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FCC's Pai moves to block use of communications suppliers deemed security risks

U.S. Federal Communications Commission Chairman Ajit Pai on March 26 proposed new rules that would bar recipients of its Universal Service Fund, a program designed to help offset the cost of connecting rural residents to phone and internet services, from purchasing communications network equipment or services from companies deemed to pose a threat to U.S. national security.

While Pai's proposal did not name any companies or countries that could pose a potential threat, it follows the introduction of U.S. legislation that seeks to limit the U.S.'s exposure to Chinese technology firms. The Defending U.S. Government Communications Act pending in the House and Senate would block the U.S. government from buying or leasing telecommunications equipment and services from Chinese tech giants Huawei Technologies Co. Ltd. and ZTE Corp., specifically. Thus far, neither Congressional chamber has taken action on the legislation, which remains pending in committee reviews.

U.S. officials also cited national security concerns when blocking Singapore-based Broadcom Ltd. from acquiring QUALCOMM Inc.

"Threats to national security posed by certain communications equipment providers are a matter of bipartisan concern," Pai said in a March 26 statement. "Hidden 'back doors' to our networks in routers, switches — and virtually any other type of telecommunications equipment — can provide an avenue for hostile governments to inject viruses, launch denial-of-service attacks, steal data, and more."

The FCC will hold an initial vote for the proposal April 17.

Huawei has already faced setbacks in marketing some of its smartphones in the U.S. An expected deal for its upcoming Mate 10 Pro to be distributed by AT&T Inc. collapsed earlier this year, reportedly in part due to pressure from U.S. government officials.