FCC Can Block Subsidized Purchases of Huawei’s 5G Technology

A federal appeals court ruled that Huawei can’t subsidize the sale of its 5G technology with federal funds earmarked for US broadband development because the Federal Communications Commission determined the company is a national security threat. The 5th Circuit Court agreed that the FCC was fully within its power and competence to issue the rule barring “Universal Service Fund” subsidies recipients from buying equipment or services from companies deemed national security risks. In a 61-page opinion, the judges said Huawei’s claim that the FCC was usurping the role of State Department or other foreign-relations experts was unfounded, and that "assessing security risks to telecom networks falls in the FCC’s wheelhouse.” Huawei complained that the FCC’s order stigmatized the company and drove away customers fearful of investing in 5G technology opposed by the Trump administration. However, the FCC’s order came after similarly negative national security assessments were made by the UK, Japan, Australia and New Zealand.