Huawei asks US court to overturn FCC order on $8.5 bn subsidy

Huawei announced a legal action against the Federal Communications Commission (FCC), seeking the US court to overturn an order passed by the FCC on Nov. 22.
Huawei 5G for innovation
The order bans carriers in rural America from tapping the Universal Service Fund (USF) to purchase Huawei equipment. Leading telecom network makers such as Nokia and Ericsson will be the main beneficiary from the ban.

FCC last month voted to designate Huawei Technologies and ZTE as national security risks, barring their U.S. rural carrier customers from tapping an $8.5 billion government fund to purchase Huawei or ZTE telecommunications equipment.

Shenzhen, China-based Huawei filed a petition in the United States Court of Appeals for the Fifth Circuit, asking the court to hold the FCC’s order on the grounds that it fails to offer Huawei required due process protections in labelling Huawei as a national security threat.

“Huawei believes that the FCC also fails to substantiate its arbitrary findings with evidence or sound reasoning or analysis, in violation of the U.S. Constitution, the Administrative Procedure Act, and other laws,” Huawei’s Chief Legal Officer Song Liuping said at a press conference in China.

Huawei said both FCC chairman Ajit Pai and other FCC commissioners failed to present any evidence to prove their claim that Huawei constitutes a security threat, and ignored the facts and objections raised by Huawei and rural carriers after the FCC first made the proposal in March, 2018.

Carriers across rural America, in small towns in Montana, Kentucky, and farms in Wyoming –choose to work with Huawei because they respect the quality and integrity of its equipment, Huawei said.

Glen Nager, Huawei’s lead counsel for the legal action, said the FCC has adopted a standard-less rule that, by its own admission, was designed with only Huawei and another Chinese company (ZTE) in mind.

Nager said the decision adopted by FCC exceeds the agency’s statutory authority, as the FCC is not authorized to make national security judgements or to restrict the use of USF funds based on such judgments. The Commission has no national security expertise or authority, Huawei said in a statement.

FCC chairman on Wednesday said he will propose $9 billion in funding over the next decade to boost 5G telecommunications coverage in rural areas. The main beneficiary from the $9 bn 5G fund will be companies such as Cisco, Ericsson and Nokia.