the Chinese government and military, the fact that Congress had prohibited funds in government contracts to be spent on their tech, that Huawei was on the Department of Commerce's Entity List, that the leaders of the top six U.S. intelligence agencies said they were a security threat, and more.

The ban applies to tech in both wireless and wireline, though must of the suspect tech is in the wireless space. 

Related: Starks Says Suspect Tech should Be Found, Fixed 

The item, which he has circulated to the other commissioners for a vote at the next public meeting, would also include a draft Further Notice of Proposed Rulemaking that would propose requiring certain carriers receiving Universal Service Fund broadband subsidies to remove existing suspect tech and asks for input on ow to provide financial assistance to help carriers migrate to "more trusted suppliers." 

The FCC is pondering exactly how to do a "remove and replace" program for switching out new tech, and will use the expertise it gained in the broadcast incentive auction equipment replacement program to inform that.

The FCC is also proposing to adopt an information collection system to help identify eligible telecommunications carriers (ETCs) that have Huawei and ZTE equipment in their networks. 

FCC officials speaking on background said it already knows there are "a number of smaller rural wireless carriers" that use Huawei equipment, for example, but will use the comment period to get a better handle on that number.  

Related: President Moves to Block Deals for Suspect Tech 

“When it comes to 5G and America’s security, we can’t afford to take a risk and hope for the best," said Pai. "We need to make sure our networks won’t harm our national security, threaten our economic security, or undermine our values. The Chinese government has shown repeatedly that it is willing to go to extraordinary lengths to do just that. And Chinese law requires all companies subject to its jurisdiction to secretly comply with demands from Chinese intelligence services. As the United States upgrades its networks to the next generation of wireless technologies—5G—we cannot ignore the risk that that the Chinese government will seek to exploit network vulnerabilities in order to engage in espionage, insert malware and viruses, and otherwise compromise our critical communications networks. 

“The FCC has a part to play in combating this risk by ensuring that its $8.5 billion Universal Service Fund does not underwrite national security threats.  

FCC Commissioner Jessica Rosenworcel signaled the item was as good as far as it went. 

“The FCC is moving forward after more than a year and a half with its proposal to ensure that our universal service fund, which supports deployment in rural areas, will not be used to purchase insecure network equipment," she said. "But we need cybersecurity policies that target all our network providers—not just our universal service recipients. In addition, we need to be mindful that in a global economy, our networks will still connect to insecure equipment abroad. So we should start researching how we can build networks that can withstand connection to equipment vulnerabilities around the world, including virtualizing the radio access part of our networks.”

Asked whether the FCC was contemplating extending the ban beyond USF fund recipients, an FCC official said the remove and replace applies only to ETCs for now, but it is seeking comment on whether the ban should be broader.

Sens. Mark Warner (D-Va.) and Mike Crapo (R-Idaho) are looking to take a holistic approach to plug up the security holes in the U.S. tech supply chain. 

They have introduced the Manufacturing, Investment, and Controls Review for Computer Hardware, Intellectual Property and Supply (MICROCHIPS) Act (S. 2316), which would "guard against attempts by the People’s Republic of China and others to undermine U.S. national security by exploiting and penetrating U.S. supply chains."

Related: Trump, Tech Companies Agree Huawei Needs Restrictions

Specifically, the bill:

"Directs the Director of National Intelligence, DOD and other relevant agencies to develop a plan to increase supply chain intelligence within 180 days;

"Establishes a National Supply Chain Security Center within the Office of the Director of National Intelligence to collect supply chain threat information and disseminate it to agencies with the authority to intervene; and

"Makes funds available under the Defense Production Act for federal supply chain security enhancements."

In announcing the bill, the senators did not identify ZTE or Huawei by name, but both are Chinese telecom suppliers whose connections to the Chinese government have raised red flags with U.S. national security officials and led Congress to exclude them from government contracts.

Related: Sen. Warner Warns of Using Huawei as Trade Leverage

They did say that "Chinese companies export telecommunication technology equipment, software, hardware and services used in the United States, and hope to export fifth generation technology (5G) to the U.S. that could potentially harm and expose both consumer and U.S. military information."

FCC Commissioner Geoffrey Starks will convene stakeholders next week to work on identifying and preventing insecure equipment from inhabiting U.S. networks, particularly that already in the pipeline. 

The FCC is already contemplating excluding carriers with such equipment from tapping into broadband subsidies, but the issue is broader and Starks told a Federal Communications Bar Association gathering that the there needs to be a concerted effort to not only keep it out but weed it out, an effort he has branded: Find it. Fix it. Fund it. 

He said that constitutes understanding the scope of the threat; "transitioning" carriers away from insecure equipment already in their networks, which he concedes is easier said than done; and give the small carriers who have used suspect tech due to its lower price some financial help with the expense of rooting it out. 

Starks pointed out the FCC was still considering whether to exclude companies like Chinese telecoms ZTE and Huawei from Universal Service Fund support, as well as the FCC's decision to deny an application of China Mobile to interconnect with U.S. networks. 

He also pointed to the 2019 National Defense Authorization Act, which prevents government money to procure suspect tech and the President's executive order prohibiting buying telecom equipment considered to be a national security risk. 

But he said none of that gets to the issue of replacing the technology already in the system. 

"The clock is ticking, and it has been for some time," he said. "We need to act as quickly as practicable."

A bipartisan bill has been introduced that would create a $700 million fund to help telecoms remove Huawei equipment from their networks, push the FCC to finalize its proposal to ban telecoms using suspect tech from Universal Service Fund broadband subsidies, and making it U.S. policy not to use Huawei, ZTE or their affiliates in 5G networks. 

The bill is at the intersection of the Trump Administration and Congress's push to win the race to 5G with the concern that Chinese telecoms are both key players in those new networks and security threats because of their connections to the Chinese government and its mandate that industry abet spying. 

While there have been numerous efforts to prevent future nets from containing suspect Chinese tech, scrubbing it from current nets could be expensive, particularly from the smaller telecoms for whom the Chinese telecoms subsidized low prices were a cost-effective alternative. The fund would help address that concern.  

Related: Huawei Says Executive Order Will Handicap U.S. in 5G Race

The United States 5G Leadership Act of 2019 is co-sponsored by Sens. Roger Wicker (R-Miss.), chairman of the Senate Commerce Committee, Tom Cotton (R-Ark.), Mark Warner (D-Va.), Ed Markey (D-Mass.) and Dan Sullivan (R-Alaska). 

Specifically, the bill:  

1. "Establishes U.S. policy to promote the deployment of secure commercial 5G networks and the development of the Information and Communications Technology (ICT) sector in the U.S. 

2. "Establishes U.S. policy that American 5G networks should not include equipment or services provided by Huawei, ZTE, or their affiliates.

3. "Requires the Federal Communications Commission (FCC) to finalize its rulemaking that would prohibit the use of Universal Service Fund subsidies to buy equipment or services from providers who pose a national security risk."

 "4. "Establishes the Supply Chain Security Trust Fund grant program to help U.S. communications providers remove Huawei equipment from their networks — makes available up to $700 million from future spectrum auctions for this purpose."

5. "Requires a report on steps that the Federal government is taking to ensure the secure deployment and availability of 5G networks.

6. "Establishes an interagency program – led by the Department of Homeland Security – to share information regarding security, risks, and vulnerabilities with U.S. communications providers.

7. "Prioritizes funding to enhance U.S. representation at international 5G standards setting bodies, such as the International Telecommunications Union."

Communications companies were applauding the President's executive order meant to weed suspect tech out of the telecom supply chain, an issue the President declared a national emergency.

The President declared the issue a national emergency in a letter to Congress, which has already taken some steps to do some weeding, preventing the use of suspect tech in government contracts. 

The Administration said the effort is company and country agnostic, but China is prominent in the unspoken conversation. 

The order comes as the White House is engaged in a trade tussle with China over U.S. tariffs, including on tech products, but White House officials have said the two are not connected. 

“TIA applauds the President for issuing today’s executive order on communications equipment security," said Telecommunications Industry Association SVP Cinnamon Rogers. "We fully support the federal government taking action against specific suppliers that are deemed to pose a national security risk to the United States. Today’s action will reassure both consumers and industries harnessing communications technology that the networks they rely upon are built with equipment from trusted suppliers.  

“As 5G deployments accelerate, this EO will also help provide certainty for service providers and other communications equipment vendors as purchasing decisions are being made. TIA and our members look forward to working closely with the Administration as this EO is implemented in the months ahead, and to meeting the needs of customers who may be directly impacted. 

“In addition to addressing specific suppliers, we remain committed to ensuring that all information and communications technology (ICT) equipment manufacturers benefit from secure supply chains." 

“We appreciate the Administration’s concerns and the process created through today’s executive order," said Competitive Carriers Association President Steven K. Berry. "CCA members care deeply about national security and the millions of consumers they serve in rural America.  

"We look forward to continued dialogue and work with the national security agencies, Congress, the FCC and the Administration to help secure our nation's telecommunications networks as we move into the 5G technology world.” 

“Action is required against any country, organization or individual that exploits the technology supply chain to compromise our global internet and communications infrastructure," said USTelecom SVP, cybersecurity, Robert Mayer. "This is a national security issue of the highest order. Now that the Executive Order has been issued, it is critical there continues to be effective coordination across all agencies of government and close partnerships with the private sector to combat this growing threat to consumers and communities.” 

The President has signed an executive order intended to keep threatening tech out of U.S. telecom systems. 

With the race to 5G, cybersecurity of the supply chain has become top of mind in D.C., particularly when it comes to Chinese telecoms with big shares of the market but identified as potential security threats. 

Related: Pompeo Tells Britain Huawei Threatens U.S. Security 

The President also sent a letter to Congress that he was declaring a national emergency "to deal with the threat posed by the unrestricted acquisition or use in the United States of information and communications technology or services designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of foreign adversaries."

The Commerce Department will take 150 days to write rules on reviewing any transaction pending or completed by the order date involving information or communications technology crucial to critical infrastructure and subject to control by a "foreign adversary" and thus posing a national security threat.

Commerce does not anticipate putting out guidance in advance of the rules, according to White House officials speaking on background, so identifying the suspect deals will be an "iterative process."  

That process would appear especially targeted to Chinese telecoms Huawei, ZTE and others, which have already been the targets of Hill and FCC actions and proposed actions, but those officials called the order both company and country agnostic. 

The order is designed to equip the government to protect its critical infrastructure from foreign threats, they said. 

Commerce will issue interim regulations, but will also solicit industry comment on final rules implementing the order. 

The Secretary of Commerce will have the ability to prohibit transactions covered under the order, a call he will make in consultation with "the Secretary of the Treasury, the Secretary of State, the Secretary of Defense, the Attorney General, the Secretary of Homeland Security, the United States Trade Representative, the Director of National Intelligence, the Administrator of General Services, the Chairman of the FCC." 

FCC Chairman Ajit Pai praised the move.  

“When it comes to our national security, we cannot afford to make risky choices and just hope for the best. We must have a clear-eyed view of the threats that we face and be prepared to do what is necessary to counter those threats. Today’s Executive Order does just that," he said. “Protecting America’s communications networks is vital to our national, economic, and personal security. I therefore applaud the President for issuing this Executive Order to safeguard the communications supply chain. Given the threats presented by certain foreign companies’ equipment and services, this is a significant step toward securing America’s networks." 

 The FCC last week denied a petition by China Mobile to interconnect with U.S. nets citing the Trump Administration's advice to do so, and is considering its own proposal to bar threatening tech suppliers from broadband subsidy-funded network buildouts. 

“President Trump’s decision sends a clear message that the U.S. will do what it takes to secure our communications networks," said FCC Commissioner Brendan Carr. "The Executive Order will help ensure that our foreign adversaries do not compromise the security of our networks or undermine our core values, including our freedom from unlawful surveillance and respect for intellectual property. I look forward to continuing to work with all stakeholders to protect the security of our networks.”

“This is a needed step, and reflects the reality that Huawei and ZTE represent a threat to the security of U.S. and allied communications networks," said former telecom exec and current vice chairman of the Senate Intelligence Committee Mark Warner (Va.). "Under current Chinese security laws, these and other companies based in China are required to provide assistance to the Chinese state. This executive order places a great deal of authority in the Department of Commerce, which must ensure that it is implemented in a fair and responsible fashion as to not harm or stifle legitimate business activities. It should also be noted that we have yet to see a compelling strategy from this Administration on 5G, including how the Administration intends to work cooperatively with our allies and like-minded nations to ensure that international standards set for 5G reflect Western values and standards for security and privacy. Nor do we have a stated plan for replacing this equipment from existing commercial networks – a potentially multi-billion dollar effort that, if done ineptly, could have a major impact on broadband access in rural areas. A coherent coordinated and global approach is critically needed as nations and telecom providers move to implement 5G.”

The full executive order is reprinted below:            I, DONALD J. TRUMP, President of the United States of America, find that foreign adversaries are increasingly creating and exploiting vulnerabilities in information and communications technology and services, which store and communicate vast amounts of sensitive information, facilitate the digital economy, and support critical infrastructure and vital emergency services, in order to commit malicious cyber-enabled actions, including economic and industrial espionage against the United States and its people. I further find that the unrestricted acquisition or use in the United States of information and communications technology or services designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of foreign adversaries augments the ability of foreign adversaries to create and exploit vulnerabilities in information and communications technology or services, with potentially catastrophic effects, and thereby constitutes an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States. This threat exists both in the case of individual acquisitions or uses of such technology or services, and when acquisitions or uses of such technologies are considered as a class. Although maintaining an open investment climate in information and communications technology, and in the United States economy more generally, is important for the overall growth and prosperity of the United States, such openness must be balanced by the need to protect our country against critical national security threats. To deal with this threat, additional steps are required to protect the security, integrity, and reliability of information and communications technology and services provided and used in the United States. In light of these findings, I hereby declare a national emergency with respect to this threat.

The full executive order is reprinted below:

I, DONALD J. TRUMP, President of the United States of America, find that foreign adversaries are increasingly creating and exploiting vulnerabilities in information and communications technology and services, which store and communicate vast amounts of sensitive information, facilitate the digital economy, and support critical infrastructure and vital emergency services, in order to commit malicious cyber-enabled actions, including economic and industrial espionage against the United States and its people. I further find that the unrestricted acquisition or use in the United States of information and communications technology or services designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of foreign adversaries augments the ability of foreign adversaries to create and exploit vulnerabilities in information and communications technology or services, with potentially catastrophic effects, and thereby constitutes an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States. This threat exists both in the case of individual acquisitions or uses of such technology or services, and when acquisitions or uses of such technologies are considered as a class. Although maintaining an open investment climate in information and communications technology, and in the United States economy more generally, is important for the overall growth and prosperity of the United States, such openness must be balanced by the need to protect our country against critical national security threats. To deal with this threat, additional steps are required to protect the security, integrity, and reliability of information and communications technology and services provided and used in the United States. In light of these findings, I hereby declare a national emergency with respect to this threat.

Accordingly, it is hereby ordered as follows:

Section 1. Implementation. (a) The following actions are prohibited: any acquisition, importation, transfer, installation, dealing in, or use of any information and communications technology or service (transaction) by any person, or with respect to any property, subject to the jurisdiction of the United States, where the transaction involves any property in which any foreign country or a national thereof has any interest (including through an interest in a contract for the provision of the technology or service), where the transaction was initiated, is pending, or will be completed after the date of this order, and where the Secretary of Commerce (Secretary), in consultation with the Secretary of the Treasury, the Secretary of State, the Secretary of Defense, the Attorney General, the Secretary of Homeland Security, the United States Trade Representative, the Director of National Intelligence, the Administrator of General Services, the Chairman of the Federal Communications Commission, and, as appropriate, the heads of other executive departments and agencies (agencies), has determined that:

         (i) the transaction involves information and communications technology or services designed, developed, manufactured, or supplied, by persons owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary; and

         (ii) the transaction:

     (A) poses an undue risk of sabotage to or subversion of the design, integrity, manufacturing, production, distribution, installation, operation, or maintenance of information and communications technology or services in the United States;

     (B) poses an undue risk of catastrophic effects on the security or resiliency of United States critical infrastructure or the digital economy of the United States; or

     (C) otherwise poses an unacceptable risk to the national security of the United States or the security and safety of United States persons.

     (b) The Secretary, in consultation with the heads of other agencies as appropriate, may at the Secretary's discretion design or negotiate measures to mitigate concerns identified under section 1(a) of this order. Such measures may serve as a precondition to the approval of a transaction or of a class of transactions that would otherwise be prohibited pursuant to this order.

     (c) The prohibitions in subsection (a) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the effective date of this order.

     Sec. 2. Authorities. (a) The Secretary, in consultation with, or upon referral of a particular transaction from, the heads of other agencies as appropriate, is hereby authorized to take such actions, including directing the timing and manner of the cessation of transactions prohibited pursuant to section 1 of this order, adopting appropriate rules and regulations, and employing all other powers granted to the President by IEEPA, as may be necessary to implement this order. All agencies of the United States Government are directed to take all appropriate measures within their authority to carry out the provisions of this order.

     (b) Rules and regulations issued pursuant to this order may, among other things, determine that particular countries or persons are foreign adversaries for the purposes of this order; identify persons owned by, controlled by, or subject to the jurisdiction or direction of foreign adversaries for the purposes of this order; identify particular technologies or countries with respect to which transactions involving information and communications technology or services warrant particular scrutiny under the provisions of this order; establish procedures to license transactions otherwise prohibited pursuant to this order; establish criteria, consistent with section 1 of this order, by which particular technologies or particular participants in the market for information and communications technology or services may be recognized as categorically included in or as categorically excluded from the prohibitions established by this order; and identify a mechanism and relevant factors for the negotiation of agreements to mitigate concerns raised in connection with subsection 1(a) of this order. Within 150 days of the date of this order, the Secretary, in consultation with the Secretary of the Treasury, Secretary of State, the Secretary of Defense, the Attorney General, the Secretary of Homeland Security, the United States Trade Representative, the Director of National Intelligence, the Administrator of General Services, the Chairman of the Federal Communications Commission and, as appropriate, the heads of other agencies, shall publish rules or regulations implementing the authorities delegated to the Secretary by this order.

     (c) The Secretary may, consistent with applicable law, redelegate any of the authorities conferred on the Secretary pursuant to this section within the Department of Commerce.

     Sec. 3. Definitions. For purposes of this order:

     (a)the term "entity" means a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization;

     (b)the term "foreign adversary" means any foreign government or foreign non-government person engaged in a long‑term pattern or serious instances of conduct significantly adverse to the national security of the United States or security and safety of United States persons;

     (c)the term "information and communications technology or services" means any hardware, software, or other product or service primarily intended to fulfill or enable the function of information or data processing, storage, retrieval, or communication by electronic means, including transmission, storage, and display;

     (d)the term "person" means an individual or entity; and

     (e)the term "United States person" means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States.

     Sec. 4. Recurring and Final Reports to the Congress. The Secretary, in consultation with the Secretary of State, is hereby authorized to submit recurring and final reports to the Congress on the national emergency declared in this order, consistent with section 401(c) of the NEA (50 U.S.C. 1641(c)) and section 204(c) of IEEPA (50 U.S.C. 1703(c)).

     Sec. 5. Assessments and Reports. (a) The Director of National Intelligence shall continue to assess threats to the United States and its people from information and communications technology or services designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary. The Director of National Intelligence shall produce periodic written assessments of these threats in consultation with the heads of relevant agencies, and shall provide these assessments to the President, the Secretary for the Secretary's use in connection with his responsibilities pursuant to this order, and the heads of other agencies as appropriate. An initial assessment shall be completed within 40 days of the date of this order, and further assessments shall be completed at least annually, and shall include analysis of:

          (i) threats enabled by information and communications technologies or services designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary; and

          (ii) threats to the United States Government, United States critical infrastructure, and United States entities from information and communications technologies or services designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the influence of a foreign adversary.

     (b)The Secretary of Homeland Security shall continue to assess and identify entities, hardware, software, and services that present vulnerabilities in the United States and that pose the greatest potential consequences to the national security of the United States.The Secretary of Homeland Security, in coordination with sector-specific agencies and coordinating councils as appropriate, shall produce a written assessment within 80 days of the date of this order, and annually thereafter.This assessment shall include an evaluation of hardware, software, or services that are relied upon by multiple information and communications technology or service providers, including the communication services relied upon by critical infrastructure entities identified pursuant to section 9 of Executive Order 13636 of February 12, 2013 (Improving Critical Infrastructure Cybersecurity).

     (c) Within 1 year of the date of this order, and annually thereafter, the Secretary, in consultation as appropriate with the Secretary of the Treasury, the Secretary of Homeland Security, Secretary of State, the Secretary of Defense, the Attorney General, the United States Trade Representative, the Director of National Intelligence, and the Chairman of the Federal Communications Commission, shall assess and report to the President whether the actions taken by the Secretary pursuant to this order are sufficient and continue to be necessary to mitigate the risks identified in, and pursuant to, this order.

     Sec. 6. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:

          (i) the authority granted by law to an executive department or agency, or the head thereof; or

          (ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

     (b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

     (c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

Secretary of State Mike Pompeo said that if Britain makes a deal to use Huawei tech in their telecom systems, the U.S. may not be able to share intelligence information with its historic partner.

That came in an interview with Sky News and in comments elsewhere on the Secretary's trip to London, where he said China was trying to divide the Western Alliance through bits and bytes rather than bullets and bombs.

The FCC is currently proposing to deny broadband subsidy funding to Chinese telecoms, and is voting Thursday (May 8) on a proposal to deny China Mobile's long-standing petition to interconnect with U.S. networks. FCC chair Ajit Pai said this week that Huawei is definitely a national security threat.

Reltaed: Huawei Indicted for Theft, Fraud and More

Pompeo told Sky that, when it comes to Huawei and ZTE, another suspect Chinese telecom, "We don’t believe you can have those technology in your systems and still have a trusted network."

Related: ZTE, Huawei Excluded from Government Contracts

He said the U.S. has been crystal clear on that point, although the President did signal a less than get-tough policy on ZTE, at least when it came to U.S. tech.

The Commerce Department struck a deal with ZTE lifting the ban on U.S. tech imports to the company. The ban was issued after ZTE was found not to have complied with a U.S. sanction agreement after it was discovered that the company was supplying technology to Iran and North Korea. The President had signaled the likelihood that Commerce would help ZTE after the Chinese government approached him about the impact on Chinese jobs of Commerce's ban.

But while the U.S. might be providing tech to the company, Pompeo told Sky: "We don’t believe you can have those technologies in your systems and still have a trusted network. We’re happy to continue to look at technology and see ways we might achieve that, but the United States for its part will only participate in trusted networks. We will only share America’s information with those networks that we are confident aren’t under the control of China or China’s government. And so there’s real risk, if countries choose that path, that we won’t be able to participate in those networks."

Asked if that could threaten the U.S.'s security relationship with Britain, he said both that he was confident they would find a way to remain partners, but also said "we certainly will never put America’s national security sequence in a network that we don’t have confidence in," suggesting "the way" would be for Britain not to use Huawei technology.

Pompeo, in a press availability earlier in the day, said that he was confident the U.K., "more broadly," would "never take an action that will break the special relationship." But he clearly spelled out what such an action might be.

"As a matter of Chinese law, the Chinese Government can rightfully demand access to data flowing through Huawei and ZTE systems," he said. "Why would anyone grant such power to a regime that has already grossly violated cyberspace? What can her majesty’s government do to make sure sensitive technologies don’t become open doors for Beijing’s spymasters?

"Insufficient security will impede the United States ability to share certain information with trusted networks," he said.

"This is exactly what China wants; they want to divide Western alliances through bits and bytes, not bullets and bombs," Pompeo warned. "We know that 5G is a sovereign decision – we respect every nation’s right to make its own choices – but it must be made in the broader context, the broader strategic context of China’s efforts throughout the world."

FCC chair Ajit Pai is recommending that the FCC deny an application by state-owned China Mobile to interconnect with U.S. phone networks, reflecting supply chain concerns the FCC also has with Chinese telecoms ZTE and Huawei.

In related news, a senior FCC official said that the FCC is awaiting input from the executive branch before acting on its broadband buildout subsidy supply chain item targeting telecoms it concludes are security risks, likely including ZTE and Huawei.

The China Mobile application resolution is coming in an order being circulated for a vote at the May 9 open meeting. The order finds the application would not be in the public interest because the company, which is "indirectly and ultimately owned and controlled by the Chinese government" is "vulnerable to exploitation, influence, and control" by that government.

“Safeguarding our communications networks is critical to our national security," said Ajit Pai. "After reviewing the evidence in this proceeding, including the input provided by other federal agencies, it is clear that China Mobile’s application to provide telecommunications services in our country raises substantial and serious national security and law enforcement risks. Therefore, I do not believe that approving it would be in the public interest. I hope that my colleagues will join me in voting to reject China Mobile’s application.”

The application was filed in 2011, but when a foreign entity seeks such Sec. 214 connection authorizations to provide wired telecom service or resale, the FCC seeks input from executive branch agencies. In this case that took seven years, after which the National Telecommunications & Information Administration--the White House's principal telecom provider--recommended the application be denied. Pai agreed, and is circulating an order to the other commissioners to be voted on at the May 9 meeting.

China Mobile did submit a proposal for mitigating the executive branch's concerns, but those agencies did not feel there was a sufficient level of trust that China Mobile would comply given its close relationship with the Chinese government. The FCC echoed that finding, according to an FCC official speaking on background.

The official said that the FCC is usually receptive to foreign ownership, citing T-Mobile and Sprint, but that there were issues here that could not be mitigated.

He suggested the same concerns about protecting the national security of the United States have been driving the FCC's proceeding on whether broadband subsidy funds should be denied to any applicant using equipment from ZTE and Huawei.

The official said the FCC was concerned that there were no meaningful checks and balances on the Chinese government to compel companies to cooperate with intelligence agencies, which applies to both the interconnection and supply chain issues and companies.

Pai two weeks ago said the FCC is quickly trying to wrap up an item banning suspect tech from using government subsidy money for broadband buildouts, but the timing appears not to be entirely in the FCC's control.

Related: Huawei Says FCC Can't Block USF Funding

But asked what the status of that proceeding was he said that how to identify just which companies would be affected remained an open question and that the FCC was still waiting on guidance from the executive branch on how to define those companies before it proceeded.

FCC Chairman Ajit Pai says the FCC is quickly trying to wrap up an item banning suspect tech from using government subsidy money for broadband buildouts.

It would apply to any technology considered a cybersecurity risk, but was prompted by concerns over Chinese telecoms Huawai and ZTE. That technology includes everything from phones, tablets and smart watches to mobile hot spots, broadband routers, switchers and servers.

Related: Huawei Says FCC Can't Block USF Funding

Pai was asked about the status of the item at a House Appropriations Financial Services and General Government Subcommittee hearing on the FCC's budget this week.

It has been a year this month since the FCC opened a proceeding on potentially barring Universal Service Fund (USF) subsidy money from being used to buy equipment or services from a company posing a national security threat to a U.S. communications network or supply chain. USF is the government subsidy program for advanced telecommunications to areas that are difficult to reach, either because of geography or economics.

U.S. intelligence agencies have collectively told Congress they are concerned about Chinese tech in U.S. systems due to the companies alleged cozy relationship with the Chinese government, which is the U.S.'s chief competitor in the race to 5G. Huawei president Ren Zhengfei has said his company does not spy or provide technological back doors to its products.

Rep. Mike Quigley (D-Ill.) said it was important to win the race to 5G, but to win it the right way. He said that Chinese telecom equipment issues were troubling and he was concerned about a 5G net being "weaponized and used against the American people."\

He asked Pai to explain the status of the item.

He said the FCC has developed a record--from public and stakeholder comment--is working with the National Telecommunications & Information Administration, the White House's chief telecom policy adviser, to finalize the proposal in terms of the agencies who will be determining who and what the threats are. "We hope to move forward quickly," he said, adding that he shared the priority the Congress attached on getting it done.

Related: Huawei Pushes Back Hard at FCC

The FCC proposed applying the prohibition only to future equipment purchases and not requiring carriers to remove equipment from companies identified as a threat, though it asked about such retroactive removal.

According to senior FCC officials speaking on background, the proposal stemmed, in part, from a Dec. 20, 2017, letter from Congress expressing concerns about Chinese companies Huawei and ZTE, plus a follow-up intelligence briefing, both of which were described as impetuses to the effort to monitor the supply chain.

Huawei and ZTE have long been the objects of intense scrutiny in Washington over their alleged ties to the Chinese government. That has manifested itself in a congressionally-imposed ban on their tech in government contracts and more.

The various FCC commissioners have a number of issues with the potential ban, including whether it would disproportionately hurt smaller providers, how a company would be identified as a threat, what tech would be affected, and striking the right balance between protecting security and not making it harder to deploy plant.

In related news, Sen. Marco Rubio (R-Fla.), one of the leading voices for keeping suspect tech out of U.S. nets, praised a report that MIT was cutting off funding and R&D lined to Huawei and ZTE.

“MIT is right to terminate its funding and research links with Chinese state-directed actors Huawei and ZTE,” he said. “China, Chinese state-directed telecommunications, and other state-directed enterprises pose a significant, long-term threat to U.S. economic and national security, and American universities would be wise to wake up to that fact.”

Huawei continues to try to head off the momentum for banishing its tech product from U.S. 5G networks.

In a filing at the FCC, the Chinese tech company said the government's "overriding" telecom policy goal should be to get mobile broadband to as many consumers as possible as quickly as possible in the race to 5G, whose benefits will accrue "regardless of who manufactures the network equipment."

U.S. intelligence agencies have collectively told Congress they are concerned about Chinese tech in U.S. systems due to the companies alleged cozy relationship with the Chinese government, which is the U.S.'s chief competitor in the race to 5G. Huawei president Ren Zhengfei said his company does not spy or provide technological back doors to its products.

Congress responded by adding a phase-out of Huawei tech in government contracts to the Defense Authorization Act.

But Huawei earlier this month challenged that restriction in a Texas district court (Huawei Technologies USA is based in Texas).

Separately the FCC is considering its own limitations on Huawei, potentially denying networks with Huawei tech access to broadband subsidy money, which has prompted the Huawei pushback.

"Huawei is ready to help build real 5G network in the U.S., through real competition," the company told the FCC. "As it has stated in previous comments in this docket, Huawei recognizes that supply chain security in the face of a wide range of potential threats is and should be a high priority throughout the U.S. Government. But, as Huawei has also demonstrated in its comments, all equipment used by U.S. telecommunications carriers is potentially vulnerable to threats from multiple vectors. To be perfectly clear, Huawei is not claiming that its equipment is immune to potential vulnerabilities. But there is not, and never has been, any evidence that Huawei has engaged in or abetted any deliberate weakening of security or any effort at eavesdropping or penetration of U.S. (or any other) networks."

Related: T-Mobile's Legere: No Huawei Tech Going in 5G Net, Period

As for the FCC effort to limit its tech, the company was talking tough:

"While Huawei has been working with other governments in deploying most advanced and increasingly secure networks, the FCC has yet to take any useful action. A policy that seeks to exclude particular equipment from the market based on the identity of its manufacturer is both futile, because even the most “trusted” manufacturer may have vulnerabilities, and counterproductive, because it could prevent Americans from receiving the widely-anticipated benefits of 5G deployment," it said.  

FCC chair Ajit Pai back in March 2018 proposed to ban the use of money from the FCC's Universal Service Fund for equipment or services from "companies that pose a national security threat to United States communications networks or the communications supply chain."

The FCC proposal in part stemmed from a Dec. 20 letter from Congress expressing concerns about Chinese companies Huawei and ZTE, plus a follow-up intelligence briefing, both of which were described as impetuses to the effort to monitor the supply chain, senior FCC officials speaking on background said.

The technology includes everything from phones, tablets and smart watches to mobile hot spots, broadband routers, switchers and servers.

Sen. Ed Markey (D-Mass.), ranking member of the Senate Foreign Relations Committee's Security subcommittee, was asked in an interview for C-SPAN's Communicators series last week whether he would use a Huawei phone. He said he would be hesitant to use a Huawei manufactured device. He said there was clearly a "close working relationship" between Chinese private sector companies and the Chinese government and army. 

The Senate Commerce Committee drilled down on the 5G rollout Wednesday (Feb. 6) in a hearing aptly titled "Winning the Race to 5G and the Next Era of Technology Innovation in the United States." It was the first hearing of the committee in the new Congress and in a 5g, IoT-driven world, the shadow of Chinese tech in U.S. telecom loomed large over the proceedings.

In his opening statement, committee Chairman Roger Wicker (R-Miss.) talked mostly about the promise of 5G across multiple sectors and the need to win the race to 5G, sounding much like President Trump, but others weighed immediately into the issue of security and Chinese telecoms.

Related: Bill Introduced to Ban ZTE, Huawei Tech

Ranking member Sen. Maria Cantwell (D-Wash.) said she wished she had heard more from the President on cybersecurity at the State of the Union, but regardless Congress needs to make sure the 5G network is safe and that the promise of 5G does not come at the expense of national security and a secure supply chain,

"We can't tolerate a leaky valve or a back door into these networks," she said, adding that Congress needs to determine what, if any, level of foreign components can be allowed into that network.

Cantwell also said there needs to be as much enthusiasm about bringing rural and tribal areas into the broadband fold as there is about rolling out 5G. Sen. Wicker said there was much bipartisan consensus around the issue.

The presence of Chinese telecom components in U.S. networks has been a hot-button issue, specifically regarding Huawai and ZTE.

Wednesday's hearing was no exception.

Michael Wessel, commissioner of the U.S.-China Economic & Security Review Commission, told the senators that many other countries have embraced the security concerns of the U.S. about ZTE and Huawei. He said if Chinese companies provide equipment and software, it is a problem. He said access to telecom systems and connectivity are potentially unacceptable vulnerabilities.

"In my view it is better to err on the side of safety, as 5G will be the backbone of communications in the future," said Wessell. "We cannot afford to ignore the actions and activities that China has engaged in with regard to predatory and protectionist policies, what their public pronouncements have identified are their plans and what actions they have engaged in in the cyber realm."

Cantwell was concerned about Chinese telecoms participation in network tech standard setting. She said it needed to be made clear to the International Telecommunications Union that state actors should not be sitting on standards boards.

Wicker did press Wessell on whether the horse was already out of the barn with regard to Huawei and ZTE IoT devices.

Wessell said Huawei has about 9% of essential patents, but that the horse was still partway in the barn and there were risk mitigation strategies that could still be helpful.

Wicker asked if he thought the "proper authorities" were "on this issue."

Wessell said it is such a broad and deep problem that much more needs to be done. Wicker said he hoped so.

Sen. Brain Schatz (D-Hawaii) asked about the cybersecurity concerns about the supply chain and Huawei or "any other company."

Wessell said the cyber risks are paramount. He said Huawei saying they will protect data in a foreign market isn't accurate since they must comply with what the Chinese government tells them to do.

Schatz said as regards the competitiveness issue, we can live with someone else having a share of the market, but as a security issue, a company that is a security risk with 7% of the market has to be brought down to zero percent.

Sen. Wicker said there is a reason China is giving away technology at a cut-rate price. Sen. Marsha Blackburn (R-Tenn.) agreed, saying they want "our data" and saying ZTE is "well known" for imbedding spyware.

Blackburn said there needs to be better information sharing between industry and government about the threat.

Sen. Tom Udall (D-N.M.) asked why, given the threat of Chinese tech, Competitive Carriers Association President Steve Berry's members still used that tech in their systems.

Berry said it was a tough issue, but that most didn't have that tech, but that most that did were in small rural areas trying to build out nets on a shoestring. He said the good thing is that moving to the 5G net is an opportunity to better secure

networks and "cycle" some of those small carriers into a more "acceptable position" in terms of security.

The hearing featured a host of other issues, from access to spectrum, low, mid and high-band, C-Band, L-Band and 3.5--to the FCC's ability, or inability, to accurately determine where broadband has and hasn't been built out, part of the larger issue of getting broadband to rural areas using both licensed and unlicensed spectrum.

Blackburn made a pitch for the National Telecommunications & Information Administration, which is taking over the broadband mapping function.

On the issue of broadband subsidies, Sen. Brain Schatz (D-Hawaii), said the FCC is "chicken" to do Universal Service Fund contribution reform, which is why the government doesn't have more money to put into building out broadband.

Berry said he could not agree more. He signaled broadband providers, not just phone service providers, should be contributing to the Universal Service Fund, particularly since the fund is migrating to subsidizing broadband as the new advanced communications baseline.

Sen. Ed Markey (D-Mass.) put in a plug for coming up with estimates of the value of spectrum to society--one of Markey's complaints has been that in scoring legislation, the value of unlicensed spectrum, for example, is not sufficiently recognized--and for incentivizing government spectrum users to give up some of their turf.

Sen. Markey cited IoT cybersecurity standards from the Consumer Technology Association, but said that given that Americans were were reeling from the dark side of the internet revolution, consumers should have access to that information as well.

He said ZTE and Huawei can't be allowed to sell their tech to national security agencies. Markey and others in a letter have called on the Administration to investigate Chinese efforts to secretly manipulate technology. Sen. Wicker said he would insert that letter into the record.

Sen. Dan Sullivan (R-Alaska) put in a plug for protecting C-band incumbents--which includes cable and broadcast network distribution--but witness Brad Gillen of CTIA pointed out that China has 500 Mhz of C-band and the U.S. needs to get access to more. Berry said he also wanted to see more C-band spectrum made available and that it could be done without hurting incumbents. He said whether it should be made available through a government auction or "private" auction is a novel question.

Sullivan asked why not have a government auction, so the proceeds could go toward, say, rural broadband, rather than let private companies keep all the money.

A bipartisan group of senators has reintroduced a bill, the ZTE Enforcement Review and Oversight (ZERO) Act, that would put congressional muscle behind the conditions on the deal struck by the Trump Administration with Chinese Telecom ZTE that lifted a ban on U.S. exports to the company.

The conditions for lifting the ban included "high level security guarantees, change of management and board, an actual requirement to purchase U.S. parts, and a $1.3 billion fine."

The Commerce Department had instituted the ban citing ZTE noncompliance with an earlier agreement, but after talking with China's president and apparently being concerned about the ban's impact on Chinese jobs, President Trump directed Commerce to find a way to lift the ban, which they did subject to payments and guarantees from ZTE. 

But many members of Congress were concerned about lifting the ban given the agreement by U.S. intelligence officials that ZTE was a security threat due to its ties to the Chinese government. The result was the ZTE Enforcement Review and Oversight (ZERO) Act, which was introduced in the last Congress and is now making a comeback.

The legislators say the bill is meant to ensure that if Commerce can't "regularly certify ZTE’s full compliance with the deal and with relevant U.S. export controls and sanctions laws," the ban's "crippling punishments" will be reimposed. 

Among those leading the effort to keep ZTE in check has been Sen. Marco Rubio (R-Fla.). "China’s communist government continues to threaten our national security interests through state-directed actors and, while it was a mistake to strike a ‘deal’ with ZTE in the first place, this bill would ensure ZTE is held accountable if and when it cheats again," Rubio said.

A separate bill has been introduced that would reimpose that ban.

Joining Rubio in reintroducing the bill were Sens. Chris Van Hollen (D-Md.) (he backs the bill reimposing the ban, so he is hedging his bet), Susan Collins (R-Me.), Mark Warner (D-Va.), Jerry Moran (R-Kan.), Elizabeth Warren (D-Mass.), and Doug Jones (D-Ala.).

Chinese telecoms competed with Facebook Tuesday for companies most likely to succeed in ticking off Washington policymakers and interest groups.

While Facebook was getting hammered on how it used and monetized info and its online community, Huawei and ZTE were in crosshairs in the wake of the Justice Department's multiple-count criminal indictment of Huawei for theft of trade secrets and more, which came the day before a Senate Intelligence Committee hearing on "Worldwide Threats," which witnesses and legislators said included Chinese telecoms, or at least their technology employed in U.S. networks.

At that hearing, committee vice chair Mark Warner (D-Va.), said he was concerned about "the efforts of big Chinese tech companies – which are beholden to the CCP – to acquire sensitive technology, replicate it, and undermine the market share of U.S. firms with the help of the Chinese state."

The panel heard from the heads of all the intelligence agencies, and to a man and woman, they shared those concerns.

Related: Bill Introduced to Ban U.S. Tech to ZTE, Huwaei

FBI director Christopher Ray said the line between the Chinese government and ostensibly private companies has been blurred and the U.S. was waking up to that consensus opinion. He also said that Huawei and others "“pose a dual threat to both our economic and national security, and the magnitude of these charges make clear just how seriously the FBI takes this threat," according to Protect America's Wireless.

Defense Intelligence Agency director general Robert Ashley said that exercising due diligence over the U.S. supply chain was critical.

Elsewhere on the Senate hearing calendar Tuesday (Jan. 29), Sen. Roger Wicker (R-Miss.), a senior member of the Armed Services Committee as well as new chair of the Senate Commerce Committee, asked a panel of national security experts about the threat of Chinese technology dominance, citing former House Intelligence Committee Chairman Mike Rogers' op ed that Huawei and ZTE were effectively an extension of the Chinese intelligence network."

Ely Ratner, former deputy national security adviser to the Vice President said that the supply chain threat posed by those companies is "absolutely real," according to Widker's office. He said that Huawei was "subject to new Chinese laws that give the state the right to use companies’ data and networks as they wish."

Also in the wake of the DOJ's indictments against Huwaei, the office of Sen. Marco Rubio (R-Fla.) said he has picked up four more co-sponsors for legislation to combat tech threats from China.

The bill "creates an Office of Critical Technologies & Security at the White House responsible for coordinating across agencies and developing a long-term, whole-of-government strategy to protect against state-sponsored technology theft and risks to critical supply chains." 

The new sponsors are Sens. Michael Bennet (D-Colo.), Roy Blunt (R-Mo.), Chris Coons (D-Del.) and Susan Collins (R-Me.).

“The United States needs a more coordinated approach to directly counter this critical threat and ensure we better protect U.S. technology, and this important, bipartisan legislation will streamline efforts across the government," said Rubio. "I look forward to working with my colleagues and the Administration to enact this legislation and guard against these national security threats.”

The arrest by the Canadian government of Chinese tech company Huawei's CFO Meng Wanzhou has put a new spotlight on that company and the U.S. government's national security issues with having such technology be part of critical communications networks.

“There is ample evidence to suggest that no major Chinese company is independent of the Chinese government and Communist Party – and Huawei, which China’s government and military tout as a ‘national champion,’ is no exception," said Sen. Mark Warner (D-Va.) in a statement on the arrest. "It has been clear for some time that Huawei, like ZTE, poses a threat to our national security. Now we know that Huawei, like ZTE, has violated U.S. sanctions law. It's my hope that the Trump Administration will hold Huawei fully accountable for breaking sanctions law, as it failed to do in the case of ZTE."

Warner is vice chair of the Senate Intelligence Committee.

Huawei’s Latest Setback: Banned From BT’s 5G Wireless Network

The Trump Administration rescinded a ban on U.S. tech supplies to ZTE after the President met with his Chinese counterpart.

"I continue to strongly urge our close ally Canada to reconsider Huawei’s inclusion in any aspect of its 5G infrastructure," said Warner.

Back in October, Warner teamed with Sen. Marco Rubio (R-Fla.) another strong critic of Huawei and ZTE, on a letter to Canadian Prime Minister Justin Trudeau urging that exclusion.

He also pushed for a law setting in stone the conditions Huawei agreed to in order to secure the Trump administrations removal of the U.S. export ban.

“Yesterday’s arrest of Meng Wanzhou underscores a troubling trend of Chinese companies and state actors flouting the rule of law and stealing from U.S. companies," said Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa). "Ms. Wanzhou’s arrest comes on the heels of the October arrest of Yanjun Xu, an operative for the Chinese Ministry of State who allegedly targeted GE Aviation and other companies to recruit their employees in order to steal trade secrets. Two Chinese intelligence officers and a team of hackers were also charged in October in a separate case involving theft of commercial aviation technology. In November, the Justice Department announced charges against a Chinese state-owned enterprise for stealing trade secrets of an American semiconductor company."

Citing a U.S. Trade Representative report on Chinese hacking into commercial communications networks, Attorney General Jeff Sessions has announced a new initiative to combat that country's theft of intellectual property, including a review of foreign investments in U.S. telecommunications.

Sessions said the department will recommend legislation if necessary to combat state-sponsored espionage and theft.

Sessions said DOJ is creating a China Initiative, led by Assistant Attorney General John Demers, to "identify priority Chinese trade theft cases, ensure that we have enough resources dedicated to them, and make sure that we bring them to an appropriate conclusion quickly and effectively."

Sounding like Howard Beale in Network, Sessions said: "We are here today to say: enough is enough. We’re not going to take it anymore.

Among the initiatives tasks will be to look at "the Foreign Investment Review staff’s review of investments and licenses in U.S. infrastructure and telecommunications, and the Foreign Agent Registration Act Unit’s work to counter covert efforts to influence our leaders and the general public."

Related: Trump Administration Levying $200 Billion in Chinese Tariffs

Sessions also announced that an indictment has been returned by a San Francisco Grand Jury in a civil suit filed by the Department of Justice to prevent Chinese and Taiwanese companies from transferring technology it says was stolen from Micron, A San Francisco-based semiconductor maker worth $100 billion and in control of almost a quarter of the RAM (random access memory) market, which is central to computing.

The Grand Jury decision is not a conviction, but is a finding that there is enough evidence to proceed to a trial.

DOJ claimed that the former president of a company acquired by Micron in 2013, left that company in 2015 and took $8.75 billion in trade secrets with him to a Taiwanese company that is one of the defendants in the suit and which partnered with a Chinese State-owned company so it could steal the technology.

If convicted, the defendants could get up to 15 years in prison and the Chinese and Taiwanese companies involved up to $20 billion in penalties.

President Donald Trump is all about "fair dealing" the Administration has emphasized, but Sessions signaled that it will not allow "our sovereignty to be disrespected, our intellectual property to be stolen, or our people to be robbed of their hard-earned prosperity."

The Administration has arguably been sending something of a mixed message about China given that it worked out a deal to restore U.S. tech imports to Chinese telecom ZTE (lifting lifting a previous ban). ZTE had violated terms of an earlier agreement and been identified by major U.S. intelligence officials as a security threat. 

The Commerce Department had issued the ban after ZTE failed to keep its end of a settlement over supplying tech to Iran and North Korea, but after talking to the President of China, President Trump instructed Commerce to strike a deal to save Chinese jobs, which was subsequently struck.

The reaction of Mark Warner (D-Va.), vice chairman of the Senate Intelligence Committee and no fan of the ZTE deal, signaled the Administration initiative was good, as far as it went. "The Administration has powerful, targeted tools at its disposal to hold bad actors accountable for theft of U.S. companies’ IP and trade secrets, even when the theft takes place abroad," he said in a statement e-mailed to B&C/Multichannel News. "I applaud the Department of Justice for using one of those tools today to hold China accountable, and encourage the Administration to take additional steps to crack down on economic espionage by Chinese businesses and the Chinese government.”

A bipartisan bill has been introduced to make sure that Chinese telecom ZTE complies with all the conditions of the Trump Administration's deal to lift its previously imposed seven-year ban on export of U.S. components to the company.

ZTE tech includes everything from phones, tablets and smartwatches to mobile hot spots, broadband routers, switchers and servers. 

The ZTE Enforcement Review and Oversight (ZERO) Act would also mandate that "if the Commerce Secretary cannot regularly certify ZTE’s full compliance with the deal and with relevant U.S. export controls and sanctions laws, the denial order’s crippling punishments will be reinstated against ZTE."

The conditions for lifting the ban included what the President characterized as "high level security guarantees, change of management and board, an actual requirement to purchase U.S. parts, and a $1.3 billion fine."

Related: Senate Commerce Passes Ban on ZTE Funding

The initial ban was issued when ZTE was found not to have complied with a U.S. sanction agreement. 

Commerce Department officials had concluded ZTE violated the terms of its settlement agreement with the U.S. over illegally shipping telecom equipment to Iran and North Korea and declared that U.S. companies would be prohibited from exporting technology to ZTE. That move resulted in ZTE essentially shuttering and calling the U.S. move unfair.

Related: Pai Supports U.S. Ban on USF Funds to Chinese Tech Suppliers

The Chinese government then tried to get the President to help ZTE, saying it could cost Chinese Jobs. The President agreed to lift the ban, but said it was with strong conditions, which are the ones the senators want to make sure are complied with this time around. 

Spearheading the legislative effort are Sens. Marco Rubio (R-Fla.) and Chris Van Hollen (D-Md.), joined by Sens. Susan Collins (R-Me.), Mark Warner (D-Va.), James Lankford (R-Okla.) and Elizabeth Warren (D-Mass.).

Rubio was an early and frequent critic of the decision to lift the ban. “With China’s communist government posing the greatest, long-term threat to the United States, we must continue to confront ZTE’s real risks to our economy and national security,” he said. “While it was a mistake to reach a ‘deal’ with ZTE in the first place, this bill will ensure ZTE is finally put out of business if it does not hold up its end of the bargain.”

Sen. Warner was no fan either of what he called the Trump Administration's "cave" to China.

“ZTE has a history of violating U.S. sanctions and misleading the U.S. government," said Warner. "Unfortunately this Administration has shown that it cannot be trusted to defend American interests and punish companies like ZTE that pose a threat to our security. This bipartisan legislation would ensure that if ZTE once again violates trade restrictions or its agreement with the U.S. it will be held accountable in a significant, painful way." Warner is vice chair of the Senate Select Committee on Intelligence.