FCC chief raises concerns about espionage threats from Chinese telecoms

By David Shepardson

WASHINGTON (Reuters) – Federal Communications Commission Chairman Ajit Pai said he shares U.S. lawmakers’ concerns about espionage threats from Chinese smartphone maker Huawei Technologies Co. and plans to take “proactive steps” to ensure the integrity of the U.S. telecoms supply chain.

Pai, in a March 20 letter to lawmakers released Friday, said he shared concerns about the “security threat that Huawei and other Chinese technology companies pose to our communications networks.” Pai said he intended to take action in the “near future” but did not provide any details.

An FCC spokesman declined to comment.

Pai’s letter follows legislation introduced by Republican senators Tom Cotton and Marco Rubio in February that would prevent the U.S. government from buying or leasing telecommunications equipment from Huawei, the world’s third-largest smartphone maker, or Chinese telecommunications equipment maker ZTE Corp. citing concerns that the companies could use their access to spy on U.S. officials.

Chinese companies have come under increased scrutiny in the United States in recent years over concerns they could be conduits for espionage, something the Chinese companies have consistently denied.

Pai, the top U.S. telecom regulator, said in his letter that the FCC does not buy or use Huawei or ZTE products or equipment, “and I do not expect that would change if a major U.S. telecom company were to partner with Huawei.”

Huawei declined to comment on Friday on Pai’s letter.

In January, Huawei’s planned deal with U.S. carrier AT&T Inc (TN) to sell smartphones in the United States fell through at the last minute. AT&T was under pressure to pull out of the deal after lawmakers sent a letter to Pai expressing concerns about Huawei’s plans to launch consumer products through the major U.S. telecom carrier.

In February, Republican Senator Richard Burr, chairman of the Senate Intelligence Committee, told a hearing that he was concerned about the spread in the United States of “counterintelligence and information security threats that are inherent in the goods and services of some foreign suppliers.”

“My concern today is China,” Burr added, “specifically Chinese telecommunications companies like Huawei and ZTE Corp, which are widely known to have extraordinary ties to the Chinese government.”

During questioning at the trial, none of the intelligence officers stated that they would use a Huawei or ZTE product.

In 2012, Huawei and ZTE were the subject of a U.S. investigation into whether their equipment could be used for foreign espionage or to threaten critical U.S. infrastructure, allegations the companies have consistently denied.

Earlier this week, Best Buy Co Inc (BBY.N), the largest U.S. consumer electronics retailer, decided to end its relationship with Huawei amid increased scrutiny of Chinese technology companies in the United States, Reuters reported.

(Reporting by David Shepardson and Diane Bartz; Editing by Leslie Adler)