Arthur J. Villasanta – Fourth Estate Contributor
Washington, DC, United States (4E) – The White House is said to be considering issuing an Executive Order (EO) that will ban U.S. companies from using telecommunications equipment made by Huawei Technologies co, Ltd and ZTE Corporation, two of China’s leading telecom equipment makers.
This EO might be issued as early as January but won’t single out Huawei and ZTE. Instead, it will direct the Department of Commerce to block U.S. companies from buying equipment from foreign telecommunications makers such as ZTE and Huawei that pose significant national security risks to the United States
Reliable sources quoted by media said the White House intends to declare a national emergency by invoking the International Emergency Economic Powers Act (IEEPA) law so it can ban the sale in the U.S. of telecom equipment made by both firms.
The United States has long claimed both Huawei and ZTE conduct espionage on behalf of the Chinese government, and that their cheap equipment can be used to spy on Americans.
IEEPA gives the president the authority to regulate commerce in response to a national emergency that threatens the United States.
The executive order has been in the works for more than eight months but its text has yet to be finalized.
To be hard hit by the new EO will be rural operators throughout the U.S. that are among the biggest customers of Huawei and ZTE, whose equipment is cheaper than most of those sold by U.S. and European telecom manufacturers.
Rural operators fear they may also have to trash existing Chinese-made equipment without compensation. Industry officials are divided on whether the administration can legally compel operators to do that.
Small rural carriers continue to rely on Huawei and ZTE switches because their equipment is a lot less expensive than their competitors. The Rural Wireless Association (RWA) estimates that 25 percent of its members have Huawei or ZTE equipment in their networks.It represents carriers with fewer than 100,000 subscribers.
RWA is concerned the proposed EO will force its members to remove ZTE and Huawei equipment and also bar future purchases, said Caressa Bennet, RWA general counsel. RWA said it will cost from $800 million to $1 billion for all RWA members to replace their Huawei and ZTE equipment.
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