Beijing: Barring Chinese companies only worsens wireless service in rural America

The U.S.' move on Chinese companies only worsens wireless service in rural areas. [Photo: CFP]

Beijing's response came after the U.S. Federal Communications Commission (FCC) designated two Chinese tech companies as threats to U.S. national security on Tuesday, a declaration that bars U.S. firms from tapping an 8.3 billion U.S. dollars government fund to purchase equipment from the companies.

The affected companies are China's telecommunication giants Huawei and ZTE, two major suppliers of equipment to U.S. rural wireless companies.

The official statement said the fund can no longer be used to purchase, obtain, maintain, improve, modify, or otherwise support any equipment or services produced or provided by these suppliers.

According to Reuters, U.S. telecommunications regulators voted in November 5-0 to issue the declaration and proposed requiring rural carriers to remove and replace equipment from the two Chinese companies from existing U.S. networks.

The designation means service will suffer as small carriers shut down parts of their network because they can't use subsidy funds for maintenance or replacement parts, Carri Bennet, general counsel for the Rural Wireless Association that represents carriers with fewer than 100,000 subscribers told Bloomberg.

"They're in a bind. They don't have cash to keep the networks afloat," Bennet said.