1 big thing: U.S. squeezes Chinese telecom vendors
The war against the Chinese telecom industry continues to accelerate.
- The Commerce Department on Monday banned American firms from selling components to ZTE for 7 years after finding the Chinese firm violated the terms of an existing sanctions agreement.
- And, as David McCabe reports, the Federal Communications Commission is steaming ahead with a proposal that would keep ZTE and Huawei out of a subsidized purchase program.
- Meanwhile, Britain appears to be following the U.S. lead on this. The Financial Times reports that authorities there are warning telecom firms that using network gear or services from ZTE could have a “long term negative effect on the security of the UK.”
What's at stake: It's not like the U.S. has a domestic player to supplant ZTE or Huawei. Rather, it seems to be concerned about China's power in networks and wants to see as much business as possible go to European rivals such as Nokia and Ericsson.
Driving the news: As we reported yesterday, China is leading the world in deploying super-fast 5G wireless, per a CTIA report. The Chinese firms are already prevented from working with major U.S. carriers but their products are popular among upstarts and smaller rural firms.
Quick take: Blocking them from competing could help strengthen their European and Asian rivals — but also risks slowing 5G deployment on smaller networks stateside.
All about 5G: Much of this is about controlling the next generation of cellular networks, and the generations that will follow. The Trump administration seems particularly focused on the issue, having blocked Broadcom's effort to buy Qualcomm and also having briefly toyed with the idea of building a national 5G network in an effort to try to limit China's power.
- And, of course, President Trump is in something of a broader trade spat with China, as you might have heard.
The big picture: While the Trump administration and Republicans on Capitol Hill are behind many of these moves, some Democrats are concerned about Huawei and ZTE as well.