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President Moves To Block Deals For Suspect Tech

Commerce has 150 days to implement order

President Trump has signed an executive order intended to keep threatening tech out of U.S. telecom systems.

With the race to 5G, cybersecurity of the supply chain has become top of mind in D.C., particularly when it comes to Chinese telecoms with big shares of the market but identified as potential security threats.

The president also sent a letter to Congress that he was declaring a national emergency “to deal with the threat posed by the unrestricted acquisition or use in the United States of information and communications technology or services designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of foreign adversaries.”

See also: Trump Tech Tariffs Loom

The Commerce Department will take 150 days to write rules on reviewing any transaction pending or completed by the order date involving information or communications technology crucial to critical infrastructure and subject to control by a “foreign adversary” and thus posing a national security threat.

Commerce does not anticipate putting out guidance in advance of the rules, according to White House officials speaking on background, so identifying the suspect deals will be an “iterative process.”

That process would appear especially targeted to Chinese telecoms Huawei, ZTE and others, which have already been the targets of Hill and FCC actions and proposed actions, but those officials called the order both company and country agnostic.

The order is designed to equip the government to protect its critical infrastructure from foreign threats, they said.

Commerce will issue interim regulations, but will also solicit industry comment on final rules implementing the order.

The Secretary of Commerce will have the ability to prohibit transactions covered under the order, a call he will make in consultation with “the Secretary of the Treasury, the Secretary of State, the Secretary of Defense, the Attorney General, the Secretary of Homeland Security, the United States Trade Representative, the Director of National Intelligence, the Administrator of General Services, the Chairman of the FCC.”

FCC Chairman Ajit Pai praised the move.

“When it comes to our national security, we cannot afford to make risky choices and just hope for the best. We must have a clear-eyed view of the threats that we face and be prepared to do what is necessary to counter those threats. Today’s Executive Order does just that,” he said. “Protecting America’s communications networks is vital to our national, economic, and personal security. I therefore applaud the president for issuing this Executive Order to safeguard the communications supply chain. Given the threats presented by certain foreign companies’ equipment and services, this is a significant step toward securing America’s networks.”

The FCC last week denied a petition by China Mobile to interconnect with U.S. nets citing the Trump Administration’s advice to do so, and is considering its own proposal to bar threatening tech suppliers from broadband subsidy-funded network buildouts.

“President Trump’s decision sends a clear message that the U.S. will do what it takes to secure our communications networks,” said FCC Commissioner Brendan Carr. “The Executive Order will help ensure that our foreign adversaries do not compromise the security of our networks or undermine our core values, including our freedom from unlawful surveillance and respect for intellectual property. I look forward to continuing to work with all stakeholders to protect the security of our networks.”

“This is a needed step, and reflects the reality that Huawei and ZTE represent a threat to the security of U.S. and allied communications networks,” said former telecom exec and current vice chairman of the Senate Intelligence Committee Mark Warner (Va.). 

“Under current Chinese security laws, these and other companies based in China are required to provide assistance to the Chinese state. This executive order places a great deal of authority in the Department of Commerce, which must ensure that it is implemented in a fair and responsible fashion as to not harm or stifle legitimate business activities. It should also be noted that we have yet to see a compelling strategy from this Administration on 5G, including how the Administration intends to work cooperatively with our allies and like-minded nations to ensure that international standards set for 5G reflect Western values and standards for security and privacy. Nor do we have a stated plan for replacing this equipment from existing commercial networks — a potentially multi-billion dollar effort that, if done ineptly, could have a major impact on broadband access in rural areas. A coherent coordinated and global approach is critically needed as nations and telecom providers move to implement 5G.”