The Federal Communications Commission voted 4-0 to ban the sale of new telecommunications and surveillance equipment made by several Chinese companies, arguing that their ownership and practices threaten US national security.
The rule change affects 10 companies already subject to other restrictions and prevents them from marketing or importing new products. It includes security camera maker Hangzhou Hikvision Digital Technologies Co.
Hytera Communications corp.
and Zhejiang Dahua Technology Co.
and telecommunications equipment maker Huawei Technologies Co. and ZTE corp.
The FCC issued its ruling on Friday. The final order does not require U.S. equipment buyers to remove items they have already purchased or remove licenses for electronic models that already exist.
A Hikvision spokesman said the FCC’s decision will not protect US national security, “but will make it more harmful and more expensive for US small businesses, local governments, school districts, and individual consumers.”
A Huawei spokeswoman declined to comment. Representatives for Hytera, Dahua and ZTE could not immediately be reached for comment. Technology companies have spent months protesting the proposed ban in regulatory filings.
The FCC’s move is the latest to crackdown on China’s technology sector by U.S. officials and could challenge a tentative agreement reached earlier this month by President Biden and Chinese President Xi Jinping. The two leaders agreed to try to avoid a downward spiral in US-China relations and resume high-level contacts and find areas of cooperation such as working on climate change.
After the Biden-Xi meeting in the middle of this month, Treasury Secretary Janet Yellen held talks with the Governor of the Central Bank of China and Defense Minister Lloyd Austin with his Chinese counterpart.
However, Chinese Foreign Minister Wang Yi has said that the responsibility of improving relations lies with the United States, which, according to him, should respect China’s interests. Among the tough spots is the Biden administration’s decision in October to ban exports of advanced semiconductors and devices to China in order to counter Xi’s key goals of boosting China’s technology and military capabilities.
ZTE and Huawei in particular have already been hit by US export controls and other countries have faced pressure campaigns by Washington to limit trade with Chinese telecommunications equipment makers. Surveillance equipment makers are also the latest targets of the Biden and Trump administrations and US regulators.
Russian security software maker Kaspersky Lab is also on the list of tech companies covered by the sanctions.
Hikvision said in an FCC filing earlier this month that the ban would represent an “unprecedented, unfair and illegal practice of restricting the authorization of end-user video surveillance equipment that may never be connected to a public telecommunications or broadband network.” ”
Chinese companies have made limited inroads into U.S. cable and cellphone networks over the past decade, but their footprints in the commercial surveillance market run deep. Hikvision is the top seller of professional security equipment worldwide by revenue and ranks No. 5 in the United States, according to market researcher Omdia.
The FCC’s bipartisan decision adds to a growing list of U.S. regulations designed to block access to American infrastructure by Chinese technology companies that officials consider particularly vulnerable to potential espionage or disruption. The FCC in 2019 barred businesses that receive federal telecommunications subsidies from buying Huawei or ZTE equipment. The restriction hurt Huawei’s new sales to rural cable and wireless companies, but fell short of a total ban.
The FCC later began a rulemaking process to create a list of foreign technology companies that “pose an unacceptable risk to the national security of the United States or to the safety and security of the United States public.” The agency said in 2021 that it was considering whether the radio signals authority could be used to limit the authority of covered companies to sell wireless devices.
– Charles Hutzler contributed to this article.
Write to Drew FitzGerald at [email protected]
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Published on November 26, 2022, as “Banking Chinese Technology Development”.