Huawei to challenge FCC decision on government subsidy program
- by Emilio Sims
- in Money
- — Dec 1, 2019
The FCC labeled the company a "national security threat" on November 22 and banned it from a federal subsidy program that would have allowed U.S. businesses to receive subsidies for purchasing telecommunications equipment from Huawei, thus dealing a blow to U.S. Huawei sales. With many smaller operators already using Huawei's equipment, it's unlikely that they'll have the money to replace it.
However following the decision by Washington to ban American companies from dealing with Huawei on national security ground, authorities are reviewing the situation.
The Chinese telecom giant Huawei reportedly is planning to take legal action against the decision by a United States telecom regulator to shut it out of the American market.
The Universal Service Fund is used to subsidise telecommunication services and equipment mainly in rural areas of the United States, a market where Huawei gear has established a presence despite the growing USA pressure on the company. The Rural Wireless Association, a group of rural wireless businesses, then said the costs of making that change "are significant, across the board".
The statement also pointed out that "the FCC has singled out Huawei based on national security, but it provides no evidence that Huawei poses a security risk". This move from the US Commerce Department saw Huawei lose Google's Android OS support.
The Chinese giant Huawei plans to sue the US Federal Communication Commission (FCC) over recent restrictions on the company's equipment use in rural networks, part of a larger effort to push back against fears the company's devices offer backdoor access to Chinese intelligence, the Wall Street Journal reported on Friday.
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.
It is now thought that the US Commerce Department has received 300 applications, of which half have been processed.
