via Wikimedia Commons

Huawei HQ in Shenzhen, China

WASHINGTON: FCC Commissioner Brendan Carr wants the FCC to “move swiftly to eliminate Communist China’s backdoor into our networks.”

At issue is an FCC rule that forbids companies from using federal money to buy “insecure” Chinese equipment to install on US networks. However, as currently written, the rule does not prevent companies from using private funds to buy and install the exact same equipment.

“It is time that we close this glaring loophole,” Carr, a Republican appointed by former President Trump, told the Center for Strategic and International Studies (CSIS) on Tuesday. “Once we’ve determined that Huawei or any other gear poses an unacceptable national security risk, it makes no sense to allow that exact same equipment to get purchased and inserted into our communications network as long as federal dollars aren’t involved. It’s the presence of this insecure gear in our networks that’s the threat, not the source of funding used to purchase it.”

In December, the FCC voted unanimously to adopt rules implementing the Secure and Trusted Communications Networks Act of 2019 (STCNA). Implementation entails a few actions. First, it allows the FCC to publish a list of communications equipment and services deemed to be a national security threat.

Second, the STCNA allows companies to “rip and replace” equipment determined to pose a national security threat. The rules allow for some entities to be reimbursed from a $1.9 billion program that was funded by Congress in December 2020.

Third, it prevents federal money, in what’s called the Universal Service Fund, from being used to purchase communications equipment and services determined to pose a risk to national security. This includes gear made by the companies on FCC’s published list. But private funding can be used instead, which is what Carr wants to change.

So, how can the loophole be closed? There are two potential courses of action, according to a source familiar with the issue. The first is that Congress can pass a law requiring the FCC to change its rules. The other is that the FCC can take action now through its equipment authorization process, which Carr explained.

“We have this equipment authorization process that disallows any device from being marketed, sold, or used in the U.S. unless it goes through that approval process,” Carr said. “And I think we need to carry through our decisions on Huawei and ZTE with respect to federal dollars and apply it to our equipment authorization regime, so we close that loophole that allows these insecure devices to continue to get inserted into the US communications network.”

As to the timing for changing the rule, it would vary. If the FCC were to change the equipment authorization process, it could be initiated now by new FCC Acting Chairwoman Jessica Rosenworcel, who is a Democrat. But the FCC’s change cannot happen overnight, the source said. It could take up to a year for the process to play out, which will include gathering and reviewing public comments on the proposed change.

While Carr’s suggestion appears to have widespread bipartisan support, it could still take Congress years to act.

Carr noted that the security concerns around gear made by some Chinese companies have been known since at least 2012. In October of that year, the House Permanent Select Committee on Intelligence published a report on the matter.

“I would say over the past three to four years, we have really turned the page in this country on the weak and timid approach that we took to Communist China in the past,” the commissioner said. “And frankly, that was a bipartisan failing. And we now have a bipartisan commitment, from my perspective, to show the strength and the resolve needed to address Communist China’s threat.”

What’s really at stake here? Heritage Foundation Senior Fellow Dean Cheng explained at the CSIS event: “China sees the world as entering a new period, that the world has shifted from the industrial age to the information age. From the CCP’s perspective, information is now the currency of power, both domestic and foreign.”

But Cheng cautioned against conflating information and cyber: “Notice that I don’t use the term cyber, because it’s not just about the bits and bytes, software, hacking, viruses. It is about information. From the Chinese government’s perspective, it is about controlling the generation, transmission, access to, exploitation, interpretation, and the credibility of information. And this [has] both internal and external implication[s].”

The external implication is that China’s “Hoovering up” vast amounts of data on all sorts of groups, people, and organizations worldwide. The Chinese then manage this data using AI, big data analytics, and cloud computing — what they call ABC, Cheng said — to “build a remarkably comprehensive picture of people down to the individual level should they need it.”

And while they prioritize specific targets in general — what they call “anti-China elements” — the process can also be largely indiscriminate. “This goes to the reality that the Chinese are constantly trying to gain intelligence on a variety of topics,” Cheng said. “It’s very holistic, because it’s never quite clear where a line can be drawn between military, economic, political, diplomatic issues.”

The goal, Cheng noted, is what the West would call deterrence, but what the Chinese call “coercion.” He explained that “if you know your emails are being monitored, if you can’t be certain how secure your communications are, then you may be more reticent. You may choose not to write things. You may choose not to email. And, from the Chinese perspective, that’s all to the good. It’s not necessarily that you have to agree with them. It’s that you shut up.”