The U.S. government has taken another step in its official shunning of Chinese telecoms Huawei and ZTE, with the House voting to exclude them and their technology from government contracts and systems, though the prohibition will take several years to effectuate.
The technology includes everything from phones, tablets and smart watches to mobile hot spots, broadband routers, switches and servers.
Existing components from the companies would not have to be removed, but when their natural lifecycle ends, they would have to be replaced with a comparable piece of equipment "manufactured by a person other than Huawei Technologies Company or ZTE Corporation (or any subsidiary, successor entity, or affiliate of such entities)."
The exclusion provision was part of the massive defense appropriations bill HR 5515, the National Defense Authorization Act for 2019, which passed overwhelmingly (351 to 66), but must still be reconciled with the Senate version, where Sen. Marco Rubio (R-Fla.) proposed the prohibition.
The bill said that given that Chinese telecoms are among companies that claim to be private but are subject to state influence, and given that the former head of the CIA had said Huawei had shared its "intimate and extensive knowledge" of foreign telecommunications systems with which it was involved with the Chinese government, and given that ZTE had pled guilty to illegally shipping U.S. origin items to Iran, and given that a bipartisan select committee in 2012 had recommended that U.S. government systems should not include ZTE or Huawei equipment, and given that the heads of the U.S. intelligence agencies recently told Congress they would not use products or services from either company, it was drawing a line in the digital sand, as it were.
Referring specifically to Huawei and ZTE, the bill said that, as of January 2021: "[T]he head of an agency may not procure or obtain, may not extend or renew a contract to procure or obtain, and may not enter into a contract (or extend or renew a contract) with an entity that uses any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system."
But in addition to the the two-and-a-half-year glide path, there is also an added two-year waiver for compelling reasons.
The Consumer Technology Association had no comment on the prohibition, with a spokesperson saying that the association was "neutral" on procurement issues.
ZTE and Huawei have been the subjects of numerous government actions of late, including an FCC proposal to prohibit broadband subsidy money to be used for its equipment, a prohibition on ZTE or Huawei devices from military bases, and then there was Commerce Department officials concluding ZTE violated the terms of its settlement agreement with the U.S. over illegally shipping telecom equipment to Iran and North Korea and declaring that U.S. companies would be prohibited from exporting technology to ZTE that was then being incorporated in their products for re-export to Iran and North Korea.
On the other side, President Trump tweeted that he had asked Commerce to help ZTE, pointing to potential job losses in China (from the fallout from Commerce's actions).
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