FCC may ban overseas telecom gear companies: High-risk vendor ZTE and Huawei cooldown
The Federal Communications Commission (FCC) pushed forward with new proposals to block “high-risk” vendors equipment in the US. The movement is gaining speed for the last few years with motives to block overseas companies providing telecom gears. According to FCC, anything that proves the risk to national security is not worth it.
According to FCC, Chinese telecom giant Huawei threatened US sanctions in Iran previously. The struggle is ongoing for quite some time between two tech-savvy countries. Q2, 2018 survey said that Huawei is the second-largest smartphone maker in the world followed by Samsung. It even beats Apple by a considerable number.
The companies tie deeply with the Chinese government. This means if the government asks for private information, the telecom makers are obligated to do so. It raises matters of concern for the privacy of many customers like the US. While the US would love to see other countries follow up with the idea, they are not pushing hard on it. Instead, they are blocking Huawei and ZTE specifically as they are the ones controlling most of the market share. Huawei denies allegations of backdooring the security threat by smartphones. Jessica Rosenworcel, FCC Commissioner pushed an anonymous claim in 2019 for banning funding on the telecom giants.
As security risks are viable here, the US Congress and FCC don’t want to proceed further alongside 5G deployment. Officials are hopeful the movement will make communications network free of backdoor leaking. Though it will take long steps to implement updates further, it’s a great time to start. 5G networking era is deemed to power not only global and domestic communications network but alongside smart vehicles and CCTV that monitors factories and organisations.
Secure Network Act’s reimbursement program will help to finalize designations on rural wireless communications. Global dependency on overseas networking equipment lies in the pricing. They provide cheap communication medium and devices to people’s hand. Replacing them will surely manifest a challenge without questions. Regardless dependency on security risked management is not worth it. FCC requested to revoke license and certifications following 2019’s Trusted Communications Network Act. Alongside ZTE and Huawei, Hytera is also on the lookout. The company provides radio systems. Those are used in the cellular and industrial divide. Also, Dahua and Hikvision who provides video surveillance equipment are on the lookout.
Most of the equipment gears are sourced in the US telecom market are from Ericsson and Nokia. Even Samsung provides an option to ease the demand. Nonetheless, replacing the cheapest option is surely going to move numbers in the market. Virtualizing communications network, especially radio access network will be depended on O-RAN. It will be the standardised procedure to move with the cause of a cleaner and reliable connection. The system tested successfully for the open-ecosystem approach and scaling towards sustaining a 5G network. The US has a global lead on software-based platforms and integrating it into the system with more dependency can raise broadband infrastructure by a good margin.
On the other hand, according to Section 230(c)(1) of the US Communications Decency Act, users have immunity to “interactive computer service” for websites and third-party content. And FCC is hopeful that Congress will have the motive to revisit the law. Jessica also said “it is not FCC’s job” to revise the law. Adjusting the law will give FCC the chance to rework and power towards the push in the sector. During the 2019 voting, the FCC ballot bans federal funds to buy Huawei, ZTE equipment. Later in a public press, the commission said they are not going to sit idly and hope for the best in the venture.
Huawei is fighting battles in the US courts to lift the bans and regulatory system changes. CTIA (The Cellular Telecommunications & Internet Association) listed an approx. of 30 companies in the US and Competitive Carriers Association (CCA) has 100 plus members. While a 5-6% profit comes from the US to Huawei, it still raises the question that if a leading country hands them a failed contract, others may follow and the European counties tend to stick with the same decisions. And overall, it doesn’t look good in the business world.
Q1 2019 reported, among $58.3B in revenue that Huawei gained, a small portion comes from the US. And yet as they don’t rely on US chips to fuel their products. Huawei has a band of lawyers that houses formal head of the legal office. So, they have the capability of making a strong case and thinks that the FCC made an arbitrary choice by listing one or two specifically instead of going after all the overseas companies. A block by the Department of Commerce of Google services surely moved a few knots but dint impacts the company much.
Huawei CEO Ren Zhengfei in an interview with Yahoo Finance said against the security concerns of 5G. Ren said: “there is no ‘single compartment’ that can threaten a country’s security.” He also said, 5G is not an atomic bomb. It will just let people communicate faster. Even asks how can it become a threat.
Some specs of the company don’t even require the US to function. But some solely depend directly on the US market. More than 80,000 technical staffs at Huawei are regularly revisiting the matters and trying everything possible to meet their needs. FCC may have direct contraband procedures with specific companies, they are trying to expand further by researching deep into the matter.