The U.S. Federal Communications Commission has designated Chinese telecommunication providers Huawei and ZTE as national security risks, a decision that officially prohibits American phone companies from purchasing their equipment with government subsidies. The announcement Tuesday comes after U.S. intelligence agencies have repeatedly warned that Huawei and ZTE could conduct espionage against the U.S. and its allies on Beijing’s behalf. The FCC’s decision takes effect immediately. It prevents U.S. companies regulated by the agency from spending federal funds obtained through the $8.3 billion Universal Service Fund (USF) — which is designed to promote universal access to phone services — on equipment or services from Huawei or ZTE. The companies are subject to a Chinese law that requires firms to provide authorities with sensitive data, even if they’re unwilling to do so. FCC Chairman Ajit Pai said in a statement that both companies “have close ties to the Chinese Communist Party and China’s military apparatus,” […]
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