The US Federal Communications Commission (FCC) has directed some US telecom firms to withdraw Huawei’s technology from their network.
The FCC has also begun the process of revoking China Telecom’s license to operate in the United States.
The “rip and replace” order is the new U.S. action against Huawei for national security reasons.
The order provides subsidies for smaller carriers for the removal and replacement of equipment.
However, the Commission cannot directly enact the reimbursement rates without the authorization of the Congressional funding.
FCC Chairman Ajit Pai said that Huawei has strong links with the Chinese intelligence and military institutions as well as the Communist Party, and that these ties are at every level of the organization the way up to its creator”
“The doubts about Huawei aren’t just theoretical: Independent entities have found multiple security flaws in Huawei equipment and found it to be less safe than that of other firms intentionally so,” Mr. Pai said.
He said that Huawei is also subject to “sweeping” laws that require the company’s assistance and cooperation with the Chinese intelligence services and prohibit the disclosure of such assistance.
The FCC will issue a list of telecommunications infrastructure and tools listed as a danger to national security.
It is projected that the initiative would need at least $1.6 billion (£1.2 billion) to be repaid to participating providers, most of which will receive federal grants to provide services in remote parts of the US.
Huawei has long refuted US allegations that it is a government-run enterprise and a national security threat.
In a release, the company shared its frustration at the decision.
“This overreach puts US citizens at risk in the largely underserved rural areas – during a disease outbreak – when reliable communication is important,” the company said.
On Thursday, the FCC also dismissed Huawei’s petition calling on the Regulator to rethink its decision to classify the firm as a national security risk to communication systems.
The FCC has started the process of rescinding China Telecom’s authorization to provide domestic interstate and international telecommunications services within the United States”
The US subsidiary of the company was asked in April to “show cause why the Commission should not start a procedure for rescinding and withdrawing” its authorization.
The FCC reported that China had “failed to provide such a satisfying answer to the concerns.”