Huawei and ZTE have been branded as security threats that can’t be trusted by US Attorney William Barr.
In a letter to the Federal Communications Commission (FCC), Barr noted that Huawei has faced charges on breaching American sanctions on Iran, bank fraud and trade secret theft, while ZTE was also found to have illegally shipped US goods to North Korea and Iran.
He also intimated that perceived links to the Chinese government made the companies a threat to national security.
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ZTE was almost put out of business by a ban on dealing with US suppliers back in 2018, while American firms are currently prohibited from selling their wares to Huawei.
Chinese vendors have largely been excluded from the US market, with major carriers opting to use radio equipment from Ericsson, Nokia and others. However a number of smaller providers use kit from Huawei and ZTE because it is relatively expensive.
The Rural Wireless Association, which represents operators with fewer than 100,000 customers, estimates a quarter of its members have Chinese-made kit in their networks and estimates it could cost up to $1 billion to replace it.
The FCC will vote on a proposal next week that would see rural operators banned from using government funding to purchase equipment from Huawei or ZTE and given money to replace any kit that has already been deployed in their infrastructure.
Huawei has frequently denied any allegations that its products are a security risk, while Washington has produced no evidence of any wrongdoing. Meanwhile, US companies want to be able to do business with the Chinese firm, arguing that the sanctions have cut off a valuable source of revenue.
The American government said it plans to issue licences to firms who want to sell non-sensitive goods to Huawei but has yet to approve any applications.
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