FCC chief cites concerns on spy threats from Chinese telecoms firms

By David Shepardson

WASHINGTON (Reuters) - Federal Communications Commission Chairman Ajit Pai said he shares the concerns of U.S. lawmakers about espionage threats from Chinese smartphone maker Huawei Technologies Co and plans to take "proactive steps" to ensure the integrity of the U.S. communications supply chain.

Pai, in a letter to lawmakers dated March 20 and released on Friday, said he shares concerns over the "security threat that Huawei and other Chinese technology companies pose to our communications networks." Pai said he intends to take action in the "near future," but offered no specifics.

An FCC spokesman declined to comment.

Pai's letter follows the introduction of legislation by Republican Senators Tom Cotton and Marco Rubio in February that would block the U.S. government from buying or leasing telecoms equipment from Huawei, the world's third largest smartphone maker, or Chinese telecommunications equipment maker ZTE Corp, citing concerns the companies would use their access to spy on U.S. officials.

Chinese firms have come under greater scrutiny in the United States in recent years over fears they may be conduits for spying, something they have consistently denied.

Pai, the top U.S. telecommunications regulator, said in his letter that the FCC does not purchase or use Huawei or ZTE products or equipment, "and I do not expect that would change if a major U.S. communications company partnered with Huawei."

Huawei declined to comment on Pai's letter on Friday.

In January, Huawei's planned deal with U.S. carrier AT&T Inc to sell its smartphones in the United States collapsed at the 11th hour. AT&T was pressured to drop the deal after lawmakers sent a letter to Pai citing concerns about Huawei’s plans to launch consumer products through a major U.S. telecoms carrier.

In February, Republican Senator Richard Burr, chairman of the Senate Intelligence Committee, said at a hearing that he worried about the spread in the United States of “counterintelligence and information security risks that come prepackaged with the goods and services of certain overseas vendors."

"The focus of my concern today is China," Burr added, "and specifically Chinese telecoms like Huawei and ZTE Corp, that are widely understood to have extraordinary ties to the Chinese government."

Under questioning at the hearing, none of the intelligence officials said they would use a Huawei or ZTE product.

In 2012, Huawei and ZTE were the subject of a U.S. investigation into whether their equipment provided an opportunity for foreign espionage and threatened critical U.S. infrastructure - something they have consistently denied.

Earlier this week Best Buy Co Inc, the largest U.S. consumer electronics retailer, decided to cut ties with Huawei, Reuters reported, amid heightened scrutiny on Chinese tech firms in the United States.

(Reporting by David Shepardson and Diane Bartz; Editing by Leslie Adler)