New U.S. Law Further Restricts Use of Equipment from Huawei, ZTE, Others

After the U.S. House of Representatives passed similar legislation on October 20, yesterday the Senate passed its own version of a law designed to tighten existing restrictions on products from companies on the "Covered List" maintained by the Federal Communications Commission (FCC). Companies currently on the list are: Huawei, ZTE, Hytera Communications Corp, Hangzhou Hikvision Digital Technology Co, and Zhejiang Dahua Technology Co.

The legislation is somewhat narrow in scope, but tightens up existing restrictions on using foreign telecoms products. Its key provision states that: "the Commission shall clarify that the Commission will no longer review or approve any application for equipment authorization for equipment that is on the list of covered communications equipment or services published by the Commission under section 2(a) of the Secure and Trusted Communications Network Act of 2019."

Previously, products and services from the Covered List could not be purchased using federal funds. Now, under the new legislation, they are barred from sale in the United States regardless of the funding source.

Senator Markey (D-MA), a co-sponsor of the legislation, explained the importance of the legislation this way:

The Secure Equipment Act directs the Federal Communications Commission (FCC) to adopt rules clarifying that it will no longer review or issue new equipment licenses to companies – such as the People’s Republic of China state-backed firms Huawei and ZTE – on the agency’s “Covered Equipment or Services List” that pose a national security threat. The FCC is required to maintain this list under the Secure and Trusted Communications Networks Act of 2019, which laid out detailed criteria for determining what communications equipment or services pose an unacceptable risk to U.S. safety. In 2020, the FCC adopted new rules to require that U.S. telecommunications carriers rip and replace equipment provided by “covered” companies. While that was an important step, those rules only apply to equipment purchased with federal funding. The very same equipment can still be used if purchased with private or non-federal government dollars. Senators Markey and Rubio introduced the Secure Equipment Act to close this loophole and further prevent identified security threats from having a presence in U.S. telecommunications networks. Subsequently, the FCC initiated a rulemaking that mirrors the lawmakers’ proposal, and the Senate Commerce, Science, and Transportation Committee advanced a modified version of the Secure Equipment Act that will ensure the agency takes timely action on this issue.

Anna Eshoo (D-CA), a co-sponsor of the House legislation, described its purpose in similar terms:

The Secure Equipment Act would prevent equipment manufactured by Chinese state-backed firms such as Huawei, ZTE, Hytera, Hikvision and Dahua from being further utilized and marketed in the United States. This legislation adds an extra layer of security that slams the door on entities that pose a national security risk from having a presence in the U.S. telecommunications network.

The legislation will now be sent to President Biden for signature into law.

UPDATE November 12, 2021:

On November 11, President Biden signed the legislation into law.