media logos

Will the House of Representatives take action against ZTE and Huawei?

A few months ago we saw a report that suggested the U.S. government was taking a close look at Chinese manufacturers ZTE and Huawei. Yesterday morning the U.S. House of Representatives issued a report suggesting that telecom operators not do business with the two companies, citing a number of issues — including a security threat. While the report focuses on routers and other network equipment, the cellular divisions will clearly be affected. So will this report amount to any sanctions against the companies?

The allegations, which include the sending of data packets back to China, seem serious. Both companies issued strongly worded statements denouncing the report, as expected. The committee chair, Mike Rogers, did not urge a consumer boycott, but did urge companies to consider employing different vendors for their network solutions.

Clearly the U.S. is going to feel concerned when companies with ties to Chinese organizations — Huawei had but claims to have severed connections to China’s People’s Liberation Army. But will they take direct action? In many ways this report seems like a first step. And, as Arik Hesseldahl of All Things D notes, the U.S.’s main concerns might stem from actions it has taken itself in the recent past.

ZTE gets the final word, at least in this blog post, since they did make a valid point in denouncing the report. “ZTE should not be a focus of this investigation to the exclusion of much larger Western vendors.” Zing.

Via Reuters.