Sunday, October 2, 2022
Published 3 Years Ago on Thursday, Dec 05 2019 By Inside Telecom Staff
SHENZHEN, China (AP) — Chinese tech giant Huawei is asking a
U.S. federal court to throw out a rule that bars rural phone carriers from
using government money to purchase its equipment on security grounds.
The lawsuit announced Thursday is Huawei Technologies Ltd.’s
second legal challenge this year to Trump administration efforts to reduce its
already minimal U.S. market presence. The company is scrambling to preserve its
global sales of smartphones and network gear following sanctions announced in
May that limit access to U.S. components and technology.
Huawei, which says it is employee-owned and has no
government ties, denies U.S. accusations it is a security risk and might
facilitate Chinese spying.
Huawei is at the center of U.S.-Chinese tension over
Beijing’s technology ambitions and complaints the communist government steals
or pressures foreign companies to hand over know-how.
Huawei’s lawsuit in U.S. federal court in New Orleans says
the Federal Communications Commission acted improperly when it voted last month
to bar rural carriers from using government subsidies to buy equipment from
Huawei or its Chinese rival, ZTE Corp.
The decision “is based on politics, not security,”
Huawei’s chief legal officer, Song Liuping, told a news conference.
The lawsuit says the FCC exceeded its authority by making
national security judgments, designated Huawei a threat without evidence and
violated its own procedures by adopting a rule without citing a legal basis.
American courts have traditionally been reluctant to
second-guess government judgments about national security.
In a separate lawsuit filed in March, Huawei is asking a
federal court in Texas to strike down a ban on the U.S. government using its
equipment or dealing with any contractor that does.
Meanwhile, U.S. prosecutors are trying to extradite Huawei’s
chief financial officer from Canada to face charges she lied to banks about
dealings with Iran.
Chinese authorities say the United States is exaggerating
security concerns to block a potential competitor.
Huawei warned the FCC rule will hurt rural American
carriers, which buy the Chinese vendor’s equipment because other major
suppliers such as Nokia and Ericsson are more expensive.
Song said that while potential lost sales are minimal, if
the rule is allowed to stand, Huawei might suffer “reputational
losses” that will “have a further impact on our business.”
Huawei’s U.S. sales plunged after a congressional panel
warned in 2012 the company and ZTE were security risks and told carriers to
avoid them. However, its sales in Europe and developing markets in Asia and
Africa have risen steadily.
Huawei earlier reported its global sales rose 24.4% in the
first nine months of 2019 over a year earlier to 610.8 billion yuan ($86
The Trump administration imposed curbs in May that threaten
to disrupt Huawei’s sales of smartphones and network gear by blocking access to
U.S. technology and components including Google’s music, maps and other mobile
The Trump administration has announced a series of limited
reprieves that allow vendors to supply technology needed to support wireless
networks in rural areas.
In November, Huawei started selling a folding
smartphone, the Mate X, made without U.S.-supplied processor chips or Google
apps. The company also has unveiled a smartphone operating system it says can
replace Google’s Android if necessary.
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