Huawei expected to sue US watchdog

Chinese telecom giant Huawei is preparing a legal counterpunch against new moves by US regulators to bar the company from accessing $8.5bn in US federal funds for services and equipment, a report said on Friday.

In November the Federal Communications Commission (FCC) branded Huawei and its Chinese rival, ZTE, as threats to US national security and blocked them from the fund.

It also proposed that other service providers be required to cancel or replace existing services and equipment from the companies.

Huawei plans to file a lawsuit in the US this week, The Wall

Street Journal reported, citing unidentified sources.

A Huawei spokesperson declined to comment but the company has invited AFP and other media to its headquarters in the southern city of Shenzhen for an unspecified announcement on Thursday.

FCC chair Ajit Pai said in a statement explaining the latest move that Huawei and ZTE

“have close ties to China’s communist government and military apparatus”.

Last week Huawei said that the FCC decision was “based on selective information, innuendo and mistaken assumptions” and that blocking access to the fund will hurt US consumers.

The Universal Service Fund is used to subsidise telecommunication services and equipment mainly in rural areas of the US, a market where Huawei equipment has established a presence despite the growing US pressure on the company.

President Donald Trump moved in May to block American companies from doing business with Huawei, which US officials accuse of violating US sanctions on Iran.

Trump has since offered reprieves for Huawei to allow service providers that cover remote rural areas time to comply with the ban, according to US officials.

ZTE came close to collapse in 2018 after US companies were prevented from selling it vital components because of its continued dealings with Iran and North Korea.

Trump later allowed ZTE to resume imports under tough conditions.

Huawei’s CFO, Meng Wanzhou, who is also the daughter of the company’s founder and CEO, was arrested in Canada in 2018 and is now fighting extradition to the US on fraud and conspiracy charges tied to US sanctions.

HUAWEI SAID THE FCC DECISION WAS BASED ON SELECTIVE INFORMATION, INNUENDO AND MISTAKEN ASSUMPTIONS