The Federal Communications Commission (FCC) on Tuesday formally designated Huawei Technologies and ZTE as posing threats to U.S. national security, a declaration that bars US firms from tapping an $8.3 billion government fund to purchase equipment from the companies.
The US telecommunications regulator voted in November 5-0 to issue the declaration and proposed requiring rural carriers to remove and replace equipment from the two Chinese companies from existing US networks.

“We cannot and will not allow the Chinese Communist Party to exploit mobile network vulnerabilities and compromise our critical communications infrastructure,” FCC Chairman Ajit Pai said in a statement Tuesday.

“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,” Ajit Pai said.

The action will protect the FCC’s Universal Service Fund — money that comes from fees paid by American consumers and businesses on their phone bills — from being used to underwrite these suppliers, which threaten our national security.

At present, India government is considering a blanket ban on the telecom equipment supplied by Huawei and ZTE to Indian telecom operator such as Bharti Airtel, Vodafone Idea, Reliance Jio and BSNL.