The Federal Communications Commission plans to ban all sales of new Huawei and ZTE telecommunications devices in the U.S. — as well as some sales of video surveillance equipment from three other Chinese firms — out of national security concerns, sources with direct knowledge of the private deliberations told Axios.

Why it matters: The move, which marks the first time the FCC has banned electronics equipment on national security grounds, closes a vise on the two Chinese companies that began tightening during the Trump administration.

* The ban marks the culmination of years of warnings from security researchers, analysts and intelligence agencies that the Chinese government could use Chinese-made telecommunications equipment to spy on Americans.

* The price could come in higher costs for some smaller telecommunications providers that favored the Chinese companies' products thanks to their aggressive pricing.

Behind the scenes: On Oct. 5, FCC Chairwoman Jessica Rosenworcel circulated a draft order among her fellow commissioners. The order — which still needs to be voted on — would effectively ban new equipment sales in the U.S. from firms that pose a threat to national security, two sources with direct knowledge told Axios.

* The order would ban telecommunications equipment from Chinese telcos Huawei and ZTE. The FCC previously prohibited companies from using federal funding to purchase equipment from these firms, but the new order would extend this ban to all purchases.

* The FCC order will also determine the scope of a ban on sales of video surveillance equipment used for public safety. This would affect the Chinese companies Hytera Communications Corporation, Hikvision and Dahua Technology Company, the sources told Axios.

Yes, but: The ban is not retroactive, so the companies can continue to sell products that the FCC previously approved, one source told Axios.

* New models or equipment that would need a new FCC approval, however, would be banned.

What they're saying: "Hikvision presents no security threat to the United States," a Hikvision spokesperson told Axios in a statement. "There is no technical or legal justification for why Hikvision should be impacted by the forthcoming Federal Communications Commission (FCC) rules."

* Huawei and ZTE did not respond to requests for comment.

Flashback: The FCC was required to vote on the order within a year of the passage of the Secure Equipment Act, which President Biden signed into law on Nov. 11, 2021.

* That law required the FCC to ban equipment sales by companies that pose an "unacceptable risk to the national security" of the U.S.

FCC Commissioner Brendan Carr in March 2021 called on the agency to close the so-called "Huawei loophole" which allowed companies to use private sector money to buy equipment from the firm because the FCC still authorized sales of its devices.

By: DocMemory
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