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FCC Seeks Comment on Designation of Huawei as Covered Company

On November 26, 2019, the FCC released a Report and Order designating Chinese telecommunications manufacturers Huawei and ZTE as covered companies, or those who pose a risk to the national security of the United States. Following the Report and Order, U.S. operators were to remove and replace any existing equipment from these companies and were prohibited from purchasing, obtaining, maintaining, improving, modifying, or otherwise supporting any equipment or services from these companies. Huawei, claiming the FCC did not provide any evidence of its risk to the U.S., has challenged the FCC in court. The FCC is now seeking comment on whether Huawei should be designated as a covered company. Comments are due by February 3, 2020.

According to the FCC, Huawei poses a security risk to the U.S. because "Chinese intelligence agencies have opportunities to tamper with their products in both the design and manufacturing processes." Huawei also offers services managing telecommunications equipment, which the FCC believes could be a front used to give operators access to large amounts of U.S. user data for malicious purposes. Huawei argues that the U.S. is not subject to Chinese security laws, but the FCC has cited Huawei's obligation under Chinese law to "assist with Chinese intelligence-gathering" as evidence that Huawei is required to—and could—fulfill Chinese government objectives. Huawei denies all allegations and claims the FCC lacks the authority to prohibit the use or sale of its equipment.

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