U.S. Congressman Mike Conaway (R-Texas) introduced a bill that specifically names ZTE and Huawei as companies the U.S. should not do business with. The H.R. 4747 bill entitled “The Defending U.S. Government Communications Act” prohibits the government from purchasing or leasing telecommunications equipment and/or services from Huawei and ZTE.
“Chinese commercial technology is a vehicle for the Chinese government to spy on United States federal agencies, posing a severe national security threat,” said Congressman Conaway in a prepared statement. “Allowing Huawei, ZTE, and other related entities access to U.S. government communications would be inviting Chinese surveillance into all aspects of our lives.”
The bill cites a 2015 FBI note that warned the use of Huawei equipment and services in U.S. telecommunications service provider networks could be exploited through Chinese cyber activity “with China’s intelligence services operating as an advanced persistent threat to U.S. networks.”
The bill also mentioned ZTE’s run-in with the U.S. government. In March 2017, ZTE pled guilty to conspiring to violate the International Emergency Economic Powers Act. ZTE had to pay the United States government an $892 million penalty for breaking U.S. sanctions by shipping equipment made with U.S. components to Iran and for sending telecom equipment and software made in the U.S. to North Korea.
ZTE and Huawei equipment is not currently banned in the United States. But neither is it widely deployed. A 2012 congressional report warned that Huawei’s networking equipment could potentially be used for spying. That report has caused reticence among major U.S. carriers to use the Chinese equipment in their networks.
Last week was tough for Huawei. The company had hoped to announce a channel deal with AT&T for the carrier to sell Huawei smartphones in the U.S. But AT&T backed out of the deal and left Huawei to save face at the CES show in Las Vegas.
And then Representative Conaway announced his H.R. 4747 bill on Friday.