The US Government has approved new legislation aw banning telecom companies in the country from using federal funds to purchase equipment from Huawei and ZTE.
The new Secure and Trusted Communications Networks Act also comes with a $1 billion reimbursement program to support smaller companies who have had to remove prohibited equipment and replacing hardware sold by the Chinese tech companies.
A press release from the White House said: “This legislation will help protect our telecommunications infrastructure by prohibiting the use of federal funds to purchase equipment from companies that pose a national security threat."
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Huawei security threat
FCC chairman Ajit Pai said he has asked the Congress to “appropriate the necessary funding to reimburse carriers for replacing any network equipment or services found to be a national security threat.”
“Huawei and ZTE have been initially designated as threats to national security," Pai added.
"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."
The US Federal Communications Commission (FCC) has been collating data from the smaller telecom companies that have deployed and are using networking equipment from Huawei and ZTE over the past few months to try and examine the extent of the issue.
The Rural Wireless Association has also welcomed the decision, terming it a first step in replacing the Huawei and ZTE equipment from rural carriers and ensuring that networks remain available in those areas.
Chinese companies have faced increased scrutiny from the US for some time, with Huawei in particular having been accused of spying, racketeering and conspiracy to steal trade secrets. The company was blacklisted in May last year in light of national security and allegedly being closely connected to the Chinese Government.
Unsurprisingly, Huawei has opposed the move and has said that its equipment does not pose any threat whatsoever, with ZTE also denying the charges.
Huawei is already the filed a lawsuit against the FCC in December and claims that the FCC has not been able to produce any evidence to prove its allegations.
ZTE is also being investigated by the United States Justice Department for allegedly bribing foreign officials to boost its worldwide operations.
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