The FCC has rejected ZTE’s request for the reconsideration of its designation as a US national security threat. If you’ll recall, the commission formally named Shenzhen-based manufacturers ZTE and Huawei as national security threats back in June, warning US carriers that using the companies’ equipment poses a risk of espionage. Both companies deny that they’re spying for the Chinese government, and both submitted petitions for their designation to be overturned.
The companies being recognized as a national security threat means US carriers can’t tap into the FCC’s $8.3 billion annual Universal Service Fund to purchase, upgrade or maintain any equipment from the two companies. Small rural carriers in the country rely on the relatively affordable equipment manufactured by Huawei and ZTE for their networks, but they also need the FCC’s funding to maintain them.