FCC 'stuns' RWA with immediate USF ban on Huawei

The Rural Wireless Association (RWA) said Tuesday that it was “stunned” by the FCC decision to immediately ban service providers from using Universal Service Fund (USF) dollars for Huawei telecom gear and wants enough time to submit waivers.

In a Public Notice (PDF), released yesterday, the FCC finalized its initial designation of Huawei and fellow Chinese vendor ZTE as national security threats. The formal designations, effective immediately, mean service providers can’t use USF support (which includes about $8.5 billion annually for broadband deployment, largely for rural providers) to purchase, maintain or support any services or equipment supplied by Huawei or ZTE.

“As a result, rural carriers who have deployed Huawei or ZTE equipment or services in their networks will now lack the ability to support their critical networks that are serving hundreds of thousands of rural Americans and those traveling through rural America,” RWA said in a statement.

RELATED: FCC bans use of USF funds for Huawei, ZTE equipment

“Given the difficultly in demonstrating where specifically their USF support is being utilized in their networks, this puts rural carriers in a precarious situation,” RWA continued, pointing out that the group is simultaneously working to give customers time to pay bills as requested by the FCC, adjust to changes from the T-Mobile/Sprint merger and keep rural Americans connected during the COVID-19 pandemic.

It appears service providers can request waivers from the ban, but RWA is still concerned with the timeframe.

“RWA members appreciate the opportunity to submit waivers of this prohibition but ask the Commission to give them sufficient time to submit such waivers before pulling away their USF support which is scheduled to start tomorrow, July 1,” RWA stated.

In November 2019, the FCC voted unanimously to ban USF recipients from using funds for telecom equipment from companies deemed national security risks, initially naming Huawei and ZTE as entities covered by the order.

RELATED: Huawei, ZTE fight against FCC national security threat classification

Regarding Tuesday’s decision, FCC Chairman Ajit Pai said its Public Safety and Homeland Security Bureau made the formal designation based “on the overwhelming weight of evidence.”

“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,” Pai said in a statement (PDF). “The Bureau also took into account the findings and actions of Congress, the Executive Branch, the intelligence community, our allies, and communications service providers in other countries. We cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our critical communications infrastructure.”

In response to Fierce, Huawei said its original statement on the designation – that the order is unlawful – is still valid.

“Huawei believes this order is unlawful as the FCC has singled out Huawei based on national security, but it provides no evidence that Huawei poses a security risk. Instead, the FCC simply assumes, based on a mistaken view of Chinese law, that Huawei might come under Chinese government control,” Huawei stated.  

RELATED: FCC’s Pai bullish on open RAN, virtualization

Huawei has been in the U.S. crosshairs on several fronts, including Washington’s campaign to keep the tech giant out of communications networks both at home and abroad. In March, the Trump administration signed bipartisan legislation to establish a $1 billion fund to help smaller telecom providers rip out and replace insecure network equipment from companies like Huawei and ZTE that are deemed a national security risk.

RWA and the Competitive Carriers Association (CCA), which counts regional and rural carriers as members, praised earlier Senate passage of the bill. CCA did not have a comment on the FCC’s formal designation of Huawei and ZTE.