FCC blocks U.S. companies from using federal funds for deals with Huawei, ZTE

The Federal Communications Commission on Friday banned U.S. companies from using federal funds to purchase equipment from two leading Chinese telecommunications firms and is prepared to spend $2 billion to replace existing unsecure gear. The measure targets China’s Huawei Technologies and ZTE, companies that have sold state-subsidized equipment to rural wireless carriers, including one service provider near a U.S. nuclear missile base in Montana. The commission adopted a new rule prohibiting American telecommunications companies from buying equipment from foreign companies that pose a threat to U.S. security with FCC money in the Universal Service Fund, an $8 billion pot of funds used to subsidize rural telecommunications networks.

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