Telecom Network Security Mandated in Trade Pacts By Thune Bill

Sen. John Thune (R-S.D.) will introduce a bipartisan bill today that seeks to ensure that trade agreements protect the security of digital telecommunications systems, including next generation 5G equipment.

While the legislation doesn’t name specific foreign-owned companies, its intended targets include Chinese-owned companies Huawei Technologies Co. and ZTE Corp., which President Donald Trump’s administration has said pose a security threat to the U.S. telecommunications sector.

“Unfair trade practices of communications equipment suppliers owned or controlled by a foreign government should not be tolerated. Period,” Thune said Wednesday at a Senate Commerce, Science and Transportation hearing on 5G supply chain security.

“If you are trading with companies—in a digital way—that have risky equipment in their networks, then I think that presents a risk for everybody,” he told reporters after the hearing.

Stefani Reynolds/Bloomberg

Sen. John Thune (R-S.D.) at a Feb. 4 subcommittee hearing.

The U.S. has moved to curb Huawei’s ability to sell equipment in the U.S. and buy parts from U.S. suppliers by adding Huawei to a Commerce Department blacklist. U.S. government officials say Huawei is dangerous in part because it could use its growing share of the telecom equipment market to spy for the Chinese government. Secretary of State Michael Pompeo has said the U.S. might hold back intelligence-sharing with NATO allies if they use Huawei equipment.

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The legislation is cosponsored by Sens. Mark Warner (D-Va.), Deb Fischer (R-Neb.) and Debbie Stabenow (D-Mich.).

“This bill sends an important message to our allies and trading partners that our concerns with Huawei are not fleeting or superficial,” Warner said in an emailed statement to Bloomberg Government.

“While we’ve seen multiple Administrations exhort foreign partners not to use Huawei, we’ve continually failed to see a long-term, sustained, multi-lateral strategy to safeguard the global telecommunications market and foster innovative, competitively priced alternatives,” he said.

Thune’s measure would expand the trade negotiating objectives under the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (Public Law 114-26). Negotiators would have to ensure the security of the global communications infrastructure and address unfair trade practices of suppliers owned or supported by foreign governments.

Last week, the Senate cleared a bill (H.R. 4998) that would direct the Federal Communications Commission to provide subsidies to telecom companies to replace equipment from federally banned companies Huawei and ZTE. (See the BGOV Bill Summary on H.R. 4998)

Commerce Chairman Roger Wicker (R-Miss.) said during the committee hearing that he expects Trump to sign the subsidies bill in the coming days with “fanfare.”

The FCC adopted an order in November that imposed a ban on using assistance from the Universal Service Fund to buy equipment and services from Huawei and ZTE.

To contact the reporter on this story: Rebecca Kern in Washington at rkern@bgov.com

To contact the editors responsible for this story: Zachary Sherwood at zsherwood@bgov.com; Loren Duggan at lduggan@bgov.com