Economic ‘carpet bombing’: Huawei looks to reverse FCC order barring US companies from using federal funds to buy its products

Chinese tech giant Huawei has filed a complaint seeking to overturn an FCC ruling that bans American firms from using an $8.5 billion federal fund to buy electronics from the company, dubbing it a metaphorical “carpet bombing.”

Filed late Wednesday, Huawei’s petition argues the FCC order “exceeds the agency’s statutory authority and violates federal law, the Constitution, and other laws.” The ruling prohibited US companies from purchasing Huawei products using money from the Universal Service Fund (USF), established in 1997 to subsidize American telecoms.

“This is our opportunity to use one of the legally permissible mechanisms to try to block the United States government from the carpet bombing of Huawei in the United States and trying to destroy us around the world,” Andy Purdy, chief security officer at Huawei USA, told CNBC.

They’ve really gone too far and so this is our way of saying enough.

The FCC carried out the policy change in November on the advice of Attorney General William Barr and FBI Director Christopher Wray, who insisted Huawei – as well as ZTE, another Chinese tech company – “cannot be trusted” and represented a “threat to our collective security.” Neither official thought it necessary to provide evidence to support their assertions.

Because the ruling also deemed Huawei a national security threat – stating it was obligated under Chinese law to pass its data to the government – the company says it was unlawfully deprived of its right to due process. Glen Nager, lead counsel for Huawei, said in a statement that the FCC order was a “shameful prejudgment” based on a “fundamental misunderstanding of Chinese law.”

Washington has long had Huawei in its crosshairs, placing it on an economic blacklist in May, barring American firms from doing business with the company on the grounds that its networking gear could be used for espionage, despite repeated objections and denials from top executives. Because some US telecoms operating in rural areas still rely on Huawei products, however, the government has granted several 90-day exemptions, the latest of which came in mid November.

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