Huawei failed in its attempt to sue for US subsidies for its customers. U.S. regulator FCC may classify Huawei as a national security risk and refuse to pay subsidies accordingly, federal appeals court says. In addition, Huawei’s accusation of procedural deficiencies was unfounded.
In 2019, the FCC decided that it would not provide funding from the Universal Service Fund for the installation of risky technology. In 2020, the U.S. regulator then designated Huawei and ZTE as security risks. This means that US network operators are not allowed to spend money from the universal service fund on purchases from Huawei and ZTE.
This has consequences especially for smaller regional carriers in the USA, which are the only ones still using Huawei technology anyway. They will have to resort to federal funding for network expansion in sparsely populated rural areas. Huawei’s appeal against the restriction was dismissed by the FCC in December 2020, citing the "overwhelming evidence" .
The company was under direct prere from the Chinese government to engage in espionage activities, it argued. In addition, Huawei’s relations with the People’s Liberation Army of the People’s Republic of China posed a risk. The vote of the five FC commissioners was unanimous across party lines. Huawei filed a lawsuit against the FCC decision.
FCC has jurisdiction
Against the federal appeals court, Huawei had argued that the FCC’s decision was "arbitrary" that the FCC violated procedural rules and that the agency has no authority to make decisions about national security ies. This is the responsibility of the president, the parliament, the secret services and the.
The three judges did not agree with this approach: The assessment of risks for telecommunication networks is very well the task of the FCC. In addition, the regulatory authority has been supported in its decision by "robust" Contributions of other authorities and officials with relevant expertise can be guided. The court also rejects Huawei’s other arguments.
Ordinary legal remedies are no longer available to Huawei. In theory, the company can ask for the case to be reheard by an expanded bench of the same court, or for a hearing before the U.S. Supreme Court. Such requests are rarely approved.
The process is Huawei v. FCC and was decided by the U.S. Court of Appeals for the Fifth Circuit under case no. 19-60896.