Huawei going to court to win access to U.S. rural telecom market
December 10, 2019 Category IT & Telecom, Weekly
Song Liuping, Huawei Chief Legal Officer, at a press conference in Shenzhen
The legal battle between Huawei Technologies and the United States government is intensifying. The company announced a legal challenge to the U.S. Federal Communications Commission (FCC), seeking to overturn its order banning telecom carriers from buying the company’s equipment using federal subsidies. Analysts said the FCC ban would have very limited impact on Huawei’s financial performance, but labeling the company a national security threat would cause far reaching harm to its reputation. In a petition filed in the U.S. Court of Appeals for the Fifth Circuit, Huawei asked the court to declare the FCC order unlawful on the grounds that it fails to offer Huawei due process protections in labeling it a national security threat.
Song Liuping, Huawei’s Chief Legal Officer, said that “banning a company like Huawei, just because we were founded in China – this does not solve cybersecurity challenges”. Song said FCC Chairman Ajit Pai and other FCC officials failed to present any evidence to prove their claim and ignored the facts and objections raised by Huawei and U.S. rural carriers. Huawei’s products are currently used by rural telecom carriers in the U.S. to offer network and broadband services in some of the most remote regions. Steve Berry, President and CEO of the Competitive Carriers Association, a trade group for about 100 wireless providers in the U.S., said in a statement to the FCC that services provided by Huawei are almost always less expensive and can be more reliable than their market competitors. As a result of the ruling, carriers will be deterred from investing in their networks and adopting new technologies, the Association said. Replacing Huawei’s equipment would be very costly to the telecom providers. Song Kai, Vice President of Huawei’s Corporate Communications Department, said the company’s revenue in the U.S. is negligible. It is also marginal relative to Huawei’s annual USD11 billion procurement of U.S. components. But labelling Huawei as a national security threat and pressuring European regulators to also exclude the company from their networks incited the company to take legal action.
U.S. authorities are also considering putting Huawei on the Treasury Department’s Specially Designated Nationals (SDN) list, which would make it virtually impossible for Huawei to complete transactions in U.S. dollars, and lead to the freezing of its U.S. assets. This would also severely impact Huawei’s business in Europe and in Asia outside China.
Zhang Ming, Ambassador of the Chinese Mission to the European Union, recently slammed U.S. Secretary of State Mike Pompeo for his disinformation campaign against China and Huawei. “Despite all the witch hunts and media hype, not a single country or individual has come up with solid evidence to prove that Huawei poses a security threat,” he said. Portuguese officials have told U.S. Pompeo they won’t exclude Chinese companies from competing in a tender for the next-generation 5G wireless network.
Huawei is planning to move its research center to Canada from the United States. The company will also manufacture some mobile network equipment outside China, according to company Founder Ren Zhengfei. According to a report by Oxford Economics, Huawei supports nearly 5,000 full-time Canadian jobs, has invested USD164 million in R&D initiatives, and generated USD204 million in taxation.
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