ZTE Is Still A National Security Threat To The U.S., Says FCC

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ZTE is still a national security threat to the United States, the Federal Communications Commission said this week. The agency's assessment was technically a reassessment of an earlier ruling. The one that sidelined ZTE from the Western markets in the same way it crippled Huawei. That method being meticulously and mercilessly.

Both ZTE and Huawei pushed back against Washington's many sanctions and bans using all available remedy channels. One of their many attempts at doing so came in the form of a formal petition with the FCC early this year. If that sounds like a long shot on a long list of long shots, that's because it is. So it should hence come as no surprise that the complaint amounted to nothing. That's according to an official FCC statement issued Tuesday.

This bureaucratic equivalent to a Hail Mary was still worth it from ZTE's perspective. As its worst-case outcome is a status quo with one extra wave of damaging media headlines. The one happening right now, reminding you the U.S. government considers ZTE a national security threat. And media headlines are the least of ZTE's worries right now, for obvious reasons.

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Even so, the FCC's national security threat label has a pretty narrow purview and is only a small piece in the ongoing tensions between the U.S. and China. It's not even a significant portion of ZTE's current woes. As it only officially prevents it from accessing the FCC’s Universal Service Fund. That's $8.3 billion in annual telecom funding it would not have been able to capture anyway. Not in recent years, given the political climate. The FCC's order was merely a formality, as was ZTE's appeal.

This song and dance is brought to you by Chinese capitalists in service of bureaucrats and American bureaucrats in service of capitalists

Huawei, however… took things personally. And by that, I mean they have more money, so their dissatisfaction is worth more, as it usually is in life. To illustrate, let's draw attention to the fact that the FCC's Public Safety and Homeland Security Bureau dismissed only ZTE's filing this week. Huawei submitted its petition separately and elaborately enough for the FCC to actually extend its typical response timeframe. And that period isn't short, by any means.

The said ban, officially called the Protecting Against National Security Threats Order that both Chinese telecom giants appealed, provides a 120-day deadline for such communication. And so, while both ZTE and Huawei petitioned against the order back in February, the FCC pushed back its deadline for responding to the latter by an additional two weeks this past Wednesday.

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The new date is December 11th, but that's not a testament to the validity of Huawei's legal argument. Simply an acknowledgment of the fact that Huawei has deeper pockets than ZTE. Huawei is enormous, mind you, even on a global level. Meaning ZTE put fewer attorneys on the case and so produced less petition documentation. Huawei, on the other hand, managed to legitimately bury a federal agency numbering 1,454 employees, according to a 2019 workforce profile disclosed by the government. It did so with over 5,000 pages of argumentation constituting its complaint.