FCC Votes to Ban Broadband Subsidies to Suspect Tech

Huawei, ZTE are first to get boot
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After over a year in the hopper, the FCC has approved an item that prohibits carriers getting broadband subsidy money to use suspect tech in the networks they are using that money to build out. By suspect, the FCC says it means equipment, or services, that pose a national security threat to networks or the equipment supply chain. 

The vote was unanimous, with some reservations from O'Rielly and criticisms from the Democratic commissioners, and came at the FCC's monthly meeting Friday (Nov. 22).  

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The item comprised the order prohibiting the tech, as well as a further notice of proposed rulemaking. The further notice seeks input on whether to expand the prohibition beyond USF funded-nets, makes removing and replacing existing tech contingent on the availability of replacement tech, seeks input on how to reimburse carriers for that transition, and adopts an info collection regime to determine how much suspect already exists in networks. 

"We take these actions based on evidence in the record as well as longstanding concerns from the executive and legislative branches about the national security threats posed by certain foreign communications equipment manufacturers, most particularly Huawei and ZTE," said FCC chair Ajit Pai. "Given the threats posed by Huawei and ZTE to America’s security and our 5G future, this FCC will not sit idly by and hope for the best." 

FCC's Rosenworcel Offers Tweaks to Secure Networks Item 

O'Rielly said that while he approved of the item and recognized the threat of suspect tech, he was concerned that innocent companies could be caught up in that net, and wants to make sure there is an appeal process if the FCC gets the designation wrong. He was also concerned that the FCC had not sufficiently estimated the cost of replacing suspect tech in existing nets--the FCC estimates it could be as much as $2 billion--which are mostly smaller network operators, and that he did not want the ban to become an overly broad catch-all in the name of national security. 

He also said that his reservations obviously did not mean he was somehow in sympathy with those who would harm the nation, but simply looking to prevent abuses of the ban and remove and replace regimes. 

"In 2018, I called on the FCC to expand our proceeding and put even more options on the table, including the removal of covered equipment that carriers have already installed in their networks. That would include some of the equipment I saw out in Montana. After all, if equipment poses a threat, it’s not enough to stop subsidizing it: it must come out of the network. I am glad that we are moving forward with that idea and proposing to take that action today. 

Commissioner Starks said he supported the item, but that it was not enough. He urged the FCC to be proactive, not reactive, with national security measures. He called for creating an FCC National Security Task Force, encouraging the development of U.S. tech for 5G nets--both hardware and software-based--and said there needed to be a greater emphasis on the role of telecom in election security. For all that, he still called it a "very good" item. 

Starks said that while media attention has focused on social media use in election meddling, networks are also at risk. He said that is one reason why network security is so important. He said some thousand voting machines are still connected to wireless networks. He said the FCC has an obligation to protect national security, which he said should include the security of elections. 

Commissioner Jessica Rosenworcel said that it was past time to get suspect tech out of USF-supported networks, and for the FCC and the U.S. government to stop subsidizing that national security threat via the USF fund. 

Related: Commerce Allows U.S. Tech Supplies to Huawei 

She called the team a "long overdue, first step," saying it should not have taken 18 months to conclude that the tech should be excluded and removed. She also argued that the country still lacks a comprehensive, coordinated 5G rollout plan, and that the President's comment this week that Apple CEO Tim Cook will do it did not inspire confidence. "Who will tell him it doesn't work that way," she said. 

"Despite our actions today, we have to grapple with the fact that at any moment the Administration could trade away our security objectives for some momentary advantage in bilateral trade negotiations," Rosenworcel said. "I hope that does not occur, but let’s be honest, it has happened before, when this Administration reversed course on banning ZTE from doing business in the United States. If it happens again, it will have serious consequences for our credibility."

The FCC move drew praise from House Energy & Commerce Committee ranking member Greg Walden (R-Ore.).

"We all know the potential threats Chinese companies like Huawei pose to the security of America's communications infrastructure," Walden said. "We have a duty to protect American networks and our national security. Chairman Pai and the FCC are leading in this effort by putting a stop to American consumers funding foreign state actors who do not have our best interests at heart. The Energy and Commerce Committee just approved legislation to help our small internet service providers replace and upgrade the security of their networks without unduly burdening their consumers. The Secure and Trusted Communications Networks Act of 2019 will help the FCC carry out this important work," said Walden."

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