US regulators bar govt telecom funds for Huawei, ZTE

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FILE - In this Dec. 6, 2018, file photo, a man lights a cigarette outside a Huawei retail shop in Beijing. The Federal Communications Commission on Friday, Nov. 22, 2019 voted, 5-0, to bar U.S. telecommunications providers from using government subsidies to pay for networking equipment from companies that are a threat to national security. The agency says Chinas Huawei and ZTE pose such a threat. (AP Photo/Ng Han Guan, File)

U.S. communications regulators have cut off government funding for equipment from two Chinese companies, citing security threats.

The Federal Communications Commission also proposed requiring companies that get government subsidies to rip out any equipment from Huawei and ZTE that they already have in place.

It’s the latest action by the U.S. government against Chinese tech and telecom companies.

The FCC voted unanimously Friday to bar U.S. telecommunications providers from using government subsidies to buy equipment from Huawei or ZTE. The FCC’s order mostly affects small, rural companies, as larger U.S. carriers do not use equipment from those Chinese companies.

In a statement Saturday, Huawei urged the FCC to reconsider what it called a "profoundly mistaken" and "unlawful order."

It said the decision was "based on selective information, innuendo, and mistaken assumptions" and that "these unwarranted actions will have profound negative effects on connectivity for Americans in rural and underserved areas across the United States."

As for replacing existing equipment, the FCC is asking for comment on how to help rural telecoms financially. Bills in Congress have proposed setting $700 million to $1 billion aside.

A trade group for small rural wireless carriers has said that it would cost up to $1 billion for its dozen companies to replace their Huawei and ZTE equipment. It says that Huawei has 40 customers in the U.S. (Huawei is also a member of the trade group, the Rural Wireless Association.)