TAIPEI (Taiwan News) — A U.S. federal appeals court denied Chinese telecoms giant Huawei’s request to throw out a rule used to bar rural phone carriers from using government funds to buy its equipment on national security grounds.
The 5th Circuit Court of Appeals in New Orleans, Louisiana on Friday (June 18) found that the Federal Communications Commission (FCC) was within its power and competence to issue the rule barring “Universal Service Fund” subsidies recipients from purchasing equipment or services from firms designated as national security risks, according to AP.
Huawei also argued that the FCC did not have the expertise to decide if its equipment posed a national security risk. The three-panel judge in a 60-page opinion said that assessing security risks to telecom networks falls in the “FCC’s wheelhouse.”
The Trump administration slapped sanctions on Huawei, saying their 5G equipment could be used by China for spying, an allegation that Huawei has repeatedly denied. Huawei sued the FCC in late 2019 after the agency barred rural carriers from using government subsidies to buy kit from Huawei or ZTE Corp, the AP reported.
Rural carriers normally use the Universal Service Fund subsidy plan to cover network deployment costs.
The ruling was in line with a tradition of U.S. courts not to question government arguments concerning national security, the AP said. The decision is another blow for Huawei, as it continues to lose market share abroad and at home due to U.S. sanctions.