Just weeks after President Biden and Chinese leader Xi Jinping met face-to-face to restore dialogue between the two countries, the Federal Communications Commission adopted new rules that could limit national security threats posed by Chinese-made communications and electronic devices. The FCC said last week it adopted the new rules "to further secure our communications networks and supply chains from equipment that poses an unacceptable risk to national security."
The rules will prohibit market access of certain equipment in the United States by banning the authorization of items the FCC believes pose national security concerns. The agency said it will do this by expanding the devices, communications equipment, and entities placed on its "Covered List" and require those seeking equipment authorization to state that they are not putting those items into the market.
In a statement, FCC Chairwoman Jessica Rosenworcel said the U.S. "need[s] to ensure the networks we know today become more secure over time and evolve to withstand cyberattack from those who wish to do us harm."
The FCC has the authority to regulate equipment and devices that use radio frequencies in the U.S. These devices cannot be lawfully marketed or sold in the country unless authorized under the FCC's rules. Such authorization can come by either obtaining a grant of equipment certification, or following the Suppliers Declaration of Conformity process, depending on the type of device. Entities that market communications, wireless, and electronic devices in the U.S. are responsible for ensuring that they are properly authorized under the FCC's rules or face the possibility of enforcement investigations and monetary penalties.
Under direction and authority from Congress, the agency has taken action against several Chinese companies in light of possible national security threats that may occur through communications equipment and wireless devices.
Over the last few years, the agency has taken action to prevent Chinese companies such as China Telecom from providing 214 international telecommunications services within the U.S. It also banned the use of federal funds, in particular Universal Service Funds, for purchasing telecommunications network equipment from certain Chinese companies believed to have ties with the Chinese government.
These decisions have been part of a larger effort by the U.S. government to limit possible means of conducting surveillance on U.S. consumers. Meanwhile, Brendan Carr, the senior Republican FCC commissioner, recently traveled to Taiwan to attend meetings with the country's National Communications Commission. He has also called for the Council on Foreign Investment in the U.S. (CFIUS) to ban TikTok in the U.S., citing concerns about the company's use of data obtained from American citizens.
Chinese companies have pushed back. Earlier this month, Hikvision, a Chinese company that is partially owned by an entity controlled by the Chinese government, sent a lengthy letter to the agency responding to "press reports" of likely FCC action. In the letter, Hikvision argues that the FCC does not have the authority to take action to prohibit its products such as video surveillance cameras connected to private and not to public telecommunications networks.
Three weeks after receiving the letter, the agency ,adopted its new rules. These rules impose burdens on all manufacturers and sellers of electronic equipment in the U.S. – not just Chinese – requiring applicants for equipment certification to certify that the item is not on the Covered List and to designate a U.S. agent for service of process. The item also includes a further notice of proposed rulemaking asking whether the FCC should revoke existing grants of equipment authorization because of national security concerns.
Comments on the additional proposals may be filed with the FCC after publication of the item in the Federal Register, likely in several months.
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