The US is set to issue Huawei with another 90 day extension to a licence that lets it source some components from American companies.
Earlier this year, the US Department of Commerce effectively blacklisted the Chinese mobile giant on national security grounds, preventing American firms from doing business with the company. The ruling limited Huawei’s access to important components and to the Android operating system as well as Google applications.
Washington did however give some wiggle room, allowing Huawei to procure technologies from certain suppliers in order to serve US rural operators that use its equipment. This temporary licence was extended for 90 days back in August and is set to expire once again.
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Huawei licence reprieve
It had been reported that the US government was considering a two-week temporary extension followed by a longer period but the regulatory work involved was considered difficult. Instead, the Commerce Department plans to use the same legal mechanism it used in August, Reuters reports.
Although Huawei has effectively been frozen out of the US market, some smaller, mostly rural, mobile operators rely on its equipment because it is cheaper than the competition. If Huawei was denied access to key components, then this infrastructure would suffer.
Commerce Secretary Wilbur Ross told Fox Business Network on Friday: “There are enough problems with telephone service in the rural communities - we don’t want to knock them out. So, one of the main purposes of the temporary general licenses is to let those rural guys continue to operate.”
The US Federal Communication Commission (FCC) plans to provide these carriers with government funding to replace Chinese-manufactured kit with gear from rivals. The Rural Wireless Association, which represents operators with fewer than 100,000 customers, estimates a quarter of its members have Chinese-made kit in their networks and estimates it could cost up to $1 billion to replace it.
Huawei has frequently denied any allegations that its products are a security risk, while Washington has produced no evidence of any wrongdoing. Meanwhile, US companies want to be able to do business with the Chinese firm, arguing that the sanctions have cut off a valuable source of revenue.
The American government said it plans to issue licences to firms who want to sell non-sensitive goods to Huawei but has yet to approve any applications.
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- Via Reuters
